EXHIBIT 10.07
WTC-OL-81595 Lease No. WT-3415-B-88,89 (1770)
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THE PORT AUTHORITY
OF
NEW YORK AND NEW JERSEY
WORLD TRADE CENTER
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AGREEMENT OF LEASE
between
THE PORT AUTHORITY
OF
NEW YORK AND NEW JERSEY
and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
----------------------
================================================================================
AGREEMENT OF LEASE
between
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY
and
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
TABLE OF CONTENTS
Section Title Page
------- ----- ----
Section 1. Letting......................................................... 1
Section 2. Term............................................................ 1
Section 3. Rights of User by the Lessee.................................... 3
Section 4. Basic Rental.................................................... 5
Section 5. Governmental Requirements....................................... 6
Section 6. Rules and Regulations........................................... 8
Section 7. Responsibilities of the Lessee.................................. 9
Section 8. Maintenance and Repair......................................... 12
Section 9. Casualty....................................................... 13
Section 10. Indemnity...................................................... 19
Section 11. Ingress and Egress............................................. 20
Section 12. Construction by the Lessee..................................... 22
Section 13. Signs.......................................................... 41
Section 14. Injury and Damage to Person or Property........................ 42
Section 15. Additional Rent and Charges.................................... 42
Section 16. Rights of Entry Reserved....................................... 43
Section 17. Condemnation................................................... 47
Section 18. Abatement of Rental............................................ 48
Section 19. Assignment and Sublease........................................ 49
Section 20. Termination.................................................... 59
Section 21. Existing Lease................................................. 62
Section 22. Survival of the Obligations of the Lessee...................... 64
Section 23. Reletting by the Port Authority................................ 66
Section 24. Waiver of Redemption........................................... 67
Section 25. Remedies and Suits Against the Lessee.......................... 67
Section 26. Surrender...................................................... 67
Section 27. Acceptance of Surrender of Lease............................... 68
Section 28. Brokerage...................................................... 68
Section 29. Notices........................................................ 69
Section 30. Payments....................................................... 69
Section 31. Additional Provisions Relating to a Successor Owner............ 70
Section 32. Quiet Enjoyment................................................ 71
Section 33. Non-Liability of Individuals................................... 71
Section 34. Headings....................................................... 72
Section 35. Construction and Application of Terms.......................... 72
Section 36. Definitions.................................................... 72
Section 37. Insurance...................................................... 73
Section 38. Late Charges................................................... 77
Section 39. Force Majeure.................................................. 79
Section 40. Premises....................................................... 81
Section 41. Governmental Compliance........................................ 81
Section 42. Services and Utilities......................................... 82
Section 43. Partnership Provision.......................................... 92
Section 44. Additional Space............................................... 93
Section 45. Lessee's Right to Extend the Letting........................... 96
Section 46. Port Authority Work............................................ 98
Section 47. Termination by the Lessee..................................... 101
Section 48. Certain Obligations of the Port Authority..................... 102
Section 49. Additional Provisions......................................... 106
Section 50. Security Deposit or Letter of Credit.......................... 107
Section 51. Entire Agreement.............................................. 109
EXHIBITS: A (▇▇▇▇ ▇▇▇▇▇), ▇-▇ (▇▇▇▇ ▇▇▇▇▇), C (Tenant Alteration
Application), P (Parking Permit), X (Assignment of Lease with
Assumption and Consent), Y (Consent to Subletting) and R
(Rules and Regulations);
SCHEDULES: A, A-1, B (Cleaning Schedule), D (heat, ventilation and air
conditioning systems) and E
THIS AGREEMENT, made as of June 19, 1998, 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, and having an office at One World Trade Center, in the
Borough of Manhattan, City, County, and State of New York, and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, INC. (hereinafter called the "Lessee"), a corporation of the State of New
York having an office and place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ whose representative is ▇▇▇ ▇▇▇▇▇,
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, in
the Borough of Manhattan, City, County and State of New York, the spaces as
shown in diagonal hatching, diagonal cross hatching, vertical hatching, cross
hatching, horizontal hatching and stipple on the sketches annexed hereto, made a
part hereof and marked "Exhibit A" and "Exhibit A-1", together with the
fixtures, improvements and other property of the Port Authority located or to be
located therein or thereon, the said space shown on Exhibit A, together with
such fixtures, improvements and other property being hereinafter sometimes
referred to as "Area A", the said space shown on Exhibit A-1, together with such
fixtures, improvements and other property being hereinafter sometimes referred
to as "Area A-1", and Area A and Area A-1 being hereinafter sometimes
collectively referred to as the "premises" and sometimes individually referred
to as an "Area". The Port Authority and the Lessee hereby acknowledge that the
premises constitute non-residential real property and that for all purposes
under this Agreement the premises are comprised of ninety-seven thousand seven
hundred ninety-nine (97,799) rentable square feet, consisting of forty-nine
thousand four hundred twenty-one (49,421) rentable square feet in the portion of
the premises shown on Exhibit A and forty-eight thousand three hundred
seventy-eight (48,378) rentable square feet in the portion of the premises shown
on Exhibit A-1.
Section 2. Term
(a) The term of the letting of Area A under this Agreement
shall commence at 12:01 o'clock A.M. on July 1, 1998, said date as the same may
be postponed pursuant to paragraph (b) of this Section being hereinafter called
the "Area A Commencement Date" and the term of the letting of Area A-1 under
this Agreement shall commence at 12:01 o'clock A.M. on January 1, 1999, said
date as the same may be postponed pursuant to paragraph (b) of this Section
being hereinafter called the "Area A-1 Commencement Date". For the purposes of
this Agreement the Area A Commencement Date and the Area A-1 Commencement Date
are sometimes individually referred to herein as the Commencement Dates for such
Areas, respectively. The term of the letting under this Agreement 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 earlier of the Area A Rent
Commencement Date and the Area A-1 Rent Commencement Date, as such terms are
defined in paragraph (e) of the Section of this Agreement entitled "Basic
Rental", such earlier Rent Commencement Date being hereinafter referred to as
the "Lease Commencement Date" and such preceding day being hereinafter referred
to as the "Expiration Date".
(b) If on July 1, 1998, in the case of Area A, or January 1,
1999, in the case of Area A-1, such Area is not available or ready for occupancy
or use by the Lessee, by reason of the
fact that such Area or any part thereof, or any part of the World Trade Center,
is in the course of construction, repair, alteration or improvement or by reason
of the fact that the occupant of such Area, or a part thereof, failed or refused
to deliver possession, or by reason of any causes or conditions beyond the
control of the Port Authority, the letting of such Area shall be postponed and
the Port Authority shall not be subject to any liability for such postponement
or failure to give possession on July 1, 1998, in the case of Area A, or January
1, 1999, in the case of Area A-1. However, in the event of such postponement the
Lessee shall be entitled to a rental credit as set forth in paragraph (c) of
this Section and if any occupant of Area A or Area A-1 holds over after the date
of expiration or earlier termination (whether pursuant to a surrender agreement
or otherwise) of the tenant's lease with respect to such Area, the Port
Authority, at its expense, shall promptly institute and diligently prosecute
holdover and other appropriate legal proceedings against such occupant, shall
endeavor to notify the Lessee of such holdover and shall endeavor to keep the
Lessee reasonably informed of the status of such holdover (and, upon written
request by Lessee, the Port Authority shall so notify the Lessee). No such
postponement or failure to give possession on such date shall affect the
validity of this Agreement or the obligations of the Lessee hereunder except as
may be expressly provided herein. However, rental for such Area shall not
commence until the Rent Commencement Date for that Area (determined as set forth
in paragraph (e) of the Section of this Agreement entitled "Basic Rental" );
tender shall be made by notice given at least five (5) days prior to the actual
date on which vacant possession of such Area is delivered to the Lessee and, in
the event of a postponement as provided in this paragraph (b), the letting of
such Area shall not commence until vacant possession of such Area is delivered
by the Port Authority to the Lessee. In the event that neither the Area A
Commencement Date nor the Area A-1 Commencement Date shall have occurred on or
before June 1, 2001, then this Agreement and the letting thereunder shall be
deemed cancelled, except that each party shall and does release and discharge
the other party from any and all claims or demands based on this Agreement, or a
breach or alleged breach thereof, provided, that the Port Authority shall not be
relieved of any liability which may exist in the event it has failed to
institute and prosecute holdover and other legal proceeding in the manner and
under the circumstances set forth in this paragraph (b). In the event that only
one of the Area A Commencement Date or the Area A-1 Commencement Date shall have
occurred on or before July 1, 2014, but not both of them, then the letting of
the Area which has not then commenced under this Agreement shall be deemed
cancelled and each party shall and does release and discharge the other party
from any and all claims or demands based on the letting of such Area under this
Agreement or a breach or alleged breach thereof in connection therewith.
(c) In the event that the Commencement Date for an Area has been postponed
pursuant to paragraph (b) of this Section and vacant possession of such Area has
not been tendered on or prior to September 1, 1998, in the case of Area A, or
March 1, 1999, in the case of Area A-1, then, in addition to the postponement of
the Rent Commencement Date for that Area which may result from such
postponement, and effective on the Rent Commencement Date for that Area, as so
postponed, the Lessee shall be entitled to a credit against its rental
obligations next becoming due in an amount equal to the product obtained by
multiplying the daily basic rental for that Area, as defined in this paragraph
(c), by the number of days in the period commencing on September 2, 1998, in the
case of Area A, or March 2, 1999, in the case of Area A-1, and ending on the
actual date on which vacant possession of such Area is delivered to the Lessee
in the condition required by this Agreement. The "daily basic rental for Area A"
for the purposes of this Agreement shall be Four Thousand Three Hundred Twelve
Dollars and Forty-nine Cents ($4,312.49) and the "daily basic rental for Area
A-1" for the purposes of this Agreement shall be Four Thousand Two Hundred
Twenty-one Dollars and Forty-nine Cents ($4,221.49). The granting of the rental
credit described in this paragraph (c), and the postponement of the Rent
Commencement Date for an Area pursuant to the provisions of paragraph (e) of the
Section of this Agreement entitled "Basic Rental" shall be
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the sole remedies available to the Lessee for any injury or damages resulting
from the postponement of the Commencement Date of that Area or of this Agreement
in accordance with the provisions of paragraph (b) of this Section, provided,
that the parties acknowledge that the letting of the premises under the Existing
Lease, as defined in the Section of this Agreement entitled "Existing Lease",
may also be extended as provided in said Section as a result of such
postponement .
Section 3. Rights of User by the Lessee
(a) The Lessee and its Permitted Occupants shall use the
premises for the following purposes only and for no other purpose whatsoever: as
clerical, administrative and executive offices for the Lessee's international
and domestic business as underwriters and distributors of municipal and
corporate securities, dealers in securities and general investment counselors
and for such other type or types of business or operations engaged in or
previously engaged in by office tenants at the World Trade Center whose
eligibility and qualifications are determined by the Port Authority under the
provisions of the Statutes, as defined in paragraph (g) of Section 7 of this
Agreement entitled "Responsibilities of the Lessee", strictly on the basis of
their functions, activities and services in world trade and commerce. Nothing in
this Section shall be deemed to prohibit the Lessee from using the premises for
such uses which are incidental and ancillary to the office uses provided in the
preceding sentence.
(b) In the event that title to the building in which the
premises is located is transferred to a landlord which shall not be subject to
the Statutes and the Statutes are no longer applicable to the purposes for which
the office space in such building may be used, then the Lessee may use the
premises, in addition to the purposes set forth in paragraph (a) of this Section
3, as clerical, administrative and executive offices for any other lawful
purpose, provided that such use shall not violate any of the covenants,
agreements, terms, provisions or conditions of this Agreement (other than the
provisions of this Section 3) and, provided, further, that the Lessee may not
use the premises for any unlawful purpose or in any unlawful manner and in
violation of any Legal Requirements (as defined in paragraph (b) of the Section
of this Agreement entitled "Governmental Requirements") including, but not
limited to, any applicable certificate of occupancy or certificate of use for
the premises or the building in which the premises is located nor shall the
Lessee use the premises in any manner or permit anything to be done, brought
into or kept in the premises that in the landlord's reasonable opinion shall or
might impair or interfere with (1) the safety, character, reputation or
appearance of the building in which the premises is located as a first class
office building, (2) any of such building's systems or the heating, ventilating,
cleaning, air-conditioning or other services in the building or the premises, or
(3) the use of any of the other areas of the building by any of the other
tenants or occupants of the building in which the premises is located or of the
World Trade Center.
(c) The Lessee and its Permitted Occupants solely in
conjunction with the activities permitted pursuant to paragraph (a) of this
Section 3 shall have the right to conduct activities and operations which are
incidental and ancillary thereto, including without limitation thereto:
(1) messenger and mail room operations;
(2) reproduction and copying operations;
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(3) a sales office but not for retail or open to the
general public for off-the-street transactions;
(4) word processing center;
(5) computer and communication systems operations;
(6) employee lounges;
(7) libraries;
(8) file rooms;
(9) meeting and conference rooms;
(10) lunch rooms and dining rooms;
(11) kitchens and food warming areas;
(12) exercise rooms; and
(13) additional bathrooms.
Nothing in this paragraph is intended or shall be deemed to amend or modify the
provisions of paragraph (e) of the Section of this Agreement entitled
"Responsibilities of the Lessee" or of the Section of this Agreement entitled
"Construction by the Lessee". The Port Authority reserves the right to charge
the Lessee for domestic cold and hot water and for any and all utilities or
other building services used in connection with any bathrooms or eating
facilities installed in any such special purpose area, in each case, to the
extent provided in the Section of this Agreement entitled "Services and
Utilities", it being understood that the Port Authority shall have the right to
install a meter on the Lessee's premises at the Port Authority's cost to measure
the Lessee's consumption of such domestic hot and cold water. The Lessee shall
set forth on its Lessee's plans and specifications submitted to the Port
Authority in accordance with the Section of this Agreement entitled
"Construction by the Lessee" any special purpose area requiring additional
utilities or heat, ventilation, air-cooling or other building services as well
as the lines, conduits, wires, pipes or ducts needed to supply such additional
utilities or services.
Section 4. Basic Rental
(a) The Lessee, subject to any rental abatement provisions
specifically set forth elsewhere in this Agreement, agrees to pay to the Port
Authority a basic rental for Area A for the period from the Area A Commencement
Date continuing throughout the balance of the term of the letting under this
Agreement at the rate of One Million Five Hundred Seventy-four Thousand
Fifty-eight Dollars and No Cents ($1,574,058.00) per annum, payable in advance
in equal monthly installments of One Hundred Thirty-one Thousand One Hundred
Seventy-one Dollars and Fifty Cents ($131,171.50) on the Area A Rent
Commencement Date and on the first day of each and every calendar month
thereafter throughout the balance of the term of the letting under this
Agreement. Without in any way modifying the foregoing, no basic rental shall be
payable by the Lessee during
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the period from the Area A Commencement Date through and including the day
preceding the Area A Rent Commencement Date.
(b) The Lessee, subject to any rental abatement provisions
specifically set forth elsewhere in this Agreement, agrees to pay to the Port
Authority a basic rental for the premises for the period from the Area A-1
Commencement Date continuing throughout the balance of the term of the letting
under this Agreement at the rate of One Million Five Hundred Forty Thousand
Eight Hundred Forty-two Dollars and No Cents ($1,540,842.00) per annum, payable
in advance in equal monthly installments of One Hundred Twenty-eight Thousand
Four Hundred Three Dollars and Fifty Cents ($128,403.50) on the Area A-1 Rent
Commencement Date and on the first day of each and every calendar month
thereafter throughout the balance of the term of the letting under this
Agreement. Without in any way modifying the foregoing, no basic rental shall be
payable by the Lessee during the period from the Area A-1 Commencement Date
through and including the day preceding the Area A-1 Rent Commencement Date.
(c) If the Area A Rent Commencement Date or the Area A-1 Rent
Commencement Date shall occur on a day other than the first day of a calendar
month, the installment of basic rental payable on the Rent Commencement Date for
such Area for the portion of that month from and after such Rent Commencement
Date shall be an amount equal to the monthly installment of basic rental
described in paragraph (a) or paragraph (b) of this Section, as the case may be,
multiplied by a fraction, the numerator of which shall be the number of days in
the period commencing on the applicable Rent Commencement Date and ending on the
last day of the calendar month in which such applicable Rent Commencement Date
shall fall, both dates inclusive, and the denominator of which shall be the
actual number of days in that calendar month.
(d) If the Expiration Date occurs on a date which is other
than the last day of a calendar month, or the letting is terminated effective on
a date which is other than the last day of a calendar month, the basic rental
for the premises for the portion of that calendar month during which the letting
is effective shall be an amount equal to the total of the monthly installments
of basic rental described in paragraph (a) and (b) of this Section payable for
that calendar month multiplied by a fraction the numerator of which shall be the
number of days in the period commencing on the first day of that calendar month
and ending on the Expiration Date or such effective date of termination and the
denominator of which shall be the actual number of days in that calendar month.
In the event that the letting is terminated effective on a date which is other
than the last day of a calendar month any basic rental paid by the Lessee prior
to such termination in excess of the prorated amount determined as provided in
the preceding sentence and any additional basic rental paid by the Lessee in
excess of an amount prorated for the portion of such calendar month in which
such letting was in effect shall be refunded by the Port Authority to the Lessee
within thirty (30) days after the effective date of such termination. The Port
Authority's obligations under this paragraph (d) shall survive the expiration or
earlier termination of this Agreement.
(e) For the purposes of this Agreement the "Area A Rent
Commencement Date" shall be the earlier of the two-hundred seventieth (270th)
day following the Area A Commencement Date or the date that the Lessee commences
in Area A the business operations permitted therein pursuant to the provisions
of the Section of this Agreement entitled "Rights of User by the Lessee" and the
"Area A-1 Rent Commencement Date" shall be the earlier of the two-hundred
seventieth (270th) day following the Area A-1 Commencement Date or the date that
the Lessee commences in Area A-1 the business operations permitted therein
pursuant to the provisions of such Section. The Area A Rent Commencement Date
and the Area A-1 Rent Commencement Date are sometimes individually referred to
in this Agreement as a "Rent Commencement Date".
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(f) In addition to the basic rental for the premises as set
forth above, the Lessee shall pay additional basic rental for the premises
during the term of the letting in accordance with the provisions of Schedule A
(or Schedule A-1 as the case may be) attached to this Agreement and hereby made
a part hereof on the basis of the number of rentable square feet constituting
the premises from time to time.
Section 5. Governmental Requirements
(a) 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 are necessary for the conduct of its operations.
(b) Subject to the provisions of this Agreement that expressly
require the Port Authority's compliance with the following and subject to the
proviso contained at the end of the following sentence, 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 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 (such governmental laws, rules and regulations, requirements, orders
and directions being sometimes herein called the "Legal Requirements"). 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 are required at any
time during the term of the letting under this Agreement by any such present or
future law, rule, regulation, requirement, order or direction, provided, that
the Lessee shall not be required to make improvements, alterations or repairs to
the premises pursuant to this paragraph (b) unless the requirement results from
the particular manner of use or operations of the Lessee in the premises as
opposed to general office use. Nothing in this paragraph (b) shall be construed
to require the Lessee to make improvements, alterations or repairs to the
premises if the necessity for such improvements, alterations or repairs result
from a casualty of the type described in paragraph (a) of the Section of this
Agreement entitled "Casualty".
(c) If the Lessee shall contest against any governmental
authority by appropriate legal proceedings diligently prosecuted in good faith
the validity or applicability to the Lessee of any governmental requirements,
referred to in paragraph (b) above of this Section, the Lessee shall not be in
default thereof unless Lessee fails to comply with same in the time period
required under law after the final determination of the validity or
applicability in such proceedings, provided, however, that the Lessee shall not
make any such contest if it is based in whole or in part on the status of the
Port Authority and the Lessee will not delay compliance if the delay shall
result in the creation or continuance of a condition endangering persons or
property (other than Lessee's property). In the event that as a result of a
contest made by the Lessee, the Port Authority incurs any reasonable
out-of-pocket cost or expense which cost or expense would not have been incurred
but for such contest, then the Lessee within thirty (30) days after demand
therefor will reimburse the Port Authority such costs and expenses. It is not
intended by this paragraph (c) to give the Lessee any right to make any contest
against any governmental authority which the Lessee would not have had in the
absence of this provision.
(d) 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.
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(e) Wherever the term "governmental authority", "governmental
agency" or "governmental" is used in this Agreement, it shall not be deemed to
include the Port Authority, when acting solely as landlord or solely as the
owner of the World Trade Center. Without in any way limiting the generality of
the Section of this Agreement entitled "Rules and Regulations", nothing in this
Section shall be deemed to permit the Port Authority to discriminate against the
Lessee in the Port Authority's application and enforcement of its resolutions,
rules, regulations, instructions and orders governing the operation of the World
Trade Center or any portion thereof except to the extent that same may be
inapplicable to the Lessee or any other occupant of the World Trade Center.
Section 6. Rules and Regulations
(a) The Lessee covenants and agrees to observe and obey (to
compel its officers, members, employees, agents and representatives to observe
and obey and to use reasonable efforts to have its 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 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, provided, that the Lessee shall not be required to use reasonable
efforts to have its customers, guests, invitees and those doing business with
the Lessee to observe and obey the Rules and Regulations when such customers,
guests, invitees and persons doing business with the Lessee are outside of the
premises. The Port Authority agrees that, except in the case of an emergency in
which case it shall give the Lessee such notice as may be practicable, it will
give notice to the Lessee of every such further rule or regulation adopted by it
at least ten (10) business days before the Lessee shall be required to comply
therewith and the Lessee shall not be required to comply with same unless and
until it receives such notice. If the Port Authority shall adopt a further rule
or regulation which unreasonably discriminates against the Lessee, then such
further rule or regulation shall not be applicable to the Lessee solely to the
extent of such unreasonable discrimination. The Port Authority shall not apply
or enforce any of the Rules and Regulations in such manner as to unreasonably
discriminate against the Lessee except to the extent that any such Rule or
Regulation may be inapplicable to the Lessee or any other occupant in the World
Trade Center. If a Rule or Regulation shall conflict with any provision of this
Agreement, such provision shall control. In the event that the Lessee shall
notify the Port Authority that another tenant of the World Trade Center is
violating the Rules and Regulations, specifying the manner of such violation,
and such violation is actually interfering with the Lessee's operations under
this Agreement, the Port Authority will use best efforts to obtain such other
tenant's conformance to the Rules and Regulations.
(b) (1) Notwithstanding the provisions of Rule 15 of the Rules
and Regulations attached to this Agreement, the Lessee and its
contractors may use appropriate welding equipment where necessary to
perform its construction and installation work in the premises,
provided, that the Lessee shall obtain the approval of the Port
Authority for such use, whether as part of the approval of the Lessee's
plans and specifications for such work or otherwise, and all such use
shall be conducted in compliance with all applicable governmental laws,
rules and regulations, requirements, orders and directions.
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(2) Notwithstanding the provisions of Rule 23 of the Rules and
Regulations attached to this Agreement, the Port Authority shall not
require the Lessee to purchase particular draperies to cover its
exterior windows, but the Lessee shall obtain the approval of the Port
Authority for the Lessee's exterior window coverings, whether as part
of the approval of the Lessee's plans and specifications for such work
or otherwise, and shall use such window coverings to assist in the
control of temperature in the premises as set forth in said Rule 23.
Section 7. Responsibilities of the Lessee
(a) The Lessee shall conduct its operations in an orderly
manner and so as not to unreasonably annoy, unreasonably disturb or be
unreasonably offensive to others at the World Trade Center, and the Lessee shall
control the conduct of its officers, members, employees, agents,
representatives, and contractors, and shall use reasonable efforts to control
the conduct of its customers, guests, invitees and those doing business with it.
Upon objection from the Port Authority concerning the conduct of any of the
Lessee's officers, members, employees, agents, representatives, contractors,
customers, guests, invitees and those doing business with it in violation of the
preceding sentence, the Lessee shall promptly take all reasonable and practical
steps necessary to remove the cause of the objection. Upon notice from the
Lessee that other tenants or occupants (or their officers, members, employees,
agents, representatives, contractors, customers, guests, invitees or those doing
business with them) in the Building are unreasonably disturbing the Lessee or
its Permitted Occupants in its premises, the Port Authority, if in its
reasonable opinion the Lessee's complaint is justified, will register objection
to any such conduct with the offending tenant or occupant and will use
reasonable efforts to correct the condition giving rise to the Lessee's
objection but any continuation of such condition after such use of reasonable
efforts by the Port Authority shall not be or be deemed to be a violation or
breach of this Agreement on the part of the Port Authority or constitute the
basis for any claim or other action against the Port Authority by the Lessee.
(b) The Lessee shall not commit any nuisance on the premises,
or do or knowingly permit the creation or commission of a nuisance on the
premises, and the Lessee shall not cause or knowingly permit to be caused or
produced upon the premises, to permeate the same or to emanate therefrom, any
noxious or unreasonable smokes, gases, vapors, odors or noises.
(c) Subject to the provisions of the following sentence, the
Lessee shall not use or connect any equipment or engage in any activity or
operation in the premises which will cause an overloading of the capacity of any
then existing 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 unreasonably interferes with the effectiveness or
accessibility of then existing utility, mechanical, electrical, communication or
other systems or portions thereof on the premises or elsewhere at the World
Trade Center. The Port Authority hereby represents and warrants to the Lessee
that the system for the supply of electricity to the Lessee has and throughout
the term of this Agreement, including any extension of said term, shall have the
capacity per usable square foot set forth in paragraph (c) of the Section of
this Agreement entitled "Services and Utilities" and hereby made a part hereof.
(d) The Lessee shall not overload any floor, roadway,
passageway, pavement or other surface or any wall, partition, column or other
supporting member (but nothing herein shall be construed to prevent the Lessee
from increasing the load bearing capacity of any floor, by performing
reinforcement work subject to the applicable provisions of the Section of this
Agreement entitled
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"Construction by the Lessee"), 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 the damaged
portion of any such floor, roadway, passageway, pavement or other surface, wall,
partition, column or other supporting member, or elevator or other conveyance,
to the extent such damage was caused by the Lessee's overloading. The Port
Authority hereby represents and warrants to the Lessee that, as of the Lease
Commencement Date, the "live load" capacity of the premises shall be as shown on
Schedule D attached hereto and hereby made a part hereof.
(e) Subject to the following provisions of 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,
provided, that, subject to all of the terms and provisions of this Agreement,
including without limitation thereto the Section thereof entitled "Services and
Utilities", the Lessee and the Permitted Occupants may install facilities
(including those customarily found in a small kitchenette such as a ▇▇▇▇▇ unit
or microwave oven, sink, refrigerator, vending machines and hot tea and coffee
dispensing equipment) for a cafeteria or kitchen or for the warming and serving
of food and beverages, both alcoholic and non-alcoholic, to be consumed on the
premises solely by the Lessee's or the Permitted Occupants' officers, members,
employees, agents, representatives, contractors and business guests and
invitees, or arrange for the installation and operation of such equipment
provided that if such facilities are operated or supplied by an independent
contractor, operator or supplier, such contractor, operator or supplier shall be
approved by the Port Authority. The Port Authority shall not act unreasonably in
determining whether or not to approve the use of any such independent
contractor, operator or supplier. None of the foregoing equipment or machines
shall be installed unless and until the Port Authority has consented in writing
to the type of machine or equipment, the method of installation and the location
where such machine or equipment may be installed, either separately or as part
of the Port Authority's approval of the Lessee's Construction Application
relating to the construction and installation of such machine or equipment
pursuant to the Section of this Agreement entitled "Construction by the Lessee",
provided, however, that the Port Authority's consent shall not be required for
the installation of any such equipment or machine if the Port Authority's
consent would not be required pursuant to said Section of this Agreement
entitled "Construction by the Lessee". In the event the installation of such
machines and equipment shall require modifications or alterations to building
systems or equipment (including heating, ventilating or air-conditioning
systems) and whether such modifications or installations thereof are performed
by the Lessee or by the Port Authority, the Lessee shall be responsible for the
cost of such machines and equipment, the installation thereof and any such
modifications or alterations and no such installation, alteration or
modification shall be commenced until the Lessee has received an approved
Construction Application (in the form referred to in the Section of this
Agreement entitled "Construction by the Lessee") therefor (but only to the
extent the same is required under the Section of this Agreement entitled
"Construction by the Lessee"). The Lessee shall pay to the Port Authority for
domestic cold and hot water and for any and all utilities or other building
services used in connection with any eating facilities or any of the aforesaid
machines and equipment, in each case, to the extent provided in the Section of
this Agreement entitled "Services and Utilities", it being understood that the
Port Authority shall have the right to install a meter on the Lessee's premises
at the Port Authority's cost to measure the Lessee's consumption of such
domestic hot and cold water. The Lessee agrees that no recognizable or
measurable odors will emanate from the premises as a result of its intended use
of any such machines and equipment installed by the Lessee and the Lessee
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covenants and agrees that upon notification from the Port Authority that
objectionable odors emanate from the premises as a result of the Lessee's use of
any such machines and equipment in the premises (whether through the building
heating, ventilating or air-conditioning systems or otherwise), the Lessee will
immediately discontinue use of any such machine or equipment and shall not
resume the use or operation thereof until such machine or equipment has been
repaired or modified so as to prevent the emanation of such objectionable odors.
(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), "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 (herein called the "Statutes"). The Statutes provide
that the Port Authority should be regarded as performing an essential
governmental function in the construction and operation of the World Trade
Center and that all details of the effectuation of the World Trade Center
including the leasing and contracts thereof shall be within the sole discretion
of the Port Authority and its decisions shall be controlling and conclusive and
that it is of the essence of the Statutes and of this Agreement that the Port
Authority retain in its sole discretion the determination of all matters
concerning the World Trade Center including the occupancy of the World Trade
Center. Accordingly, 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 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.
The Lessee further acknowledges for itself and for any successor to its interest
in this Agreement that this Agreement cannot be assigned or a sublease entered
into by the Lessee without the prior written consent of the Port Authority
except in accordance with the provisions of the Section of this Agreement
entitled "Assignment and Sublease", provided, that nothing in this Section is
intended or shall be deemed to increase, decrease or otherwise alter the
specific requirements for subleasing or assignment set forth in the Section of
this Agreement entitled "Assignment and Sublease".
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 reasonably 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. Nothing in this Section shall
require the Lessee to clean the exterior surface of window glass in the
premises.
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(b) Subject to the provisions of the Section of this Agreement
entitled "Casualty" and the Section of this Agreement entitled "Insurance", the
Lessee shall repair, replace, rebuild and paint all or any part of the premises
which may be damaged or destroyed by the wilful misconduct or negligent acts or
omissions of the Lessee, its officers, members, employees, agents,
representatives, contractors, customers, guests, invitees or other persons who
are doing business with the Lessee or who are on or at the premises (other than
the Port Authority or any of its Commissioners, members, officers, employees,
agents, representatives or contractors) and the Lessee shall repair, replace,
rebuild and paint all or any part of the World Trade Center which may be damaged
or destroyed by the wilful misconduct or negligent acts or omissions of the
Lessee, its officers, members, employees, agents, representatives or
contractors, provided, that nothing in this paragraph (b) is intended, or shall
be deemed, to increase, decrease or otherwise alter the obligations of the
Lessee or the Port Authority in the event that the premises or the World Trade
Center are damaged by a casualty, which obligations shall be as provided in the
Sections of this Agreement entitled "Casualty" and "Insurance".
(c) Subject to the provisions of the Section of this Agreement
entitled "Casualty" and, the Section of this Agreement entitled "Insurance", the
Lessee shall take good care of the premises, including therein, without
limitation thereto, walls, partitions, floors, ceilings, doors and columns, and
all parts thereof, and all equipment and fixtures, and except to the extent the
same is the responsibility of the Port Authority pursuant to the express
provisions of this Agreement, shall do all preventive maintenance and make all
necessary non-structural repairs, replacements, rebuilding and painting
necessary to keep each Area of the premises in the condition existing on the
Commencement Date for that Area and to keep any improvements, additions and
fixtures made or installed during the term of the letting in the condition they
were in when made or installed except for reasonable wear and tear which does
not adversely affect the watertight condition or structural integrity of the
Building. Nothing set forth in this paragraph (c) is intended or shall be deemed
to impose upon the Lessee an obligation to maintain, repair, replace or rebuild
any portion of the exterior building walls other than the interior drywall or
gypsum board surfaces thereof (and without limiting the foregoing the Lessee
shall not be required to repair the exterior, structural portions or the window
glass forming a part of such exterior walls), floor slabs, structural steel
members and core walls or to rebuild, repair or replace (except for damage
thereto caused by the willful misconduct or negligent acts or omissions of the
Lessee, its officers, directors, members, agents, contractors and
representatives): (1) the perimeter convector units in the premises; (2) the
vertical aspects of any utility, mechanical, electrical, communication and other
systems passing through the premises which provide services and utilities to the
Lessee or other parties of the premises; and (3) the utility, mechanical,
electrical, communication and other systems outside of the premises which
provide services and utilities to the premises or to clean the exterior side of
exterior building walls, unless such walls, slab, members or systems shall have
been damaged by the willful misconduct or negligent acts or omissions of the
Lessee, its officers, members, employees, agents, representatives or
contractors, in which case the Lessee shall have the obligations set forth in
paragraph (b) of this Section, nor is anything set forth in paragraph (b) of
this Section or in this paragraph (c) intended nor shall it be deemed to
increase, decrease or otherwise alter the obligations of the Lessee and the Port
Authority in the event that the premises or the World Trade Center are damaged
by a casualty, which obligations shall be as provided in the Sections of this
Agreement entitled "Casualty" and "Insurance", nor shall anything in this
Section increase, decrease or otherwise alter the obligations of the Lessee and
the Port Authority set forth in of the Section of this Agreement entitled "Port
Authority Work", including without limitation thereto the parties' obligations
set forth therein relating to the abatement of Hazardous Materials, nor shall
anything in this Section relieve the Lessee from the obligation to obtain the
approval of the Port Authority under the circumstances described in the Section
of this Agreement entitled "Construction by the Lessee".
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(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 thirty (30) days after notice from the Port Authority so to
do (other than by reason of causes and conditions beyond the Lessee's control),
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, other than
by reason of causes and conditions beyond the Lessee's control, 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
out-of-pocket cost thereof to be paid by the Lessee within thirty (30) days
after demand therefor (which demand will include receipts or other reasonable
evidence of the Port Authority's costs). This option or the exercise thereof
shall not be deemed to create or imply any obligation or duty to the Lessee or
others.
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 other areas of the World Trade Center, are damaged
so as to render the premises untenantable or inaccessible in whole or part, then
the Port Authority within forty-five (45) days after the occurrence of such
casualty shall provide the Lessee in writing with a statement from its Chief
Engineer setting forth his good faith estimate of the time necessary to complete
the repairs and rebuilding caused by such casualty. The term "Estimate" as used
herein shall mean the estimate of the Chief Engineer of the Port Authority of
the time necessary for completion of such repairs and rebuilding.
(1) If the Estimate provides that the necessary repairs or
rebuilding can be completed within three hundred sixty five (365) days
after the occurrence of the damage, and provided that this Agreement
has not been terminated by the Port Authority or the Lessee as
hereinafter provided, the Port Authority shall, at its own cost and
expense (provided, that nothing in this subdivision (1) shall be deemed
to waive or release any claim of the Port Authority against the
proceeds of insurance which may be available to cover the cost of
repairing or rebuilding such damage, whether such insurance is
maintained by the Port Authority, the Lessee or others) repair or
rebuild such damaged portions of the premises and the World Trade
Center with due diligence (including, in the case of the premises, all
alterations or improvements thereto made during the term of the letting
under this Agreement, whether made therein by the Port Authority or by
the Lessee with the approval of the Port Authority, to the extent such
approval is required under this Agreement, and subject to the
provisions of paragraph (f) of this Section, 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) thirty (30) days after notification
by the Port Authority to the Lessee of the completion of the repairs or
rebuilding, whether or not the work of repair or rebuilding is actually
completed within the said three hundred sixty five (365) days, or (ii)
the commencement of business operations by the Lessee in the premises
or the damaged portion thereof, as the case may be (it being understood
that Lessee shall not be deemed to have commenced business operations
solely by reason of occupancy for the performance of alterations and
installation of property), provided, that if the Estimate provides that
the necessary repairs or rebuilding can be completed within the three
hundred sixty-five (365) day period following the occurrence of the
damage and such repairs or rebuilding have not actually been completed
within thirty (30) days (hereinafter called the "Thirty Day Period")
after the end of such three hundred
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sixty-five (365) day period, and, provided, further, that at no time
during the term of the letting up to the expiration of such Thirty Day
Period did the Lessee have the right pursuant to paragraph (b) of this
Section 9 to terminate this Agreement, then the Lessee shall have the
right, by notice given to the Port Authority not later than sixty (60)
days subsequent to the end of such Thirty Day Period and prior to the
completion of such repairs or rebuilding, to terminate the letting of
the entire premises under this Agreement with the same effect as
expiration, such termination to be effective on the date specified in
the Lessee's notice but not later than one hundred eighty (180) days
following the date of the Lessee's notice; it being understood that in
the event of termination by the Lessee pursuant to this subparagraph
(1) the rental hereunder shall be abated as hereinafter provided in the
Section of this Agreement entitled "Abatement of Rental" for the period
from the occurrence of the damage to the effective date of termination;
or
(2) if the Estimate provides that such repairs or rebuilding
cannot be completed within three hundred sixty five (365) days after
the occurrence of the damage, then the Port Authority shall have the
options: (i) to proceed with due diligence to repair or to rebuild the
premises as necessary; or (ii) subject to the provisions of
subparagraph (3) below, to terminate the letting as to the entire
premises by notice given to the Lessee within forty-five (45) days
after the delivery to the Lessee of the statement setting forth the
Estimate, such termination not to be effective earlier than one hundred
eighty (180) days after such termination notice is given to the Lessee
and, subject to the provisions of paragraph (f) of this Section, the
rental hereunder shall be abated, as provided in the Section of this
Agreement entitled "Abatement of Rental" either, as the case may
require, (x) for the period from the occurrence of the damage to the
earlier of thirty (30) days after notification by the Port Authority to
the Lessee of the completion of the repairs or rebuilding, whether or
not the work of repair or rebuilding is actually completed within said
three hundred sixty-five (365) day period or the commencement of
business operations by the Lessee in the premises or the damaged
portion thereof, as the case may be (it being understood that the
Lessee shall not be deemed to have commenced business operations solely
by reason of occupancy for the performance of alterations and
installation of property) or (y) from the period of the occurrence of
the damage to the effective date of termination; or
(3) Notwithstanding the provisions of subdivision (ii) of
subparagraph (2) above of this paragraph (a), the Port Authority shall
not have the right to terminate the letting as to the entire premises
pursuant to said subdivision (ii) unless the Port Authority elects not
to rebuild as office space all the space from and above the 90th floor
in the Building damaged by such casualty and used as office space prior
to the occurrence of such casualty.
Neither the three hundred sixty five (365) day period for completion of the
repair or rebuilding nor the additional Thirty Day Period thereafter for
completion of the repair or rebuilding, nor any notice period in this paragraph
(a) shall be extended by reason of a cause or condition beyond the control of
the Port Authority; but the Port Authority shall have no liability to the Lessee
by reason of a failure to complete any repair or rebuilding required by this
Section within the estimated time period, the specific termination rights set
forth in this paragraph (a) and paragraph (b) below of this Section being the
Lessee's sole remedy for any such failure to complete any such repairs or
rebuilding unless the Port Authority fails to comply with its obligation,
subject to causes and conditions beyond its control, to diligently proceed to
perform the repairs or rebuilding resulting from such casualty. Nothing in the
foregoing shall be construed to deny the Lessee a right to abatement of basic
and additional basic rental where same is specifically provided for in this
Section.
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(b) Notwithstanding anything in paragraph (a) of this Section
to the contrary, if the Estimate provides for completion of the repairs and
rebuilding within three hundred sixty-five (365) days after the occurrence of
the casualty, the Lessee may request from time to time (but in no event no
earlier than one hundred twenty (120) days after the occurrence of the casualty
nor more often than once in any ninety (90) day period thereafter) by written
notice to the Port Authority that the Port Authority deliver to Lessee updated
estimates with respect to the anticipated completion date of the repair and
rebuilding work (each of such updated estimates being sometimes herein called a
"Revised Estimate"). All Revised Estimates shall be delivered to Lessee within
thirty (30) days after Port Authority's receipt of Lessee's request therefor and
shall contain the estimate of the Port Authority's Chief Engineer of the
completion date of the repair and rebuilding work. A "Materially Revised
Estimate" shall be a Revised Estimate with an anticipated completion date of
such repair and rebuilding work later than all of the following: (x) three
hundred ninety-five (395) days after the occurrence of the damage, (y) the
expiration of the time period set forth by the Chief Engineer in the initial
Estimate as the completion date for the repair and rebuilding work, plus thirty
(30) days and (z) the completion date for the repair and rebuilding work
theretofore set forth in the most recently delivered Revised Estimate, plus
thirty (30) days. In the event that the Lessee (at the Lessee's request or at
the Port Authority's initiative) shall have received a Materially Revised
Estimate, the Lessee shall have a further right to terminate this Agreement and
the letting thereunder upon written notice to the Port Authority given not later
than sixty (60) days following the Lessee's receipt of such Materially Revised
Estimate provided such repair and rebuilding work is not completed prior to
receipt of such notice by the Port Authority, and such termination shall be
effective on the date specified in the Lessee's notice but in no event later
than one hundred eighty (180) days from the date of such notice. In the event
the Lessee shall not elect to terminate this Agreement within the sixty (60) day
period set forth above, the Lessee also shall not thereafter have a right to
terminate this Agreement under this paragraph (b) with respect to the casualty
in question unless and until Lessee shall receive another Materially Revised
Estimate or unless the actual completion date is later than the date (the
"Outside Revised Estimate Date") which is the latest of all of the following:
(A) the estimated completion date set forth in the last Revised Estimate, plus
thirty (30) days, (B) the three hundred ninety-fifth (395th) day after the
occurrence of the damage, and (C) the date set forth by the Chief Engineer in
the initial Estimate as the completion date for the repair and rebuilding work,
plus thirty (30) days; and the Lessee exercises its right to terminate not later
than sixty (60) days after the Outside Revised Estimate Date. provided, that
such notice of termination from the Lessee shall not be effective if the actual
completion date occurs prior to receipt by the Port Authority of such notice of
termination from the Lessee. Anything to the contrary notwithstanding, the
Lessee shall also have the right to terminate this Agreement upon written notice
to the Port Authority if the Port Authority shall fail both to deliver to Lessee
a Revised Estimate within thirty (30) days after Lessee's request therefor and
shall further fail within five (5) business days after a second written request
by Lessee for same to deliver same to the Lessee, provided, such notice of
termination from the Lessee shall not be effective if the actual completion date
occurs prior to receipt by the Port Authority of such notice of termination from
the Lessee. Any termination by the Lessee pursuant to this paragraph (b) shall
be effective on the date specified in Lessee's notice but in no event later than
one hundred eighty (180) days from the date of such notice. No termination by
the Lessee under this paragraph (b) shall be effective if at the time of the
attempted exercise thereof the Lessee is under a notice of termination from the
Port Authority. Termination of this Agreement and the letting hereunder by the
Lessee pursuant to this paragraph (b) shall be with the same force and effect as
expiration.
(c) 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.
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(d) The Lessee shall give the Port Authority prompt 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
the Lessee and involves the Lessee, its officers, members, employees, agents,
representatives, contractors, customers, guests or invitees.
(e) 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
furniture, equipment, trade fixtures and other personal property from the
premises or the portion thereof destroyed, as the case may be, and if the Lessee
does not promptly so remove, the Port Authority may after giving the Lessee ten
(10) business days' prior notice of such may remove the Lessee's property to a
public warehouse for deposit or retain the same in its own possession and at its
discretion upon sixty (60) days prior notice to the Lessee may sell the same at
either public auction or private sale, the proceeds of which shall be applied
first to the reasonable out-of-pocket expenses of the Port Authority in
connection with such 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 Port Authority upon
demand.
(f) If the damage to the premises or other areas of the World
Trade Center was caused by the fault of the Lessee, its officers, members,
employees, agents, representatives and contractors, then, notwithstanding the
provisions of paragraph (a) above, 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 effect in connection with the
damage (or would have been entitled to receive rental insurance proceeds
assuming the Port Authority was in compliance with the terms and conditions of
its rental insurance policy and such policy is customarily carried by owners of
first-class office buildings in Manhattan containing no less than one million
(1,000,000) rentable square feet)(such owners being hereinafter referred to in
this Agreement as "First Class Owners") or would have been entitled to receive
such proceeds if the Port Authority had carried a policy of rental insurance
providing such proceeds, provided such policy of rental insurance is then
available on commercially reasonable terms to First Class Owners, provided,
however, that if at any time because of this provision for abatement the
insurance carrier of any policy covering the premises or any part thereof shall
increase the premiums otherwise payable for any policy of fire, extended
coverage, or rental coverage applicable to the premises and it is then customary
for insurance carriers to impose an increased premium on First Class Owners with
respect to such provision for abatement, the Lessee shall pay to the Port
Authority within thirty (30) days after demand an amount equivalent to the
product obtained by multiplying such increase or increases by the Lessee's
Proportionate Share as defined in Schedule A or Schedule A-1, whichever is in
effect at such time, (it being understood that the amount of such increase shall
not be included as an Operating Expense in Schedule A or Schedule A-1, as the
case may be) and in the event the Lessee elects not to so pay the Lessee's
Proportionate Share of such increase to the Port Authority the same shall not
constitute a default hereunder, but the Lessee shall not be entitled to such
rent abatement; and provided, further, that if at any time this provision for
abatement shall invalidate any such policy of insurance or void the rights of
the Port Authority thereunder or if because of this provision for abatement any
such carrier shall cancel any such policy or shall refuse to issue or renew the
same or shall take any other action to materially alter, decrease or diminish
the benefits of the Port Authority under the policy, then this provision for
abatement shall be void and of no effect unless it is customary for First Class
Owners to carry a policy of rental insurance providing for the rent abatement
described in this paragraph (f) without the restrictions and conditions set
forth in this proviso. Nothing contained in this paragraph (f) shall be deemed
to obligate the Port Authority to
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maintain or procure any policy of fire, extended coverage, or rental coverage
applicable to the premises.
(g) In the event that, as a result of a casualty not insurable
under the New York standard form of fire insurance policy and extended coverage
and not caused by the fault of the Lessee, its officers, members, employees,
agents, representatives or contractors, the premises, or other areas of the
World Trade Center, are damaged so as to render the premises untenantable or
inaccessible in whole or in part, then the following provisions shall apply. The
Port Authority shall have no obligation to repair, rebuild or restore the damage
caused by such casualty but the rental hereunder shall be abated as provided in
subdivision (i) of subparagraph (1) of paragraph (a) of this Section with the
same force and effect as if the damage resulted from a casualty insurable under
the New York standard form of fire insurance and extended coverage. Within
forty-five (45) days after the occurrence of the casualty, the Port Authority
will notify the Lessee (hereinafter in this paragraph (g) called the "Casualty
Notice") as to whether the Port Authority elects to repair, rebuild or restore
the damage caused by such casualty and if the Port Authority does so elect to
repair, rebuild or restore the Casualty Notice shall contain an estimate from
the Chief Engineer of the Port Authority setting forth his good faith estimate
of the time necessary to complete such repairs and rebuilding. The term
"Estimate" as used herein to have the same meaning as provided in paragraph (a)
of this Section. In the event that the Port Authority has elected to repair,
rebuild and restore the damage caused by such casualty and the Estimate provides
that the necessary repairs or rebuilding can be completed within three hundred
sixty-five (365) days after the occurrence of the damage, then the provisions of
subparagraph (1) of paragraph (a) of this Section 9 shall be applicable with the
same force and effect, except as hereinafter specifically provided otherwise, as
if the damage resulted from a casualty insurable under the New York standard
form of fire insurance policy and extended coverage endorsement. In the event
that the Port Authority has elected to repair, rebuild and restore the damage
caused by such casualty and the Estimate provides that the necessary repairs or
rebuilding cannot be completed within three hundred sixty-five (365) days after
the occurrence of the damage, then the provisions of subparagraph (2) of
paragraph (a) of this Section 9 shall be applicable with the same force and
effect, except as hereinafter specifically provided otherwise, as if the damage
resulted from a casualty insurable under the New York standard form of fire
insurance policy and extended coverage endorsement except that the Port
Authority's right to terminate the letting of the premises in its entirety as
set forth in said subparagraph (2) shall not be applicable. In the event the
Port Authority's Casualty Notice states that the Port Authority will not make
the repairs or rebuilding resulting from such casualty, then, and subject to the
provisions of paragraph (h) of this Section, the term of the letting as to the
premises shall be deemed terminated as of the date set forth in such Casualty
Notice. Any termination hereunder shall be with the same force and effect as
expiration.
(h) In the event the Port Authority elects not to restore,
repair and rebuild the damage caused by a casualty of the type described in the
first sentence of paragraph (g) above and the Lessee does not elect to terminate
the letting pursuant to said paragraph (g), then the Lessee by written notice
given to the Port Authority no later than sixty (60) days after receipt of the
Port Authority's Casualty Notice may elect at its cost and expense to repair and
restore the premises or the damaged portion thereof, provided the Lessee shall
only be permitted to so restore and rebuild if (x) the casualty damaged solely
the Lessee's premises and common areas on the floors of Lessee's premises or (y)
the casualty damaged areas at the World Trade Center in addition to the Lessee's
premises and all such damage off the premises is to be restored and rebuilt by
the Port Authority or other occupants at the World Trade Center. In the event
the Lessee elects to rebuild and restore pursuant to and in accordance with the
provisions of the preceding sentence then the Port Authority's Casualty Notice
shall be null and void, the Lessee shall promptly commence and diligently
prosecute to completion in accordance with the provisions of this Agreement
entitled "Construction by the
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Lessee" the necessary repair and rebuilding work for the premises and the common
areas on the floors of the Lessee's premises and the Lessee shall be entitled to
an abatement of basic rental and additional basic rental in accordance with the
provisions of the Section of this Agreement entitled "Abatement of Rental" from
the occurrence of the damage to the day preceding the date the Lessee commences
business operations in the damaged portion of the premises or such earlier date
as is set forth in the Estimate referred to in paragraph (g) above as the
reasonable time period necessary to complete such repairs and rebuilding, such
date in the Estimate to be extended by the number of days the Lessee is actually
delayed in performing such repair and rebuilding work due to causes and
conditions beyond the control of the Lessee.
Section 10. Indemnity
(a) Subject to the provisions of the Section of this Agreement
entitled "Insurance", 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 reasonable out-of-pocket
costs or expenses including reasonable out-of-pocket legal expenses incurred in
connection with the defense of) all claims and demands of third persons
including but not limited to those for death, for bodily 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 willful misconduct or negligent 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 willful misconduct or
negligent acts or omissions are on the premises, or arising out of any willful
misconduct or negligent acts or omissions of the Lessee, its officers, members,
employees, agents, representatives and contractors where such willful misconduct
or negligent acts or omissions are elsewhere at the World Trade Center
(provided, that such negligent acts or omissions or willful misconduct of the
Lessee's employees, agents, representatives and contractors while elsewhere at
the World Trade Center occur while they are acting in such capacity) excepting
only claims and demands to the extent the same result from the willful
misconduct or negligent acts or omissions of the Port Authority, its
Commissioners, officers, employees, agents, representatives, contractors,
customers, guests or invitees where such willful misconduct or negligent acts or
omissions are on the premises or to the extent such willful misconduct or
negligent acts or omissions of the Port Authority, its Commissioners, officers,
employees, agents, representatives, and contractors occur 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 Commissioners, officers, agents or employees, the governmental
nature of the Port Authority or the provision of any statutes respecting suits
against the Port Authority. In the event that an action to recover amounts based
on any such claim or demand is commenced against the Port Authority, the Port
Authority will notify the Lessee of such commencement, as soon as practicable
after the service on the Port Authority of the papers commencing such action,
and shall promptly forward copies of the papers commencing such action to the
Lessee. Nothing in this Section shall be deemed to prohibit the Lessee from
selecting its own counsel or utilizing counsel for the Lessee's insurer in
connection with the Lessee's defense of any suit based on any claim or demand
set forth in paragraph (a) of this
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Section or be deemed to prohibit the Lessee from settling any such claim or
demand so long as such settlement does not require any payment from the Port
Authority or from any other indemnified party.
Section 11. Ingress and Egress
(a) The Lessee solely for itself and for its Permitted
Occupants and its and their officers, members, employees, agents,
representatives, contractors, and such customers, guests and other business
invitees shall have the right of ingress and egress between the premises, the
Concourse Level of the World Trade Center and the streets outside the World
Trade Center twenty-four (24) hours per day, three hundred sixty-five (365) days
per year (except in case of emergency, casualty or causes or conditions beyond
the control of the Port Authority) subject to such security arrangements and
reasonable rules and regulations that may be imposed by the Port Authority from
time to time, provided, such rules and regulations are imposed in accordance
with the provisions of the Section of this Agreement entitled "Rules and
Regulations". In addition 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, subject to the following provisions hereof. 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
pursuant to the Section of this Agreement entitled "Rules and Regulations" 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
and the common areas are maintained in a manner consistent with the manner in
which they are maintained on the date of this Agreement. Nothing in the
immediately preceding sentence shall be construed to diminish the Port
Authority's obligations pursuant to the Section of this Agreement entitled
"Services and Utilities". 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. In addition thereto, the Lessee and its Permitted Occupants
and its and their officers, members, employees, agents, representatives,
contractors, customers, guests, members and others doing business with them,
subject to the rules and regulations of the Port Authority which are now in
effect or which may hereafter be promulgated pursuant to the Section of this
Agreement entitled "Rules and Regulations" for the safe and efficient operation
of the Facility, shall have the right to use the common areas of the Facility
designated by the Port Authority for use by the general public during such times
as the Port Authority permits the use of such common areas by the general public
and by all tenants of the World Trade Center. The Lessee understands that the
Port Authority shall have the right in its sole discretion to designate and
redesignate from time to time which common areas at the Facility may be used by
the general public and during which times they may be so used, provided, that
nothing herein shall be construed to alter the provisions of the first sentence
of this paragraph (a).
(b) Except when an emergency condition renders ingress and
egress unsafe or impracticable, and subject to the provisions of the Section of
this Agreement entitled "Force Majeure", the Lessee, its Permitted Occupants and
its and their officers, members, employees, agents, representatives,
contractors, and such customers, guests and other business invitees may
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exercise the right of ingress or egress provided in paragraph (a) of this
Section, twenty-four (24) hours per day, three hundred sixty-five (365) days per
year, provided, that the Lessee understands that reduced elevator service is
available outside of normal business hours as set forth in the Section of this
Agreement entitled "Services and Utilities" and that the Lessee and Permitted
Occupants, officers, members, employees, agents, representatives, contractors,
customers, guests and invitees may be subject to additional security checks
outside of normal business hours. The Lessee acknowledges that the Port
Authority and its contractors will be required to retain personnel to perform
work and to provide utilities and services in the event that the Lessee shall
use the premises outside of normal business hours, and for that reason imposes
the charges for the use of freight elevator service and heating, ventilation and
air-cooling outside of normal business hours set forth in the Section of this
Agreement entitled "Services and Utilities". Except as expressly provided in
paragraph (a) of the Section of this Agreement entitled "Services and Utilities"
with respect to certain freight elevator service and except as provided in the
last sentence of this paragraph (b), the Lessee hereby agrees to pay to the Port
Authority the charges for the use of heat, ventilation and air-cooling services
outside of normal business hours as set forth in the Section of this Agreement
entitled "Services and Utilities" and the charges established by the Port
Authority for freight elevator services outside of normal business hours, as
such charges may be increased from time to time, as well as charges for any
other services for which charges are in the future generally imposed by the Port
Authority at the World Trade Center for usage outside of normal business hours,
it being understood that the Lessee shall be required to pay such charges only
when the specific services or utilities for which such charges are imposed have
been requested or ordered by the Lessee, it being further understood that the
Port Authority shall have no obligation to provide such services or utilities to
the Lessee outside of normal business hours unless such are specifically
requested by the Lessee, provided, that except as set forth in paragraph (f) of
the Section of this Agreement entitled "Services and Utilities", the Port
Authority will not impose a charge for the use outside of normal business hours
of services which are on the date of this Agreement provided without charge
during such periods, but nothing herein shall be deemed to prohibit the Port
Authority from charging for new or additional services provided to the Lessee
during such periods or from time to time increasing the existing charges imposed
on existing services except to the extent specifically provided otherwise in the
Section of this Agreement entitled "Services and Utilities". The Port Authority
shall not impose a charge for the use of services outside of normal business
hours in such manner as to discriminate against the Lessee.
Section 12. Construction by the Lessee
(a) Except as provided in paragraphs (i) and (j) of this
Section, 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 substantial injury to the
premises) without the prior consent of the Port Authority, which shall not be
arbitrarily and capriciously withheld, and the Port Authority shall not withhold
such Consent except for reasons of safety, health, operational utility, impact
on or compatibility of the proposed work on building systems, or other parts of
the World Trade Center, or unless the proposed work, in the opinion of the Port
Authority's Chief Engineer, acting in a non-arbitrary and non-capricious manner,
shall fail to comply with (i) all governmental laws, ordinances, enactments,
resolutions, rules and orders, including, without limitation, the enactments,
ordinances, resolutions, and regulations of the City of New York and its various
Departments, Boards and Bureaus that are applicable, or which would be
applicable if the Port Authority were a private corporation, or (ii) all
applicable requirements of the Port Authority's Tenant Construction Review
Manual (hereinafter called the "Tenant Design Guide") issued by the
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Port Authority Engineering Department dated March, 1984, revised March, 1990,
together with Amendment No. 1 dated October 1990 (as the same may be further
amended in a non-arbitrary and non-capricious manner prior to the date the
Lessee submits its plans and specifications) (the foregoing requirements in
clauses (i) and (ii) hereinafter in this Agreement called the "Standards").
Except as provided below in this paragraph (a), any construction, improvement,
alteration, modification, addition, repair or replacement made by or on behalf
of Lessee, whether prior to or during the term, shall become the property of the
Port Authority (subject to Lessee's right to use the same during the term of
this Agreement and, to remove, modify, alter, improve, repair or replace the
same in connection with construction and installation work performed in
accordance with this Section 12 or otherwise in connection with the performance
of Lessee's rights and obligations under this Agreement, provided, that any such
removal, modification, alteration, improvement, repair or replacement shall be
made in accordance with the applicable provisions of this Agreement, including
but not limited to this Section 12). 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 (but only to the extent such consent was required
hereunder), and in the case of any of the same made or done with the Port
Authority's consent, the Lessee if so required by notice from the Port
Authority, shall remove or change the same on or prior to the expiration of the
letting under this Agreement or within thirty (30) days after any earlier
termination thereof, provided, that the Lessee shall not be required to remove
or change any of the same made with the explicit consent of the Port Authority
except for any security vaults, cafeterias, kitchens and other particular items
which may be specified by the Port Authority in its approval of the Lessee's
construction applications and which are not typically installed in an ordinary
business office, which vaults, cafeterias, kitchens and other installations
shall be removed by the Lessee, upon the expiration of the letting under this
Agreement or within thirty (30) days after any earlier termination thereof, as
provided in the Section of this Agreement entitled "Surrender" and all
penetrations of the floor slabs, other than those for one set of inter-floor
stairs connecting Area A and Area A-1 (which set, in case there are more than
one, shall be the one which the Lessee has selected not to remove, as provided
below), shall be repaired and restored, in the case of large openings, or capped
or covered, in the case of electrical, plumbing and similar utility openings, as
set forth in this Section, provided, further, that the Lessee shall not be
required to remove or restore one set of inter-floor stairs connecting Area A
and Area A-1 and constructed by it pursuant to this Section as part of its
construction and installation work in Area A and Area A-1 (which set, in case
there are more than one, shall be selected by the Lessee in its sole
discretion). The Lessee shall not be required to remove the Bathroom Work, as
defined in paragraph (m) of this Section, performed by it or to restore the
restrooms shown in horizontal hatching on Exhibit A and Exhibit A-1 attached to
this Agreement to their condition prior to the date of this Agreement at the
expiration or termination of the letting under 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, provided, that the Lessee shall not be
required to remove any modifications, additions, alterations, improvements,
installations or construction performed by the Port Authority pursuant to the
Section of this Agreement entitled "Port Authority Work". Any supplemental
heating, ventilation and air conditioning equipment, computer/data processing
equipment and raised flooring installed by or on behalf of the Lessee shall
remain the property of the Lessee, and upon the Expiration Date, the same shall
be removed from the premises by the Lessee and the Lessee shall repair and
restore in a good and workmanlike manner to a condition which is customary for
such removal in first class office buildings in the downtown area of Manhattan
any damage to the premises or the Building caused by such removal, provided,
that Lessee shall not be required to repair or restore any such damage to the
premises if the Port Authority has determined that it intends
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to demolish said space and if on the Expiration Date such determination has not
yet been made by the Port Authority then the Lessee shall have no obligation to
repair or restore such damage on the Expiration Date and if the Port Authority
determines subsequent to the Expiration Date not to demolish such space, the
Lessee will pay the Port Authority within thirty (30) days after request the
Port Authority's reasonable out-of-pocket costs to repair and restore such
damage. Nothing in this paragraph (a) shall be deemed to prohibit the Lessee
from removing, modifying, altering, improving, repairing or replacing the
Lessee's furniture, equipment, trade fixtures and other personal property at any
time during the term of the letting hereunder or upon the termination or
expiration thereof so long as the Lessee shall repair any damage to the premises
caused by such removal or other actions in accordance with the provisions of the
preceding sentence and the following sentence. In the event that the Lessee
removes electrical or plumbing fixtures, whether as part of its restoration work
or otherwise, the Lessee shall cap all altered electrical and plumbing lines
flush with walls, floors and ceilings.
(b) The Lessee has thoroughly examined and inspected the
premises and agrees to take each Area "as is" in the condition it is in on the
Commencement Date for that Area. Except as expressly provided otherwise herein,
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. Nothing in this paragraph (b) is intended, or shall
be deemed, to release the Port Authority from its obligations to provide the
services and utilities referred to the Sections of this Agreement entitled
"Responsibilities of the Lessee" and "Services and Utilities" and in Schedule D
attached hereto or from any of its other obligations expressly set forth in this
Agreement. Except as set forth in the Sections of this Agreement entitled "Port
Authority Work" and "Casualty", or specifically set forth elsewhere in this
Agreement, the Port Authority shall have no obligation hereunder for finishing
work or preparation of the premises for the Lessee's use. The Lessee agrees to
perform at its sole cost and expense, except as set forth in paragraph (k) of
this Section, or as expressly set forth elsewhere in this Agreement, 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, provided,
that nothing herein 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.
(c) Except as provided in paragraphs (i) and (j) of this
Section, 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 (which approval shall not be withheld if the proposed
work is in conformance with the Standards as determined by the Port Authority
acting in a non-arbitrary and non-capricious manner) a Tenant Alteration
(Construction) Application in the form (as such form may be amended from time to
time during the term of the letting under this Agreement for use generally by
office tenants at the Facility) annexed to this Agreement, hereby made a part
hereof and marked "Exhibit C") setting forth in detail and by appropriate plans
and specifications all of the construction and installation work the Lessee
proposes to perform and the manner of and estimated time periods for performing
such work. If the Port Authority arbitrarily and capriciously determines that
work proposed to be performed by the Lessee pursuant to this Section 12 is not
in conformance with the Standards and consequently withholds its approval with
respect to such proposed work (including, without limitation, any arbitrary and
capricious disapproval of the Lessee's plans and specifications) or if the Port
Authority
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arbitrarily and capriciously determines pursuant to paragraph (d)(1) of this
Section that work performed by the Lessee is not in accordance with the
Standards and consequently refuses to issue a temporary or permanent permit to
occupy the space where such work was performed or if the Port Authority
arbitrarily or capriciously determines pursuant to paragraph (d)(2) of this
Section that structural modifications or work involving connection of
facilities, equipment, lines, wires, pipes or ducts to the Building systems is
not in accordance with the Standards and consequently refuses to issue a consent
to use and/or occupy a particular portion of the premises, then nothing in this
Section 12 shall be construed to prevent the Lessee from exercising any rights
or seeking any remedies otherwise allowed to the Lessee at law or equity but
nothing herein shall be deemed to create any rights or remedies in the Lessee
that are otherwise not allowed at law or in equity. With respect to its initial
construction and installation work in the premises or any portion thereof the
Lessee may submit a separate construction application with respect to each Area
but each construction application shall cover all of the construction and
installation work proposed to be performed in such Area. In connection with the
performance by the Lessee of its initial work in the premises or any portion
thereof, there will be no charge imposed by the Port Authority for the filing of
such Construction Application, the review of the Lessee's plans and
specifications and inspection of the work except as specifically set forth in
said Construction Application and if the Lessee elects the Professional
Certification option set forth in Rider G of said Construction Application with
respect to any such initial work then any charges for said filing review and
inspection set forth in said Construction Application shall be deemed waived.
The Lessee shall not be required to perform any portion of its construction and
installation work during overtime periods or at overtime or premium pay rates
except for core drilling and other noisy or objectionable work which is
customarily required by landlords of first class office buildings containing no
less than one million (1,000,000) rentable square feet in the downtown area of
Manhattan to be performed during overtime periods. Except as provided in
paragraphs (i) and (j) of this Section, no construction and installation work
shall be commenced by the Lessee in any Area of the premises until the
construction application and plans and specifications covering the work to be
performed therein have been finally approved by the Port Authority, unless the
Lessee elects to submit its plans using the Professional Certification option
set forth in Rider G of such Construction Application, in which case such work
may only be commenced as set forth in subparagraph (2) of paragraph (d) of this
Section. In the event of any inconsistency between the provisions of this
Agreement and the construction application, the provisions of this Agreement
shall control. The Port Authority shall not charge any fees in connection with
the Lessee's performance of the construction and installation work, the Port
Authority's inspection of the construction and installation work or the Port
Authority's issuance of any temporary or permanent permit to occupy and/or use
the premises except for (i) the applicable fees set forth in the Construction
Application for review of the Construction Application and the plans and
specifications covering the construction and installation work, if the Lessee
does not elect the option for Professional Certification provided in this
Section, and (ii) the applicable fees and expenses charged to the contractor for
hoisting and trash removal as provided in the Construction Application and for
overtime freight elevator services as provided in the Section of this Agreement
entitled "Services and Utilities". The data to be supplied by the Lessee shall
describe in reasonable 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 in the premises all electrical distribution equipment
required, including but not limited to, service 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. Except as it may be specifically provided otherwise
elsewhere in this Section, the Lessee shall be responsible at its sole expense
for retaining all
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architectural, engineering and other technical consultants and services as may
be reasonably required by the Port Authority taking into account the nature of
the alteration, and for developing, completing and submitting detailed plans and
specifications for the work in form and detail sufficient to enable the Port
Authority to review the same in accordance with the provisions of this Section
12. 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
licensed in the State of New York, who shall be responsible for the
administration of the work, and shall be in sufficient detail for a contractor
to perform the work. The Lessee shall not engage any contractor unless and until
each such contractor shall have been approved by the Port Authority. The Lessee
shall include in each such contract or subcontract such provisions as are
required to be included therein pursuant to the provisions of the Construction
Application, provided, that such provisions do not expressly conflict with the
provisions of this Agreement. The Port Authority hereby approves the contractors
and the subcontractors selected by the Lessee and listed on the schedule annexed
to this Agreement, hereby made a part hereof and marked "Schedule C" (the
"Approved Contractor List") for the performance of the construction and
installation work required to prepare the premises for the Lessee's initial
occupancy (the "Lessee's initial construction and installation work"). In the
event that subsequent to the completion of the Lessee's initial construction and
installation work the Lessee is required or elects to perform any construction
or installation work in the premises, the Port Authority, within five (5)
business days of its receipt of a written request from the Lessee, shall advise
the Lessee whether any of the contractors or subcontractors on the Approved
Contractor List are not then approved for the performance of such work, and, if
so, which ones (it being understood that the Port Authority will not remove any
contractor or subcontractor from the List unless such contractor or
subcontractor fails to meet the requirements set forth in clauses (i), (ii) or
(iii) below). In the event the Port Authority fails to advise the Lessee as to
whether the status of those on the Approved Contractor List has changed and the
nature of such change within five (5) business days after receipt of the
Lessee's request therefor, all contractors and subcontractors on the Approved
Contractor List shall be deemed to remain approved. The Lessee shall not engage
any contractor or permit the use of any subcontractor not listed on the Approved
Contractor List, or which the Lessee has been advised has been removed from the
Approved Contractor List, unless and until each such contractor or subcontractor
shall have been approved by the Port Authority as hereinafter provided. In
considering the Lessee's requests for approval of contractors and subcontractors
not listed on the Approved Contractor List, the Port Authority shall within five
(5) business days after receiving the Lessee's written request therefor, advise
the Lessee of its approval or disapproval of the contractors and/or
subcontractors proposed by the Lessee and shall not disapprove of a contractor
or subcontractor unless such contractor or subcontractor (i) has been suspended,
debarred, or otherwise disqualified from bidding or submitting a proposal on
contracts by any governmental agency, (ii) has had a contract terminated by any
governmental agency for breach of contract or any cause directly or indirectly
related to an indictment or conviction, or (iii) unless the Port Authority,
acting in a non-arbitrary and non-capricious manner, shall determine that such
contractor or subcontractor will adversely affect or adversely interfere with
the Port Authority's operation of the World Trade Center, or will cause or
contribute to the causing of labor problems or labor disturbances thereat. In
the event the Port Authority fails to respond to the Lessee's request for
approval of a contractor or subcontractor not listed on the Approved Contractor
List within five (5) business days after receipt of the request therefor, such
contractor or subcontractor shall be deemed approved by the Port Authority.
(d) (1) Unless the Lessee shall elect the option for
professional certification described in subparagraph (2) of this paragraph (d),
the Port Authority will review each initial submission of a construction
application and plans and specifications and forward its comments thereon in
reasonable detail to the Lessee within twenty (20) days after the Port
Authority's receipt
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of the same and will review and comment on any resubmissions of corrected,
modified or amended plans and specifications within ten (10) days after the Port
Authority's receipt of the same. Upon completion of the construction and
installation work to be performed by the Lessee pursuant to the construction
applications and the final plans and specifications forming a part thereof
approved by the Port Authority, 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 qualified architect or professional engineer, each
certifying that the construction and installation work (other than "punch list"
items not affecting health, safety, fire resistance or life safety systems) has
been performed substantially in accordance with the construction applications
and the final plans and specifications approved by the Port Authority and the
applicable provisions of this Section and in compliance with all applicable
governmental laws, ordinances, enactments, resolutions, rules, regulations and
orders, including all such governmental laws, ordinances, enactments,
resolutions, rules, regulations and orders that would be applicable if the Port
Authority were a private corporation, and that all life safety items have been
completed strictly in accordance with the same. Within five (5) business days
after receipt of such certificates, the Port Authority shall (i) inspect the
construction and installation work and (ii) if such work has been substantially
completed as certified by the Lessee and its architect or engineer, deliver to
the Lessee a temporary or permanent permit to occupy the premises or the
applicable portion thereof in which such work is being performed, 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 the Lessee or, if such work has not been so completed, deliver
to the Lessee a statement setting forth in reasonable detail its reasons for not
issuing such permit. If with respect to a Construction Application the Port
Authority has failed to review the same or any resubmission of corrected,
modified or amended plans and specifications with respect to such Construction
Application or has failed to inspect the work performed by the Lessee pursuant
to such Construction Application within the time periods set forth herein, then
the total number of calendar days following the last day of the applicable
review period for each submission or resubmission or inspection period with
respect to such Construction Application through and including the day on which
the Port Authority submits its approval or disapproval to the Lessee shall be
deemed a "Delay Period". Subject to the provisions of the last sentence of this
subparagraph (1), with respect to each Construction Application with respect to
any construction work to be performed by the Lessee in any portion of the
premises (including without limitation thereto any Additional Space added to the
premises) the Port Authority shall grant the Lessee a credit against its basic
rental and additional basic rental obligations next becoming due under this
Agreement equal to the sum of:
(X) for each of the first thirty (30) days in the
Delay Period, one hundred percent (100%) of the "daily rate of basic
rental per rentable square foot" and one hundred percent (100%) of the
"daily rate of additional basic rental per rentable square foot" (both
as hereinafter defined) multiplied by the number of rentable square
feet in the portion of the premises in which the Lessee is performing,
or proposes to perform, work pursuant to such Construction Application;
(Y) for each of the next thirty (30) days in the
Delay Period, one hundred fifty percent (150%) of the daily rate of
basic rental per rentable square foot and one hundred fifty percent
(150%) of the daily rate of additional basic rental per rentable square
foot multiplied by the number of rentable square feet in the portion of
the premises in which the Lessee is performing, or proposes to perform,
work pursuant to such Construction Application; and
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(Z) for each calendar day in the Delay Period
thereafter, two hundred percent (200%) of the daily rate of basic
rental per rentable square foot and two hundred percent (200%) of the
daily rate of additional basic rental per rentable square foot
multiplied by the number of rentable square feet in the portion of the
premises in which the Lessee is performing, or proposes to perform,
work pursuant to such Construction Application;
provided, that, in the case of any Construction Application for other than the
initial construction and installation work to be performed in the premises, such
sum shall be prorated by multiplying it by a factor (hereinafter called the
"Cost Factor" for that Construction Application) equal to the lesser of (I) one
(1), or (II) a fraction, the numerator of which shall be the initial
construction contract price for the work described in that Construction
Application, and the denominator of which shall be Three Million Two Hundred
Fifty Thousand Dollars and No Cents ($3,250,000.00). For the purposes of this
Section 19, the terms "daily rate of basic rental per rentable square foot" and
the "daily rate of additional basic rental per rentable square foot" shall be
separately determined for each Delay Period and for each portion thereof during
which the credit is calculated at a different daily rate and shall be determined
by dividing either (i) the annual basic rental or the additional basic rental
(as the case may be) in effect during each such period (provided, that if the
basic rental or additional basic rental changes during any such period then the
basic rental and additional basic rental shall be averaged based upon the number
of days each such rental was in effect during such period) which basic rental or
additional basic rental is applicable to the portion of the premises in which
such work has been performed, or (ii) if no annual basic rental or additional
basic rental is then payable with respect to the portion of the premises in
which such work has been performed, the annual basic rental or the additional
basic rental (as the case may be) first payable thereafter with respect to such
portion of the premises, by the total number of rentable square feet as to which
such annual basic rental or additional basic rental is payable and by dividing
each of the quotients derived therefrom by three hundred sixty-five (365).
Notwithstanding anything herein to the contrary, the Lessee shall not be
entitled to a credit against its rental obligations hereunder nor shall the Port
Authority be subject to any liability to the Lessee if the Port Authority fails
to review any submission or resubmission of the Lessee's plans and
specifications or fails to inspect or reinspect the work performed by the Lessee
within the time periods for review and inspection set forth herein unless each
such submission or resubmission of plans and specifications, or the certificates
submitted by the Lessee and its qualified architect or professional engineer
pursuant to this subparagraph (1) certifying substantial completion of the work,
as the case may be, is accompanied by a conspicuous written statement (or,
thereafter, such conspicuous written statement is given but the time periods for
such review and inspection by the Port Authority for purposes of this sentence
shall not commence until such conspicuous written statement is given to the Port
Authority) on the front of such submission or resubmission from the Lessee
setting forth (i) the number of days provided in this Section for the review by
the Port Authority of such submission or resubmission as the case may be, of the
Lessee's plans and specifications or the time period for inspection, as the case
may be and (ii) the specific rent credits the Lessee will be entitled to for the
Port Authority's failure to so review or inspect within the applicable time
periods.
(2) In the event the Lessee elects the option for Professional
Certification as described in Rider G of Exhibit C attached to this Agreement,
then, notwithstanding the provisions of subparagraph (1) above the following
provisions of this subparagraph (2) shall be applicable to the Port Authority's
review of the Lessee's construction applications and plans and specifications.
The Port Authority shall review each construction application and the complete
plans and specifications forming a part thereof for purposes of determining the
proposed construction and installation work's compliance with the Standards and
shall forward its findings in reasonable detail to the Lessee and its licensed
architect or engineer, within ten (10) business days after the Port
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Authority's receipt of the construction application and the complete plans and
specifications forming a part thereof. The Lessee may commence the construction
and installation work set forth in the construction application and plans and
specifications attached thereto on the tenth (10th) business day following the
Port Authority's receipt of the construction application and such plans and
specifications, whether or not the Lessee has received the Port Authority's
findings, provided, that prior to commencing its construction and installation
work in the premises the Lessee shall meet with the Assistant Director-Physical
Facilities of the Port Authority's World Trade Department or his designee,
provided, further, that the Lessee may not commence any structural modifications
to be performed by it in the premises or connect any facilities, equipment,
lines, wires, pipes or ducts installed or modified by the Lessee to the building
systems providing services or utilities to the premises prior to the Lessee's
receipt of the Port Authority's findings and, if, as part of its findings, the
Port Authority has requested revisions or changes to the structural
modifications or connections to such building systems proposed by the Lessee,
the Lessee may not commence the structural modifications or the connections to
building systems, or both, as the case may be, with respect to which the Port
Authority has requested revisions or changes until the Lessee has submitted
corrected plans and specifications for such structural modifications or such
connections, or both, as the case may be, and the Port Authority has informed
the Lessee that the Port Authority has no further comments on such corrected
plans and specifications. The Port Authority will make the Assistant
Director-Physical Facilities of its World Trade Department or his designee
available to meet with the Lessee at the World Trade Center during normal
business hours within three (3) business days after request by the Lessee and if
the Assistant Director-Physical Facilities or his designee is not made so
available the Lessee may commence its construction work to the extent the Lessee
would be able to do so in accordance with the provisions of this subparagraph
(2) but for the failure to so meet with the Assistant Director-Physical
Facilities or his designee. If revisions or changes to any structural
modifications or connections to building systems to be performed by the Lessee
in the premises are requested by the Port Authority in its findings on the
Lessee's initial submission or on any resubmission requested by the Port
Authority, the Port Authority will review and comment on any resubmissions of
corrected, modified, revised or amended plans and specifications relating to
such structural modifications or to such connections within five (5) days after
such resubmissions are received by the Port Authority. If the Lessee shall
revise any other aspects of its plans and specifications subsequent to its
initial submission it may submit such revised plans and specifications to the
Port Authority but the Port Authority shall have no obligation to review any
revised plans and specifications submitted by the Lessee other than corrected
plans and specifications, if any, relating to revisions and changes requested by
the Port Authority to structural modifications or connections to building
systems proposed by the Lessee. Subject to the provisions of the last sentence
of this subparagraph (2), in the event that the Lessee elects the option for
Professional Certification as described in said Rider G for work in any portion
of the premises (including without limitation thereto any Additional Space added
to the premises) which includes structural modifications or connections to
building systems and the number of days actually required by the Port Authority
for any review of plans and specifications relating to such structural
modifications or connections to building systems shall exceed fifteen (15)
business days, or shall exceed five (5) business days in case of resubmissions,
then, for each of such calendar days in excess of such fifteen (15) business day
or five (5) business day period, the Port Authority shall grant the Lessee a
credit against its basic rental and additional basic rental obligations next
becoming due under this Agreement equal to the sum of:
(Q) for each of the first thirty (30) such excess
days, one hundred percent (100%) of the daily rate of basic rental per
rentable square foot and one hundred percent (100%) of the daily rate
of additional basic rental per rentable square foot (as such terms are
defined in subparagraph (1) of this paragraph (d)) multiplied by the
number of rentable
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square feet in the portion of the premises in which the Lessee is
performing, or proposes to perform, work pursuant to such Construction
Application;
(R) for each of the next thirty (30) such excess
days, one hundred fifty percent (150%) of the daily rate of basic
rental per rentable square foot and one hundred fifty percent (150%) of
the daily rate of additional basic rental per rentable square foot
multiplied by the number of rentable square feet in the portion of the
premises in which the Lessee is performing, or proposes to perform,
work pursuant to such Construction Application; and
(S) for each such excess calendar day thereafter, two
hundred percent (200%) of the daily rate of basic rental per rentable
square foot and two hundred percent (200%) of the daily rate of
additional basic rental per rentable square foot multiplied by the
number of rentable square feet in the portion of the premises in which
the Lessee is performing, or proposes to perform, work pursuant to such
Construction Application;
provided, that, in the case of any Construction Application for other than the
initial construction and installation work to be performed in the premises, such
sum shall be prorated by multiplying it by the Cost Factor for the work
described in that Construction Application. If one or more of the Lessee's
construction applications are selected by the Port Authority for complete
construction document review as provided in paragraph 7 of Form G-2 of Rider G,
such review shall be in addition to the review set forth above in this
subparagraph (2), the Lessee may commence its construction and installation work
as set forth above in this subparagraph (2) without regard to the performance of
such complete construction document review and there shall be no rental credit
if the Port Authority shall fail to deliver the findings of its complete
construction document review of such construction application(s) within the time
period set forth in paragraph 12 of Form G-1 of said Rider G, provided, however,
that nothing herein shall be construed to deprive the Lessee of a rental credit
as specifically provided above in this subparagraph (2) for the Port Authority's
failure to review plans relating to structural modifications or connections to
building systems within the time period provided above. All work to be performed
by the Lessee pursuant to this subparagraph (2) shall be in accordance with the
construction application and final plans and specifications submitted by the
Lessee and certified by its architect as complying with all applicable codes and
Port Authority technical standards as provided in Rider G and shall be subject
to inspection by the Port Authority during the progress of the work and after
the completion thereof. Upon substantial completion of the construction and
installation work to be performed by the Lessee pursuant to the construction
application and final plans and specifications forming a part thereof submitted
by the Lessee pursuant to the provisions of this subparagraph (2), the Lessee
shall deliver to the Port Authority a final certificate signed by an authorized
officer of the Lessee and a final certificate signed by the Lessee's licensed
architect or engineer who originally prepared and sealed the Lessee's plans and
specifications, each certifying that the construction and installation work
(other than "punch list" items not affecting health, safety, fire resistance or
life safety systems) has been substantially performed in accordance with the
construction application and the plans and specifications attached thereto and
any revisions or modifications thereto submitted by the Lessee or its licensed
architect or engineer and the provisions of this Section and in compliance with
all applicable governmental laws, ordinances, enactments, resolutions, rules,
regulations and orders, including all such governmental laws, ordinances,
enactments, resolutions, rules, regulations and orders that would be applicable
if the Port Authority were a private corporation as well as the Port Authority
technical/design standards referred to in said Schedule G, and that all life
safety items have been completed strictly in accordance with the same. Within
five (5) business days after receipt of such certificates, the Port Authority
shall (i) inspect the construction and installation work and (ii) if the
structural modifications performed by the Lessee in the premises and the
connections of facilities,
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equipment, lines, wires, pipes or ducts installed or modified by the Lessee to
the building systems providing services or utilities to the premises were
performed substantially in accordance with the Lessee's plans and specifications
and any Port Authority findings delivered to the Lessee, deliver to the Lessee a
consent to use and/or occupy the premises, and if such structural modifications
or connections to such building systems were not performed substantially in
accordance with such findings the Port Authority shall deliver to the Lessee a
statement setting forth in reasonable detail its reasons for not certifying the
construction and installation work as being finally completed. If the total
number of days actually required by the Port Authority for inspection of the
Lessee's construction and installation work in any portion of the premises
(including without limitation thereto any Additional Space added to the
premises) and delivery of such consent to use and/or occupy or delivery of such
statement of non-certification, as the case may be, should be in excess of five
(5) business days, then for each calendar day in excess of such five (5)
business day period the Port Authority shall grant the Lessee a credit against
its basic rental and additional basic rental obligations next becoming due under
this Agreement equal to the sum of:
(X) for each of the first thirty (30) such excess
days, one hundred percent (100%) of the daily rate of basic rental per
rentable square foot and one hundred percent (100%) of the daily rate
of additional basic rental per rentable square foot (as such terms are
defined in subparagraph (1) of this paragraph (d)) multiplied by the
number of rentable square feet in the portion of the premises in which
the Lessee has performed work pursuant to such Construction
Application;
(Y) for each of the next thirty (30) such excess
days, one hundred fifty percent (150%) of the daily rate of basic
rental per rentable square foot and one hundred fifty percent (150%) of
the daily rate of additional basic rental per rentable square foot
multiplied by the number of rentable square feet in the portion of the
premises in which the Lessee has performed work pursuant to such
Construction Application; and
(Z) for each such excess calendar day thereafter, two
hundred percent (200%) of the daily rate of basic rental per rentable
square foot and two hundred percent (200%) of the daily rate of
additional basic rental per rentable square foot multiplied by the
number of rentable square feet in the portion of the premises in which
the Lessee has performed work pursuant to such Construction
Application;
provided, that, in the case of any Construction Application for other than the
initial construction and installation work to be performed in the premises, such
sum shall be prorated by multiplying it by the Cost Factor for the work
described in that Construction Application. Subject to the provisions of the
Sections of this Agreement entitled "Casualty" and "Insurance" the Lessee
understands that if the Lessee elects to use the said Professional Certification
option the Port Authority's inspection of the premises will be limited in scope
and that, in any case, all risks thereafter with respect to all of the
construction and installation work and any liability therefor for negligence or
other reason shall be borne by the Lessee. The Lessee shall redo or replace at
its own expense (to the extent necessary to comply with same) any work not done
in accordance with all applicable governmental laws, ordinances, enactments,
resolutions, rules, regulations and orders, including all such governmental
laws, ordinances, enactments, resolutions, rules, regulations and orders that
would be applicable if the Port Authority were a private corporation or not done
substantially in accordance with the Port Authority technical/design standards
referred to in said Rider G, and all life safety work not done strictly in
accordance with the same. The Lessee hereby agrees that the granting of the
rental credits pursuant to the provisions of this subparagraph (2) shall be the
sole remedy available to the Lessee based upon the Port Authority's failure to
review and to comment upon the Lessee's
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resubmission of the construction application(s) pursuant to the Professional
Certification Option or to inspect the Lessee's construction and installation
work performed thereunder and deliver the consent or the statement in the time
periods provided for herein, provided, that this sentence shall not be deemed to
limit or affect the second sentence of paragraph (c). Notwithstanding anything
herein to the contrary, the Lessee shall not be entitled to any credit against
its rental obligations pursuant to this subparagraph (2) nor shall the Port
Authority be subject to any liability to the Lessee if the Port Authority fails
to review any submission or resubmission of the Lessee's plans and
specifications or fails to inspect or reinspect the work performed by the Lessee
within the time periods for review and inspection set forth herein unless each
such submission or resubmission of plans and specifications or the certificates
submitted by the Lessee and its qualified architect or professional engineer
certifying the substantial completion of the applicable work, as the case may
be, is accompanied by a conspicuous written statement (or thereafter such
conspicuous written statement is given but the time periods for such review and
inspection by the Port Authority shall not commence until such conspicuous
written statement is given to the Port Authority) on the front of such
submission from the Lessee setting forth (i) the number of days provided in this
Section for the review by the Port Authority of such submission or resubmission,
as the case may be, of the Lessee's plans and specifications or the time period
for inspection and (ii) the specific rent credits the Lessee will be entitled to
for the Port Authority's failure to so review or inspect within the applicable
time periods.
(e) Subject to the provisions of this Agreement entitled
"Casualty" and "Insurance", the Lessee hereby assumes the risk of loss or damage
to all of the construction and installation work performed by it prior to the
completion of such work and the risk of loss or damage to all property of the
Port Authority arising out of or in connection with the performance of the
construction and installation work, excepting only loss and damage which result
from willful misconduct or negligent acts or omissions done by the Port
Authority, its Commissioners, officers, employees, agents, representatives and
contractors with respect to the construction and installation work, provided,
that for the purposes of this sentence such work shall be deemed to have been
completed notwithstanding the fact that minor and insubstantial work not
violating the Standards remains to be performed. Subject to the provisions of
the Section of this Agreement entitled "Casualty" and "Insurance", in the event
of such loss or damage, the Lessee shall forthwith repair and replace the
construction and installation work and the property of the Port Authority
without cost or expense to the Port Authority. The Lessee shall itself and shall
also use its best efforts to require its contractors, and if required by the
construction application, its qualified architect or professional engineer, to
indemnify and hold harmless the Port Authority, its Commissioners, officers,
employees, agents, representatives and contractors from and against all claims
and demands, just or unjust, of third persons (including officers, employees,
agents, representatives and contractors of the Port Authority) to the extent
arising or alleged to arise out of the performance of the construction and
installation work and for all reasonable out-of-pocket expenses, including
without limitation thereto reasonable legal expenses incurred by it and by them
in the defense, settlement or satisfaction thereof, including without limitation
thereto, claims and demands for death, for bodily injury or for property damage,
whether they arise from the acts or omissions of the Lessee or of any
contractors of the Lessee, or agents or employees of the Lessee, excepting only
claims and demands which result from willful misconduct or negligent acts or
omissions done by the Port Authority, its Commissioners, officers, employees,
agents, representatives and contractors with respect to the construction and
installation work and except to the extent that such claims or demands are
covered by workers compensation insurance maintained by the Port Authority,
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. The
provisions of paragraph (b) of the Section of this Agreement entitled
-29-
"Indemnity" shall be applicable to the foregoing indemnity. The Lessee shall,
and shall use best efforts to 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 (3) preceding sentences. Nothing in this paragraph
(e) is intended, or shall be deemed to increase, decrease or otherwise alter the
obligations of the Lessee or the Port Authority in the event that the premises
or the World Trade Center are damaged by a casualty, which obligations shall be
as provided in the Sections of this Agreement entitled "Casualty" and
"Insurance", except that the Port Authority shall not be required to repair or
rebuild any alterations or improvements forming a part of the Lessee's
construction and installation work damaged or destroyed by such casualty unless
the Lessee's construction and installation work has been completed substantially
prior to the occurrence of such casualty, provided, that for the purposes of
this sentence such work shall be deemed to have been completed in its entirety
notwithstanding the fact that minor and insubstantial work not involving the
Standards remains to be performed. The Lessee shall not use or permit the use of
any portion of the premises in which the Lessee's initial construction and
installation work is being performed for any purpose whatsoever until it has
received the permit to occupy referred to in subparagraph (1) of paragraph (d)
of this Section or the consent to use and/or occupy referred to in subparagraph
(2) of said paragraph (d), as the case may be, with respect to such portion of
the premises and the Lessee shall not use or permit the use of such portion of
the premises even if such certificate or such consent is received with respect
to a portion of such initial construction and installation work if any such
certificate or consent states that such portion of the premises cannot be used
until other specified portions of the construction and installation work are
completed. In the event that the Lessee shall perform construction and
installation work in a portion of the premises (including any Additional Space,
as defined in the Section of this Agreement entitled "Additional Space", which
shall become a part of the premises) subsequent to its commencement of
operations in the premises, the Lessee may continue to use portions of the
premises not affected by such construction and installation work subject to the
Port Authority's approval, which approval shall not be arbitrarily and
capriciously withheld by the Port Authority and which approval shall not be
required for the Lessee to continue to use any portion of the premises, if any,
located on a floor other than the floor on which such work is being performed.
Upon completion of all of the construction and installation work in accordance
with the construction applications and the final plans and specifications
forming a part thereof finally approved by the Port Authority, the Lessee shall
supply the Port Authority with (1) one (1) set of reproducible Mylar "as built"
drawings together with a standard three and one-half inch (3-1/2") micro-floppy
disk carrying a copy of such "as built" drawings in Auto-CAD version 14 format,
in the case of the Lessee's initial construction and installation work in the
premises, or in the computer aided design (CAD) system format reasonably
requested by the Port Authority, in the case of any subsequent work or, (2) at
the option of the Lessee, with twenty (20) sets of "as built" drawings.
(f) The Lessee shall be solely responsible for the plans and
specifications used by it, 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 any construction and installation work performed by the
Lessee or on its behalf or the contracts for the performance thereof entered
into by the Lessee. The Lessee will use reasonable efforts to provide that 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.
(g) Subject to the provisions of paragraph (a) of this
Section, title to and property in all construction and installation work and to
all fixtures, equipment and systems installed pursuant
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to this Section (except for furniture, equipment, trade fixtures and other
personal property) 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
reasonably require.
(h) Without limiting or affecting any other term or provision
of this Agreement including, but not limited to, the provisions of paragraph (c)
of the Section of this Agreement entitled "Maintenance and Repair", the Lessee
shall be solely responsible for the design, adequacy and operation of all
utility, mechanical, electrical, communications and other systems installed by
the Lessee in the premises. Nothing set forth in this paragraph (h) is intended
nor shall it be deemed to alter the obligations of the Lessee and the Port
Authority in the event that the premises are damaged by a casualty, which
obligations shall be as provided in the Sections of this Agreement entitled
"Casualty" and "Insurance".
(i) Notwithstanding the provisions of paragraph (a) of this
Section, and without otherwise limiting the generality thereof, the Lessee shall
not be required to obtain the Port Authority's consent (and the Lessee shall not
be required to submit a Construction Application) to perform decorating work,
such as painting, wall papering and floor covering, including carpeting, (so
long as the materials used meet Port Authority standards therefor), to perform
minor installations of, or alterations in or to the Lessee's computer and
communications cabling or to install or replace the furniture and furnishings
located in the interior portions of the premises, provided, that, the Lessee
shall deliver to the Port Authority within fifteen (15) days' following the
completion of the work a full and detailed statement describing the work it
performed pursuant to this paragraph, setting forth a description of each item
of furnishings (including without limitation thereto any furniture whose
composition, construction or use may affect health, safety, fire resistance or
life safety systems and excluding that furniture whose composition, construction
or use does not affect health, safety, fire resistance or life safety systems),
and the specifications of all cabling, paint and wallpaper in such detail as may
permit the Port Authority to make a determination as to whether the requirements
hereinafter set forth in this paragraph have been met, and accompanied by a
written certification subscribed by an authorized officer of the Lessee (or a
licensed architect or engineer on behalf of the Lessee, the Lessee to be bound
by such certification with the same force and effect as if such certification
had been executed by the Lessee) that: (1) no part of the work which the Lessee
performed affected the structure of the building, or affected, modified or
attached to the automatic sprinkler system, fire alarm system or other life
safety systems forming a part of the building in which the premises is located;
(2) no part of the work which the Lessee performed affected, modified or
attached to any portion of any utility or other system located at the World
Trade Center; (3) all of the work which the Lessee performed is in conformance
with all applicable governmental laws, rules and regulations, including all
governmental laws rules, and regulations which would be applicable if the World
Trade Center were under private ownership, and with the requirements and
criteria set forth in the World Trade Center-Tenant Design-Guide in effect at
the time of the commencement of the work (copies of which shall be available at
the Lessee's request from time to time at the offices of the Port Authority);
and (4) the work which the Lessee performed is of such a nature that if the
World Trade Center were under private ownership no aspect of the work would
require filing of plans with or other approval by the Buildings Department of
the City of New York, provided, further, that Lessee's failure to deliver such
certification with respect to any work shall not constitute a default under this
Agreement unless Lessee fails to deliver the same within fifteen (15) days after
request by the Port Authority. In the event that upon inspection of the work the
Port Authority shall determine that the requirements set forth in this paragraph
have not been met, the Lessee shall promptly perform such acts as shall be
necessary to meet such requirements, including without limitation thereto
redoing or replacing the work performed, all at the Lessee's sole cost and
-31-
expense. In connection with review by the Port Authority of any work performed
by the Lessee pursuant to this paragraph the Lessee shall submit to the Port
Authority, at the Port Authority's request, such additional data, detail or
information as the Port Authority may reasonably determine to be necessary for
such review. Nothing contained herein shall affect the Lessee's obligation to
obtain the Port Authority's consent to the performance of any work other than as
to those items described in this first sentence of this paragraph (i).
(j) In the event the Lessee elects to perform any work other
than that described in the first sentence of paragraph (i) of this Section 12,
and the work which the Lessee proposes to perform involves only minor changes to
the non-structural interior portions of the premises, and the work which the
Lessee proposes to perform is of such a nature that if the World Trade Center
were under private ownership no aspect of the work would require filing of plans
with or other approval by the Buildings Department of the City of New York, the
Port Authority's written approval shall not be required prior to commencement of
such work by the Lessee and notwithstanding the provisions of paragraph (c) of
this Section, the Lessee need not submit a construction application covering
such work, provided, that no later than ten (10) days prior to the commencement
of the work (hereinafter in this paragraph (j) called the "Notice Period") the
Lessee shall deliver to the Port Authority the plans and specifications covering
the work it proposes to perform pursuant to this paragraph, or, in the absence
of such plans and specifications, a written description of the work, accompanied
by a written certification subscribed by an authorized officer of the Lessee or
the Lessee's licensed architect or engineer that: (1) no part of the work which
the Lessee proposes to perform affects the structure of the building, or
affects, modifies or attaches to the building's automatic sprinkler system, fire
alarm system or other building life safety systems; (2) no part of the work
which the Lessee proposes to perform affects, modifies or attaches to the point
of connection of the Lessee's utility or other systems to the Building's
systems; and (3) all of the work which the Lessee proposes to perform is in
conformance with the requirements and criteria set forth in the World Trade
Center-Tenant Design-Guide in effect at the time of the submission of the
Lessee's plans and specifications or written description, and, provided,
further, that such plans and specifications, or written description, are in such
detail as may permit the Port Authority to make a determination as to whether
the requirements set forth in this paragraph are met. In connection with the
review by the Port Authority of the Lessee's plans and specifications, or
description, covering the proposed work the Lessee shall submit to the Port
Authority, at the Port Authority's request, such additional data, detail or
information as the Port Authority may reasonably determine to be necessary for
such review. In the event the Port Authority at any time acting in a
non-arbitrary and non-capricious manner determines that the work the Lessee
proposes to perform, notwithstanding the provisions of this paragraph (j),
requires the prior written approval of the Port Authority, then and
notwithstanding the fact that the Port Authority did not respond to the Lessee
within the Notice Period with respect to the Lessee's plans and specifications
or written description, as the case may be, (i) if such work has not commenced
the Port Authority may direct the Lessee not to commence such work or (ii) if
such work has commenced, the Port Authority may direct the Lessee to cease
performance thereof until the Lessee in accordance with the provisions of
paragraph (c) of this Section, including the submission of a construction
application to the Port Authority, obtains the prior approval of the Port
Authority for such work (or until such dispute is resolved in the Lessee's
favor) and the Port Authority may direct the Lessee at its cost and expense to
redo and replace such work as has been so performed by the Lessee to the extent
such work is not in compliance with the Standards. In the event that the Port
Authority pursuant to the provisions of the preceding sentence acted arbitrarily
and capriciously in determining that the work the Lessee proposed to perform
required prior Port Authority approval and the Port Authority as a result of
such arbitrary and capricious determination directed the Lessee pursuant to the
preceding sentence either to not commence such proposed work or if such work had
commenced, directed the Lessee to cease
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performance thereof and/or to replace or redo any such work, then nothing herein
shall be construed to prevent the Lessee from exercising any rights or seeking
any remedies otherwise allowed to the Lessee at law or in equity but nothing
herein shall be deemed to create any rights or remedies in the Lessee that are
otherwise not allowed at law or in equity.
(k) The Port Authority, in connection with the Lessee's
performance of the initial construction and installation work in the premises
will pay to the Lessee an amount equal to the lesser of (1) the Lessee's cost
(as such term is defined in this Section) of such construction and installation
work performed in the premises or (2) the sum of Four Million Five Hundred Two
Thousand Three Hundred Thirty-five Dollars and No Cents ($4,502,335.00) (such
lesser amount being hereinafter referred to as the "Lessee's Finishing Work
Allowance"), provided, that prior to the Area A-1 Commencement Date the Lessee's
Finishing Work Allowance shall equal the lesser of the Lessee's cost of
performing the initial construction and installation work in Area A, or Two
Million Two Hundred Sixty-three Thousand Eight Hundred Forty Dollars and No
Cents ($2,263,840.00), or, in the event that the Area A-1 Commencement Date
shall occur prior to the Area A Commencement Date, then prior to the Area A
Commencement Date the Lessee's Finishing Work Allowance shall equal the lesser
of the Lessee's cost of performing the initial construction and installation
work in Area A-1, or Two Million Two Hundred Thirty-eight Thousand Four Hundred
Ninety-five Dollars and No Cents ($2,238,495.00). The Lessee's Finishing Work
Allowance will be paid to the Lessee as follows: On or about the 10th day of the
calendar month following the calendar month in which the Lessee's cost of
performing the initial construction and installation work in the premises
actually paid by the Lessee exceeds One Hundred Thousand Dollars and No Cents
($100,000.00) and on the 10th day of each calendar month thereafter during the
period of performance of such construction and installation work in which the
Lessee's cost of performing such construction and installation work not covered
by a certificate previously submitted by the Lessee exceeds One Hundred Thousand
Dollars and No Cents ($100,000.00), the Lessee shall deliver a certificate to
the Port Authority signed by a responsible officer of the Lessee which shall
certify as follows:
(V) the amount of all payments made by the Lessee
since the commencement of the initial construction and installation
work in the premises or since the delivery of the last such
certificate, as the case may be, which are properly includible in the
Lessee's cost of performing the initial construction and installation
work in the premises pursuant to the provisions of this Agreement, and
the Lessee's cost of the initial construction and installation work for
which such payments were made;
(W) the cumulative amount of all payments made by the
Lessee which are properly includible in the Lessee's cost of performing
the initial construction and installation work in the premises pursuant
to the provisions of this Agreement, from the commencement of such work
to the date of such certificate, and the Lessee's cost of the initial
construction and installation work, from the commencement of such work
to the date of such certificate;
(X) that the portion of the Lessee's initial
construction and installation work performed by the Lessee since the
last such certificate (or since the commencement of the initial
construction and installation work, in the case of the first such
certificate) and covered by such certificate has been performed in
accordance with the terms of this Agreement and the construction
application or applications covering that portion of the initial
construction and installation work; and
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(Y) that attached to such certificate are copies of
cancelled checks or other evidence of payment satisfactory to the Port
Authority for all amounts certified in such certificate as having been
by paid the Lessee since the last such certificate (or since the
commencement of the initial construction and installation work, in the
case of the first such certificate).
Within twenty (20) days after the delivery of each such officer's certificate by
the Lessee, the Port Authority shall pay to the Lessee the lesser of (1) the
amount certified by the Lessee in such certificate as paid, or (2) the amount
constituting the Lessee's cost of performing the initial construction and
installation work in the premises certified by the Lessee in such certificate as
performed in the period covered by such certificate, less ten percent (10%)
thereof, provided, that the total of such periodic payments made by the Port
Authority shall not exceed ninety (90%) of the Lessee's Finishing Work
Allowance, determined at the time of the making of each payment. Without in any
way limiting the effect of the proviso to the first sentence of this paragraph
(k), which limits the Lessee's Finishing Work Allowance in the event only one of
the Area A Commencement Date or the Area A-1 Commencement Date has occurred
prior to a payment of the Lessee's Finishing Work Allowance, once both such
Commencement Dates have occurred the entire Lessee's Finishing Work Allowance
may be used to reimburse the Lessee for payments of the Lessee's cost of the
initial construction and installation work performed in either Area of the
premises and in any proportion between such Areas as the Lessee in its sole
discretion elects, so long as such work is actually performed in the premises.
Upon completion of all of the initial construction and installation work in the
premises or an Area (in the event such work is completed in one Area prior to
its completion in the premises) in accordance with the construction application
or application covering such work and receipt by the Port Authority of the
certificates of the Lessee and the Lessee's qualified architect or professional
engineer described in subparagraph (1) of paragraph (d) of this Section, the
Lessee shall deliver to the Port Authority a full statement of the Lessee's cost
thereof, certified by a responsible officer 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 initial construction
and installation work as the Port Authority may reasonably require, the Port
Authority will finally determine the "Lessee's cost" of the construction and
installation work performed in the premises or such Area, as the case may be,
and the amount of the Lessee's Finishing Work Allowance (at the time of such
determination), and if such final determination discloses that the amounts
previously paid by the Port Authority pursuant to this paragraph (k) exceed the
Lessee's Finishing Work Allowance, at that time, the Lessee shall repay to the
Port Authority the amount of such excess within ten (10) business days of its
receipt of notice from the Port Authority setting forth the amount thereof; if
the final determination discloses that a part of Lessee's Finishing Work
Allowance (determined at that time) remains unpaid, including without limitation
thereto any portion of the ten percent (10%) deductions made in connection with
the prior periodic payments of such Lessee's Finishing Work Allowance, the Port
Authority will pay the same to the Lessee within thirty (30) business days after
the date of the said final determination and in the event that the sum of such
periodic payments and all other payments of the Lessee's Finishing Work
Allowance is less than Four Million Five Hundred Two Thousand Three Hundred
Thirty-five Dollars and No Cents ($4,502,335.00) (or, in the event that the
letting of Area A-1 has been cancelled pursuant to the provisions of paragraph
(b) of the Section of this Agreement entitled "Term", Two Million Two Hundred
Sixty-three Thousand Eight Hundred Forty Dollars and No Cents ($2,263,840.00),
or, in the event that the letting of Area A has been cancelled pursuant to the
provisions of said paragraph (b), Two Million Two Hundred Thirty-eight Thousand
Four Hundred Ninety-five Dollars and No Cents ($2,238,495.00)), then the excess
of such dollar amount over such sum shall be credited by the Port Authority
against the Lessee's rental obligations first becoming due. For the purposes of
this paragraph, and to the extent permitted by sound accounting practice the
"Lessee's cost" as used
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herein shall mean the sum of (i) direct labor and material costs, (ii) contract
costs (including without limitation thereto the fees of the Lessee's
construction manager and additional costs permitted under the general conditions
of such construction contracts) for the purchase and installation of fixtures,
equipment and other finishing and decorating work, including without limitation
thereto the cost of purchasing and installing computer and communications
cabling in the premises and (iii) the cost of engineering, architectural,
planning and design services performed in connection with the construction and
installation work provided that the total of such items shall not exceed twenty
percent (20%) of the total of the Lessee's cost. For all purposes of this
Section, the Lessee's cost of any construction and installation work shall
include not only the portion of the cost of such work payable over the course of
its performance but also any portion of such cost retained by the Lessee or the
Port Authority, as the case may be, and payable subsequent to the completion of
all such work. In no event whatsoever shall the "Lessee's cost", as defined and
computed in subdivisions (i), (ii) and (iii) above, include any expenses,
outlays or charges whatsoever by or for the account of the Lessee for or in
connection with any 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 include the cost of any equipment, fixtures or
improvements which is secured by liens, mortgages, other encumbrances or
conditional bills of sale. Without limiting the generality of the foregoing, it
is specifically understood that payments to employees of the Lessee,
administrative, financing or other overhead charges of the Lessee in connection
with the work, whether or not allocable to such work by the Lessee's accounting
practices, and payments made to persons, firms or corporations which own any of
the outstanding shares of the capital stock and voting rights of the Lessee or
any of whose outstanding shares of capital stock and voting rights are owned by
the Lessee or any persons, firms or corporations any of whose outstanding shares
of capital stock or voting rights are owned by the same persons, firms or
corporations which own any of the outstanding shares of the capital stock and
voting rights of the Lessee shall not constitute items of the "Lessee's cost"
hereunder. For a period of three (3) years following completion of the
construction and installation work, the Lessee shall maintain at the Lessee's
address first set forth in this Agreement and in accordance with sound
accounting practice books and records of account pertaining to the Lessee's cost
of the construction and installation work performed in the premises. The Lessee
shall permit the Port Authority by its agents, employees and representatives
during normal business hours upon reasonable notice to examine and audit and
copy the records and other documentation of the Lessee which pertain to and will
substantiate the Lessee's cost. In lieu of such examination, at the option of
the Port Authority and at its request, the Lessee shall deliver copies of such
records to the Port Authority, without cost to the Port Authority.
(l) In any instance in this Section 12 where the provisions
hereof require submission of certificates from an authorized officer of the
Lessee and the Lessee's licensed architect or engineer then the Lessee, in lieu
of its own certificate, may deliver to the Port authority the certificate of the
Lessee's licensed architect or engineer together with a statement signed by the
Lessee stating that the statement of the Lessee's licensed architect or engineer
is being delivered by such licensed architect or engineer as an authorized
representative of the Lessee as well as in the capacity of licensed architect or
engineer, and that the Lessee agrees to be bound by such certificate with the
same force and effect as if the certificate had been executed by the Lessee.
(m) As part of its initial construction and installation work
in the premises, the Lessee will perform such work as shall be necessary to put
the existing public restrooms located in the premises and shown in horizontal
hatching on Exhibit A and Exhibit A-1 attached hereto in compliance with the
applicable provisions and implementing regulations of the ADA (as hereinafter
defined) and to put all such restrooms in good working condition, including
without limitation thereto the replacement of all cracked tiles, the acid
washing of grout, the replacement all broken
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fixtures and all ceiling tiles, and the repainting of all partitions, all such
work being hereinafter referred to as the "Bathroom Work". Upon the completion
of the Bathroom Work in each Area and the receipt by the Port Authority of the
certificates of the Lessee and the Lessee's qualified architect or engineer
described in subparagraph (1) of paragraph (d) of this Section with respect to
the Area in which such bathroom is located, the Port Authority shall pay to the
Lessee an amount equal to the product obtained by multiplying Twenty-seven
Thousand Five Hundred Dollars and No Cents ($27,500.00) by the number of
bathrooms in that Area in which the Bathroom Work has been performed by the
Lessee. The payments made to the Lessee pursuant to this paragraph (m) shall be
in addition to the payments of the Lessee's Finishing Work Allowance described
in paragraph (k) of this Section and to the payments made pursuant to the
provisions of paragraph (n) of this Section and no part of the cost of
performing the Bathroom Work in any Area shall form a part of the Lessee's cost
of its initial construction and installation work in the premises.
(n) The Lessee will perform in each Area of the premises, as
part of its initial construction and installation work, the demolition work to
be performed by the Port Authority in any Additional Space as set forth in
subparagraphs (1), (4) and (5) of paragraph (b) of the Section of this Agreement
entitled "Port Authority Work", shall also remove the existing sprinkler loop
and all floor mounted electrical boxes ("doghouses" or "aftersets") as part of
its demolition work in each Area, and shall also install appropriate
soundproofing material around the elevator machine room in Area A-1 shown in
white on Exhibit A-1 attached to this Agreement, and the cost of all such work
shall form a part of the Lessee's cost of its initial construction and
installation work in the premises. The Port Authority and the Lessee hereby
acknowledge that their respective contractors will be performing work in the
premises at the same time pursuant to this paragraph (n) and to paragraph (b) of
the Section of this Agreement entitled "Port Authority Work" and each agrees to
use reasonable efforts to have their respective contractors cooperate with each
other in the performance of their respective work in order to prevent delays in
the performance of such work and the occupancy of each Area of the premises.
There shall be no charge for connecting or activating the sprinkler loop to be
installed by the Port Authority pursuant to said Section.
Section 13. Signs
(a) 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.
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
restore the area affected to the same condition as at the commencement of the
letting.
(b) The Lessee and its Permitted Occupants shall be entitled
in the aggregate (1) to the use of one (1) building standard line for each one
thousand (1,000) rentable square feet contained in the premises as set forth in
Schedule A (or Schedule A-1 as the case may be) attached hereto, such lines to
be located on the main building directory maintained in the lobby of the
Building, and (2) to the use of one (1) building standard line to be located on
the directory, if any, maintained in the sky lobby on the seventy-eighth (78th)
floor of the Building. The Port Authority will initially supply imprinted lines
for such purpose without charge. The Lessee shall pay the Port Authority for all
replacement imprinted lines at the Port Authority's standard rates for such
lines in effect from time to time. In the event the Port Authority installs a
computerized Building directory in the Lobby of the Building, it being
understood that the Port Authority shall have no obligation to
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do so, then the Lessee and its Permitted Occupants shall be entitled to listing
thereon without limitation and without cost but such listings shall be limited
to the employees, officers, directors, partners, members or other owners of the
Lessee and its Permitted Occupants located in the World Trade Center.
Section 14. Injury and Damage to Person or Property
Except as otherwise expressly provided in this Agreement and
subject to the provisions of the Section of this Agreement entitled "Casualty"
and "Insurance", the Port Authority shall not be liable to the Lessee or anyone
claiming through the Lessee for any bodily 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
except to the extent said damage, injury or death shall be due to the willful
misconduct or negligent acts or omissions of the Port Authority, its
Commissioners, officers, employees, agents, representatives and contractors or
the failure of the Port Authority to perform obligations expressly undertaken by
it as set forth in this Agreement. Notwithstanding the foregoing 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 (including, without limitation, any act or
negligent omission contrary to such obligation) after notice and the expiration
of any applicable cure period (provided that if no notice or grace period is
expressly set forth in this Agreement, thirty (30) days shall be deemed to be
the applicable notice and grace period except in case of emergency in which case
the Port Authority shall give such notice as is practicable) 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 ten (10) days'
notice, except in the case of an emergency, in which event the Port Authority
shall give such oral notice as may be practicable and the Lessee shall pay the
Port Authority's cost thereof within thirty (30) days after demand therefor,
provided, however, that if the Lessee has actually commenced to perform the
obligations set forth in the Port Authority's notice prior to the date the Port
Authority enters the premises to perform the same and diligently continues to
completion the performance of such obligation (subject to causes and conditions
beyond the control of the Port Authority), the Port Authority shall not perform
the same and, provided, further, however, that if the Lessee has diligently
commenced to perform whatever may be required to fulfill its obligation under
this Agreement and such obligation is not capable of being cured with diligent
performance within said thirty (30) day grace period then such thirty (30) day
period shall be extended until the Lessee has fulfilled such obligation provided
the Lessee diligently continues such performance until such fulfillment subject
to causes and conditions beyond its control. If the Port Authority has paid any
sum or sums or has incurred any obligations, expense or cost which the Lessee
has expressly 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 pursuant to this paragraph (a) by reason of
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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,
including reasonable legal expenses or costs 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 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) actual in-house costs incurred by the Port Authority;
(2) cost of materials, supplies and equipment used (including rental thereof);
(3) payments to contractors; and (4) any other reasonable out-of-pocket costs.
Section 16. Rights of Entry Reserved
(a) The Port Authority, by its officers, employees, agents,
representatives and contractors shall have the right during normal business
hours, and, except in case of an emergency (in which event the Port Authority
shall give such oral notice as is practicable), and upon reasonable written
notice (which if given to a management level employee may be given orally other
than entry to perform work) 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 thing which
the Port Authority may be obligated or have the right to do under this Agreement
or as a matter of law subject to the provisions of paragraph (b) below.
(b) Without limiting the generality of the foregoing, and
subject to the further provisions hereof, 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 reasonable times and upon reasonable written
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 it is not
practicable to use space in the building core or shaft to perform such work; 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 in connection with such repair, alteration, replacement,
construction or access or in connection with any other access, maintenance,
repair, alteration, replacement or construction the Port Authority may be
obligated to perform after the date the Lessee has completed its initial work in
the premises as set forth in the Section of this Agreement entitled "Certain
Obligations of the Port Authority", as set forth in the Section of this
Agreement entitled "Port Authority Work" or which may be expressly set forth
elsewhere in this Agreement, the Port Authority shall use reasonable efforts to
minimize interference to the extent practicable with the Lessee's use and
occupancy of the premises, including performance of such work other than during
normal business hours to the extent required under paragraph (l) of this
Section, and taking commercially reasonable steps to maintain a clean work site
and to minimize the area of the premises occupied by any such material brought
into the premises in connection with such repairs, alterations
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and replacements. Upon the completion of any work described in this paragraph
(b), the Port Authority will repair any damage to the premises caused by such
work and will restore the premises to substantially the condition existing prior
to the commencement of such work. Notwithstanding the provisions of paragraph
(g) of this Section and without otherwise limiting the generality thereof, in
the event that the rentable square footage of the premises shall be diminished
permanently by any new installation installed by the Port Authority pursuant to
this paragraph (b), rental shall be abated in accordance with the Section of
this Agreement entitled "Abatement of Rental", provided, that the Port Authority
shall use all commercially reasonable efforts to avoid diminishing the usable
area of the premises by more than an immaterial amount and in no event shall
diminish the area of the premises by more than one hundred (100) rentable square
feet.
(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 there is no other practicable means of access thereto)
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 (provided, that the Port Authority will
reimburse the Lessee for any reasonable out of pocket costs to remove and
replace such property), in order that access may be had to the system or part
thereof for its inspection, maintenance, repair or modification.
(d) Except as specifically provided elsewhere in this
Agreement, nothing in this Section shall or shall be construed to impose upon
the Port Authority any obligations to construct or maintain or to make repairs,
replacements, alterations or additions which the Port Authority has the right to
make, whether pursuant to this Section or otherwise, or shall create any
liability for any failure so to do. From and after the commencement date of the
letting of any Area hereunder and prior to the expiration or termination of the
letting under this Agreement or to any re-entry of the Port Authority (other
than pursuant to this Section) the Lessee is and shall be in exclusive control
and possession of such Area of the premises and, subject to the sections of this
Agreement entitled "Casualty" and "Insurance", the Port Authority shall not in
any event be liable to the Lessee or anyone claiming through the Lessee for any
injury or damage to any property or to any person happening on or in the
premises nor for any injury or damage to the premises nor to any property
located therein or thereon of the Lessee or of any other person claiming through
the Lessee (other than to the extent occasioned by the willful misconduct or
negligent acts or omissions of the Port Authority, its Commissioners, officers,
agents, employees, representatives and contractors). Without limiting the
generality of the foregoing or of any express provision of this Agreement,
nothing in this paragraph (d) or in this Agreement is intended to create any
third-party beneficiary of this Agreement or to create any obligation of the
Port Authority to the Lessee's officers, members, employees, agents,
representatives, contractors, customers, guests or invitees or to any other
person or organization not a party to this Agreement.
(e) At any time and from time to time during normal business
hours upon reasonable prior notice within the six (6) months next preceding the
expiration of the letting, as it may have been extended from time to time,
whether pursuant to this Agreement or otherwise, 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, at all reasonable
times during normal business hours and upon reasonable oral notice to a
management level employee, to enter thereon for the purpose of exhibiting and
viewing all parts of the same.
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(f) In exercising the rights set forth in this Section 16, the
Port Authority, its Commissioners, employees, agents or contractors shall at all
times conduct themselves in a manner consistent with customary practices in
first class office buildings.
(g) The exercise of any or all of the foregoing rights by the
Port Authority or others set forth in this Section in accordance with the
provisions thereof 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, except as expressly provided in this
Section or expressly provide elsewhere in this Agreement.
(h) The Lessee may designate certain areas of the premises
which require special security arrangements, and if, in the exercise of its
rights of entry set forth in this Section, the Port Authority requires entry to
any such designated area, other than in case of an emergency, the Port Authority
will only enter such designated area when accompanied by an authorized
representative of the Lessee, provided, the Lessee will designate such
authorized representative to the Port Authority on receipt of the Port
Authority's oral or other notice referred in this Section and shall make such
authorized representative available to the Port Authority at the time of entry
specified in the notice provided such time and notice are reasonable except in
case of emergency.
(i) Any work performed or installations made by the Port
Authority pursuant to this Section 16 shall be made with reasonable diligence in
a good and workmanlike manner in accordance with customary construction
practices in first class office buildings in the downtown area of Manhattan and
in compliance with the substantive requirements of the life safety provisions of
the New York City Building Code to the extent set forth in paragraph (a) of the
Section of this Agreement entitled "Certain Obligations of the Port Authority".
The Port Authority shall (i) promptly repair any damage to the premises or the
Lessee's property caused by such work or installations or by any of the parties
performing the same, (ii) take reasonable care during performance of the work to
safeguard the affected portion of the premises and the property of the Lessee;
and (iii) upon completion of such activity, restore the portion of the premises
that is the subject of such activity to substantially the condition existing
before such activity.
(j) Any pipes, ducts or conduits installed in or through the
premises pursuant to this Section 16 shall either be concealed behind, beneath
or within partitioning, columns, ceilings or floors located in the premises, or
completely furred at points immediately adjacent to partitioning columns or
ceilings located in the premises, provided that the installation of such pipes,
ducts or conduits, when completed, shall not adversely affect the appearance of
the premises or adversely affect the Lessee's installations or wiring. In no
event shall the Port Authority install any wet pipes over the Lessee's
computer/data processing or telephone equipment areas (meaning in the ceiling
under the slab of the floor over said computer/data processing or telephone
equipment areas) unless such location is the only practicable location therefor
and the Port Authority takes all necessary steps (in accordance with customary
construction practice) to protect such areas.
(k) Except in the event of an emergency or if necessary in
order to comply with any law, the Port Authority shall not enter the premises
unless a representative of the Lessee is present, which representative the
Lessee agrees to have present at the premises upon reasonable notice from the
Port Authority.
(l) The Port Authority shall use reasonable efforts to
minimize interference with the Lessee's access and use and occupancy of the
premises in making any repairs, alterations, additions or improvements;
provided, however, that the Port Authority shall have no obligation to
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employ contractors or labor at so-called overtime or other premium pay rates or
to incur any other overtime costs or expenses whatsoever, except that the Port
Authority, at its expense, shall employ contractors or labor at so-called
overtime or other premium pay rates if necessary to make any repair required to
be made by it hereunder to remedy any condition that either (i) results in a
denial of access to the premises, (ii) threatens the health or safety of
occupants of the premises, or (iii) unreasonably interferes with Lessee's
ability to conduct its business in the premises. In all other cases, at the
Lessee's request, the Port Authority shall employ contractors or labor at
so-called overtime or other premium pay rates and incur any other overtime costs
or expenses in making any repairs, alterations, additions or improvements,
provided the Lessee shall pay to the Port Authority, as additional rent, within
thirty (30) days after demand, an amount equal to the difference between (i) the
overtime or other premium pay rates, including all fringe benefits and other
elements of such pay rates, and (ii) the regular pay rates for such labor,
including all fringe benefits and other elements of such pay rates.
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, (i) except for a possible claim to an award
for moving expenses or for trade fixtures owned and installed by the Lessee or
for other improvements or personal property owned by the Lessee, and any other
separate claim which the Lessee may be entitled to make provided that such
claims are independent of and in addition to any claims of the Port Authority
and provided further that the Port Authority's award is not thereby reduced or
otherwise adversely affected, and (ii) except for a possible claim for the
unexpired term of the estate vested by this Agreement in the Lessee, 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. It is expressly understood that nothing in this
paragraph shall be deemed a recognition by the Port Authority of the validity of
the claims which the Lessee is entitled to make hereunder.
(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 agencies, cease and terminate 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 temporary or permanent 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 terminate, and the basic rental and additional basic rental thereafter
to be paid by the Lessee to the Port Authority shall be abated as provided in
Section 18 of this Agreement
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entitled "Abatement of Rental" from and after the date of such taking or
conveyance, provided, however, that the Lessee may elect to terminate this
Agreement if (1) the Lessee no longer has a reasonable means of access to the
remaining portion of the premises, or (2) the portion of the premises taken
constitutes more than twenty thousand (20,000) rentable square feet and a
responsible officer of the Lessee certifies that in the good faith judgment of
the Lessee, the Lessee cannot reasonably operate its business in the remaining
portion of the premises in substantially the same manner as such business was
operated prior to such taking. The Lessee shall give notice to the Port
Authority of any election to terminate this Agreement within forty-five (45)
days after such taking or conveyance, such termination to be effective on the
date specified in the Lessee's notice but not later than one hundred twenty
(120) days following the date of the Lessee's notice. Upon the date specified in
the Lessee's notice, the term of this Agreement shall terminate with the same
force and effect as if the effective date of termination were the original date
of expiration hereof. Any notice of termination given by the Lessee pursuant to
the provisions of this paragraph (c) shall not be effective if at the time of
the giving of such notice or on the intended effective date thereof the Lessee
is in default (after the giving of any required notice and the expiration of any
applicable cure period) in the payment to the Port Authority of any monetary
amount under this Agreement. If any basic rental or additional basic rental is
due to the Port Authority for any portion of the term prior to the effective
date of termination or if any basic rental or additional basic rental has been
paid by the Lessee for any portion of the term subsequent to the effective date
of termination, the same shall be payable by the Port Authority or by the Lessee
to the other, as the case may be, within twenty (20) days after demand therefor.
(d) In the event of a taking that does not result in the
termination of this Agreement, the Port Authority shall, at its sole cost and
expense and regardless of whether any award(s) shall be sufficient for the
purposes, proceed with due diligence, except for causes or conditions beyond its
control, to repair, alter and restore the portion of the building in which the
premises is located and the remaining part of the premises (including, without
limitation, all leasehold improvements), to the extent feasible, to their
condition immediately prior to the taking so as to constitute the remaining
portion of the building and the remaining part of the premises complete and
tenantable.
(e) As used in this Section 17, the terms "governmental or
other authorized agency or agencies" or "governmental authority" shall not be
deemed to include the Port Authority or any governmental entity (other than the
condemning entity) that has prior to such condemnation succeeded to the interest
of the Port Authority as landlord under this Agreement.
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 (or Schedule A-1 as the case may be) 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, or as to which the Lessee is unable to use and with respect to which is
entitled to an abatement as set forth in paragraph (c) of the Section of this
Agreement entitled "Force Majeure", 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
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case may require, of all partitions separating the space measured from adjoining
areas designated for the 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, for the conduct of its
business the Lessee agrees that notwithstanding that 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) Except as specifically set forth herein, 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. The term "Permitted
Occupant" shall mean any entity described in paragraphs (b) or (c) of this
Section 19 which has become a subtenant of whatever tier of all or a portion of
the premises or to which the Lease has been assigned pursuant to and in
accordance with all the terms and conditions of paragraphs (b) and (c)
respectively of this Section 19 and shall also include any desk space user who
meets the requirements of paragraph (b) of this Section 19.
(b) Notwithstanding the provisions of paragraph (a) of this
Section, 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:
(1) an individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company
or other business entity which controls the Lessee,
(2) a corporation, partnership, limited partnership, limited
liability partnership, limited liability company or other business
entity which is controlled by the Lessee, or
(3) a corporation, partnership, limited partnership, limited
liability partnership, limited liability company or other business
entity which is controlled by the same individual, corporation,
partnership, limited partnership, limited liability partnership,
limited liability company or other business entity which controls the
Lessee;
such assignment, subletting or desk space use to continue only as long as the
said person or corporation continues in one of the above described relationships
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
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no other purpose whatsoever, provided, however, that such assignment shall not
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 assignee and
such subleasing 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 subtenant. In the event that the Lessee shall notify the Port Authority
that it proposes to sublet or assign this Agreement to a proposed subtenant or
proposed assignee, as the case may be, meeting the requirements of subparagraph
(1), (2) or (3) of this paragraph (b) and the agreement of sublease or
assignment, as the case may be, between the Lessee and the proposed subtenant or
assignee shall comply with this Agreement, the Port Authority will prepare and
deliver to the Lessee an agreement in the form attached hereto as Exhibit X or
Exhibit Y, as the case may be, on or before the later of (i) the thirtieth
(30th) day (or the twentieth (20th) day if such assignment is in connection with
the purchase of all or substantially all of the Lessee's assets as permitted by
this paragraph (b)) following the later of the date of the delivery of the
Lessee's request to sublet or assign or the delivery to the Port Authority of
the Lessee's proposed sublease or assignment agreement, or (ii) the tenth (10th)
day following the delivery to the Port Authority of any additional information
reasonably requested by the Port Authority within such thirty (30) day period
with respect to the relationship between the Lessee and such proposed subtenant
or assignee as to the Lease, and upon delivery to the Port Authority of three
(3) copies of such agreement executed on behalf of the Lessee and the proposed
subtenant or assignee, the Port Authority will execute such agreement and
deliver two (2) copies thereof to the Lessee. Notwithstanding the provisions of
paragraph (a) of this Section, the Lessee shall have the right to assign this
Agreement to a business entity or corporation into which the Lessee is merged or
consolidated, if such assignment is requested by such business entity or
corporation in connection with such merger or consolidation, but the Port
Authority will not require an assignment of this Agreement to such business
entity or corporation, it being understood that, subject to the law of the
jurisdiction under which such business entity or corporation is organized and
without in any way limiting the applicability of the express provisions of this
Agreement, including without limitation thereto subparagraph (5) of paragraph
(a) of the Section of this Agreement entitled "Termination", such business
entity or corporation shall as a result of such merger or consolidation be the
Lessee under this Agreement with the same force and effect as if such business
entity or corporation had been the original signatory to this Agreement. The
Lessee shall also have the right to assign this Agreement to a person, business
entity or corporation which acquires all or substantially all of the assets of
the Lessee, provided the conditions set forth in said subparagraph (5) are met,
treating the Lessee prior to the sale as the acquired corporation and the
purchaser of all or substantially all of the Lessee's assets subsequent to such
sale as the resulting corporation. Neither such assignment shall be effective
until the Lessee, the proposed assignee and the Port Authority have executed an
agreement in the form attached hereto as Exhibit X, in the manner provided in
this paragraph (b). The Lessee may also permit the use of desk space in the
premises subject to all the terms and conditions of this Section by an
individual, corporation, partnership, limited partnership, limited liability
partnership, limited liability company or other business entity having an
ongoing nexus to the Lessee's business and such desk space use being in
conjunction with such business relationship; such use to continue only as long
as the said individual, corporation, partnership, limited partnership, limited
liability partnership or limited liability company continues in such business
relationship with the Lessee. The Lessee shall not be required to obtain the
consent of the Port Authority prior to permitting the use of desk space in the
premises as permitted by this paragraph (b) but upon request by the Port
Authority made no more than twice each year, the Lessee shall notify the Port
Authority of the name of each such desk space user, its relationship to the
Lessee and such information data and documents as would reasonably substantiate
the business relationship of the desk space user to the Lessee. The Lessee, and
the assignee, or the subtenant, as the case may be, shall furnish to the Port
Authority such information, data and
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documents as may be requested by the Port Authority from time to time but not
more than twice annually to substantiate the relationship between the Lessee and
such assignee or subtenant.
(c) Notwithstanding the provisions of paragraph (a) of this
Section, 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 than four
(4) subtenants on any floor in the premises at any one time pursuant to the
provisions of this paragraph (c)), 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, so long as the Statutes
remain in effect with respect to the Building, and in exercising its judgment
with respect to a proposed subtenant the Port Authority shall on the basis of
its functions, activities and services in world trade and commerce not apply
criteria which are different from or more stringent than those criteria which it
has applied or it is then applying with respect to other lessees of space in the
World Trade Center; (2) The Lessee, or any broker retained by the Lessee, shall
not publicly advertise the availability of the subleased space at a rental or
other consideration which is less than the then current rental (including
additional basic rental payable pursuant to the provisions of Schedule A or
Schedule A-1, as the case may be) for comparable space and for a comparable term
on the date of such subletting, but nothing in this clause shall be deemed to
prohibit the Lessee from subletting such space at less than such current rate;
(3) If the rental and any other 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 provided in this Agreement for the portion
of the premises proposed to be subleased, the Lessee shall so notify the Port
Authority and the Lessee shall pay fifty percent (50%) of such excess to the
Port Authority as received, subject to the prior deduction of the subleasing
expenses referred to in paragraph (e) of this Section; (4) Unless the Port
Authority does not have comparable space available for leasing for a comparable
term, the proposed subtenant has not been in active discussions with the Port
Authority toward the proposed subtenant's occupancy of space in the World Trade
Center in the ninety (90) day period preceding the Lessee's request to sublet
and is not a current occupant of the World Trade Center who has been in active
discussions with the Port Authority toward the proposed subtenant's current or
future occupancy of space in the World Trade Center in the ninety (90) day
period preceding the Lessee's request to sublet; 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
Y".
(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. Notwithstanding the provisions of Paragraph 5 of said Consent to
Sublease Agreement, of the Section of this Agreement entitled "Rights of User by
the Lessee" and of paragraph (g) of the Section of this Agreement entitled
"Responsibilities of the Lessee", a subtenant may carry on in the subleased
premises any use which is found to be eligible, suitable and qualified by the
Port Authority in accordance with the provisions of subparagraph (1) of
paragraph (c) of this Section, as evidenced by the execution of the Consent to
Sublease Agreement relating to the sublease between the Lessee and such
subtenant. The Lessee shall request the Port Authority's consent to any
subletting pursuant to paragraph (c) of this Section by notice setting forth the
name and address of the proposed subtenant, the use to which the proposed
subtenant will put the subleased premises and the amount and rate of payment of
all consideration to be paid by the proposed subtenant for or in connection with
its use or occupancy of the subleased premises, and the Lessee and subtenant
shall also 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 each subtenant
shall supply during the
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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 Lessee may prior to submitting the documents, information or other
data relating to subdivisions (2), (3) and (4) request a determination from the
Port Authority as to the proposed sublessee's eligibility, suitability and
qualifications as a World Trade Center Tenant in accordance with subdivision (1)
of paragraph (c) of this Section and the Port Authority agrees to advise the
Lessee of its determination within ten (10) business days after receipt of such
request from the Lessee and receipt by the Port Authority of all documents,
information and other data which the Port Authority may reasonably request in
connection with its determination as to the eligibility, suitability and
qualifications of the proposed subtenant as a tenant in the World Trade Center.
In the event that the Lessee and the proposed subtenant shall have complied with
or met all the requirements of subdivisions (2), (3) and (4) of paragraph (c) of
this Section, the proposed subtenant shall, in the opinion of the Port
Authority, have been found to be eligible, suitable and qualified as a World
Trade Center tenant in accordance with the provisions of subdivision (1) of
paragraph (c) of this Section, and the agreement of sublease between the Lessee
and the proposed subtenant shall comply with this Agreement, the Port Authority
will prepare and deliver to the Lessee a Consent to Sublease Agreement, in the
form of Exhibit Y annexed to this Agreement on or before the later of (i) the
thirtieth (30th) day following the later of the date of the delivery of the
Lessee's request to sublet or the delivery to the Port Authority of the Lessee's
proposed sublease agreement, or (ii) the tenth (10th) day following the delivery
to the Port Authority of any additional information reasonably requested by the
Port Authority within such thirty (30) day period, and upon delivery to the Port
Authority of three (3) copies of such Consent to Sublease Agreement executed on
behalf of the Lessee and the proposed subtenant, the Port Authority will execute
such Consent and deliver two (2) copies thereof to the Lessee.
(e) If, in connection with any subletting to a third party
pursuant to the provisions of paragraph (c) of this Section consented to by the
Port Authority as provided in this Section, the Lessee:
(1) has paid or incurred a brokerage commission at
the rates prevailing in the City of New York on the effective date of such
sublease to one or more real estate brokers licensed to do business in the State
of New York, or has paid a fee to a real estate broker licensed to do business
in the State of New York for professional consulting services solely in
connection with such subletting, the amount of such consulting fee not to exceed
rates in excess of rates prevailing in New York City on the effective date of
the sublease that would have been paid to a real estate broker as the procuring
agent in connection with such subletting, which brokerage commission or fee
payment is not reimbursed to the Lessee by the subtenant, is actually paid for
services rendered, is incurred solely in connection with such subletting and
would not have been required to have been paid except for such subletting,
provided, that if any such brokerage commission or fee paid by the Lessee is
based on rates in excess of the rates prevailing in the City of New York on the
effective date of such sublease, then only that portion of such brokerage
commission or fee which is not in excess of a commission based on such
prevailing rates shall be included in "subleasing expenses" as hereinafter
defined;
(2) has actually paid or incurred reasonable
advertising expenses for advertisements of the availability for sublease of such
subleased space,
(3) has incurred or paid any reasonable cost or
reasonable work allowance for finishing and decorating (including without
limitation thereto any reasonable costs for architectural and engineering fees,
demolition work or other construction and installation work) such
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sublet space solely to prepare the same for such subtenant which is not
reimbursed to the Lessee by the subtenant,
(4) has actually paid or incurred reasonable legal
fees and disbursements to one or more attorneys who are not employees of the
Lessee for representation of the Lessee in connection with such subletting;
(5) has granted to the subtenant a basic rental or
similar concession for or in connection with its use or occupancy of the
subleased space;
(6) has actually paid or incurred moving expenses
solely in connection with relocating such subtenant from its prior space;
(7) to the extent same is not included in subdivision
(3) above, the unamortized and unreimbursed (prior to the commencement of the
subletting, whether by part of the Lessee's Finishing Work Allowance or
otherwise) cost of any construction and installation work performed by or on
behalf of the Lessee in the sublet portion of the premises, including fixtures,
equipment and other property of the Lessee installed on the sublet portion of
the premises and available for use by such subtenant at the subleased premises
during the term of the sublease;
(8) has paid or incurred expenses in connection with
the takeover of a subtenant's other lease obligations less any amounts received
by the Lessee from the subtenant or other occupants of the subtenant's other
space net of subleasing expenses actually paid or incurred by the Lessee in
connection with subletting the subtenant's other space; and
(9) has paid or incurred any New York State transfer
tax gains (or any other transfer tax, if any, imposed by a governmental entity
but not an income, estate, gift or capital gains tax) in connection with the
subletting;
(the total of items (1), (2), (3), (4), (5), (6), (7), (8) and (9) being
hereinafter referred to as the "subleasing expenses"), then the total of such
subleasing expenses shall be applied as a credit against the excess, if any, of
the amount of the rental or other consideration actually paid by the subtenant
to the Lessee for each succeeding month during the term of the relevant sublease
over the rental rate payable by the Lessee to the Port Authority for the sublet
space for that month under the Lease until such allowable subleasing expenses
have been exhausted. Upon request by the Port Authority, the Lessee shall submit
to the Port Authority such documents and further supporting information as the
Port Authority may reasonably request (including but not limited to
certifications by a responsible officer of the Lessee setting forth the amounts
of the subleasing expenses actually paid by the Lessee and the person to whom
paid, and certifying that the Lessee has made such payments), provided, that if
the Port Authority shall have requested such documents and other information and
examination of such documents and other information by the Port Authority
discloses that any part of such subleasing expenses has not been credited
against such excess subleasing rental then fifty percent (50%) of such amount
will be credited against any such excess subleasing rental payable to the Port
Authority subsequent to such determination (provided, that in the event that at
the time of the expiration or termination of the letting under this Agreement,
any amount of such credit shall not have been so applied against such excess
subleasing rental and the Lessee's other obligations owing to the Port Authority
under this Agreement are less than the amount of such remaining credit, then the
Port Authority shall pay such remaining credit, less the amount of the Lessee's
other obligations under this Agreement, if any, to the Lessee within thirty (30)
days after demand therefor); but if such determination discloses that the
credits previously granted against such excess subleasing rental
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exceed the allowable subleasing expenses, the Lessee shall repay fifty percent
(50%) of such excess subleasing expenses to the Port Authority within thirty
(30) days after demand therefor.
(f) Use or occupancy of any portion of the premises by any
subtenant or desk space user, pursuant to the consent granted in this Section,
shall not entitle such subtenant or desk space user to any rights or privileges
which the Port Authority has or may hereafter accord to lessees of space in the
World Trade Center, including, without limitation thereto, listings on
directories, boards or in publications or similar privileges but nothing herein
shall be deemed to prohibit the Lessee from sharing with its permitted
subtenants or desk space users any such rights or privileges which the Port
Authority has accorded to the Lessee. The Lessee shall at all times be solely
responsible for complying with any laws which would apply if the World Trade
Center were privately owned regarding the permissible number of persons who may
use or occupy the premises. The Port Authority shall not impose requirements or
limitations on the use and occupancy of the premises by the Lessee's subtenants
or desk space users different or more stringent than those generally imposed by
the Port Authority throughout the World Trade Center.
(g) 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 and its Permitted Occupants, the
Port Authority may, upon Lessee's default (after the giving of any required
notice and the expiration of any subsequent period to cure such default
specifically provided for in this Agreement) 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 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.
(h) As used in this Section, "control" shall mean, with
respect to a corporation, partnership, limited partnership, limited liability
partnership, limited liability company, or other business entity (1) the
ownership, directly or indirectly by one corporation, partnership, limited
partnership, limited liability partnership, limited liability company or other
business entity of fifty-one percent (51%) or more of the issued and outstanding
shares of the capital stock or of the general partnership interest or membership
interest or other ownership interest of another corporation, partnership,
limited partnership, limited liability partnership, limited liability company or
other business entity; (2) the ownership, directly or indirectly by one
corporation, partnership, limited partnership, limited liability partnership,
limited liability company or other business entity of fifty percent (50%) or
more of the issued and outstanding shares of the capital stock or of the general
partnership interest or membership interest or other ownership interest of
another corporation, partnership, limited partnership, limited liability
partnership, limited liability company or other business entity together with
such first entity having the power, whether by agreement or otherwise, to direct
the management and policies of such other corporation, partnership, limited
partnership, limited liability partnership, limited liability company or other
business entity; (3) the power of one corporation, partnership, limited
partnership, limited liability partnership, limited liability company or other
business entity by agreement or pursuant to legal or regulatory order to direct
the management and policies of another corporation, partnership, limited
partnership, limited liability partnership, limited liability company or other
business entity; or (4) the holding, by the partners,
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officers, members, employees or other owners of one corporation, partnership,
limited partnership, limited liability partnership, limited liability company or
other business entity of a majority of the seats on the board of directors of
another corporation or limited liability company. The Lessee shall furnish to
the Port Authority on request a copy of any agreement or legal or regulatory
order referred to in subdivisions (2) and (3) of this paragraph (h) relating to
the power of one business entity to direct the management and policies of
another business entity either of which is proposed as a subtenant, assignee or
desk-space user pursuant to the provisions of paragraph (b) of this Section. As
used in this Section, the indirect ownership of a particular percentage of the
issued and outstanding shares of capital stock or partnership interest or
membership interest or other ownership interest of any business entity shall
mean that each of the business entities in the chain between the indirect owner
and the indirectly owned business entity shall own at least that percentage or
more of the issued and outstanding shares of capital stock or partnership
interest or membership interest or other ownership interest of the immediately
adjacent business entity in such chain.
(i) (1) In the event that the Lessee shall request the consent
of the Port Authority to an assignment of this Agreement and the
letting thereunder other than an assignment permitted by paragraph (b)
of this Section, the Port Authority shall not act arbitrarily and
capriciously in determining whether or not to consent to such
assignment, provided, that in the event that ownership of the building
in which the premises is located is transferred to private ownership as
distinguished from governmental or quasi-governmental ownership, then
the Port Authority shall not act unreasonably in determining whether or
not to consent to such assignment. In determining whether or not to
consent to any such assignment the Port Authority may consider such
facts and matters as it may deem relevant including without limitation
thereto: (i) whether the proposed assignee shall, in the opinion of the
Port Authority, be eligible, suitable and qualified as a World Trade
Center tenant; (ii) the consideration proposed to be paid by the Lessee
to the Port Authority in connection with such assignment; (iii) whether
the proposed assignee is a current occupant of the World Trade Center
or has been in discussion with the Port Authority toward its current or
future occupancy of space in the World Trade Center, and (iv) the
financial standing of the proposed assignee, and the security it is
willing to deposit to secure its performance under this Agreement. No
such assignment shall be effective unless the Lessee, the assignee and
the Port Authority have each executed the form of agreement entitled
"Assignment of Lease with Assumption and Consent" annexed to this
Agreement and marked "Exhibit Y".
(2) Execution of the Assignment of Lease with
Assumption and Consent referred to in subparagraph (1) of this
subparagraph (h) by the Port Authority and return thereof to the Lessee
shall constitute the determination to consent referred to in paragraph
(1) of this subparagraph (i). The Lessee and Assignee shall present in
advance all documents, information and other data which the Port
Authority may reasonably require relating to the matters covered in
said subparagraph (1).
(j) Subject to and in accordance with the provisions of this
paragraph (j), upon the request of the Lessee, the Port Authority shall enter
into an agreement (hereinafter called an "Attornment Agreement") in form
reasonably satisfactory to the Port Authority and any subtenant under a
sublease, to which the Port Authority has consented pursuant to the provisions
of paragraph (c) of this Section 19, covering a portion of the premises
constituting not less than one full floor of the Building, stating that, under
the terms set forth in such Attornment Agreement, the Port Authority shall not
disturb the possession of such subtenant of the space covered by the sublease in
the event the Port Authority elects to terminate the letting of the premises
under this Agreement pursuant to
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the Section thereof entitled "Termination", or otherwise by reason of the
Lessee's default after notice thereof to the Lessee and the expiration of any
applicable cure period, so long as such subtenant is not in default under such
sublease, beyond the giving of any required notice and the expiration of any
applicable cure period provided for therein, and is not in default under the
terms of such Attornment Agreement, beyond the giving of any required notice and
the expiration of any applicable cure period provided for therein, provided that
such subtenant shall attorn to and recognize the Port Authority, or its
designee, as landlord under such sublease and the Port Authority or its
successor in interest of the Building shall recognize such subtenant subject to
the provisions of this paragraph (j). Notwithstanding anything to the contrary
set forth in this subparagraph, any Attornment Agreement entered into by the
Port Authority pursuant to the provisions of this paragraph shall be
conditional, and shall provide that if this Agreement terminates as a result of
any reason other than the Lessee's default, such as by reason of the occurrence
of a casualty or condemnation, the provisions of the Attornment Agreement shall
be deemed null and void and of no force and effect, and the sublease covering
the space occupied by such subtenant shall automatically terminate on the
effective date of the termination of this Agreement without further act of the
parties. Pursuant to the terms of such Attornment Agreement, if, in the event
the letting of the premises under this Agreement is in fact terminated by the
Port Authority by reason of the Lessee's default after any required notice and
the expiration of any applicable cure period, such termination occurs prior to
the expiration or termination of such sublease, and possession of the premises
is in fact obtained by the Port Authority, then the Port Authority shall either
elect to:
(A) continue such sublease in effect as a direct
lease between the Port Authority, as lessor, and such subtenant, as
lessee, with the same force and effect as if the Port Authority, as
lessor, and such subtenant, as lessee, had entered into a lease
covering the subleased premises as of the effective termination date of
this Agreement, containing the same terms, covenants and conditions as
those contained in such sublease, provided, that the annual basic
rental and additional basic rental payable to the Port Authority by
such subtenant from and after the effective date of termination of this
Agreement shall be the greater of (i) the annual basic rental and
additional basic rental set forth in such sublease, or (ii) an annual
basic rental and additional basic rental computed at the same annual
per rentable square foot rate of annual basic rental and additional
basic rental which would have been payable by the Lessee with respect
to the subleased portion of the premises under this Agreement if this
Agreement had remained in full force and effect, or
(B) enter into a new lease with respect to the
premises with a new lessee (which new lease is hereinafter referred to
as the "New Lease" and which new lessee is hereinafter referred to as
the "New Lessee"), with such sublease continuing in effect as a
sublease between the New Lessee, as lessor, and such subtenant, as
lessee, with the same force and effect as if the New Lessee, as lessor,
and such subtenant, as lessee, had entered into a sublease covering the
subleased premises as of the termination date of this Agreement,
containing the same terms, covenants and conditions as those contained
in such sublease, provided, that the annual basic rental and additional
basic rental payable to the New Lessee by such subtenant from and after
the effective date of termination of this Agreement shall be the
greater of (i) the annual basic rental and additional basic rental set
forth in the sublease between the Lessee and such subtenant or (ii) an
annual basic rental and additional basic rental computed at the same
annual per rentable square foot rate of annual basic rental and
additional basic rental which would have been payable by the Lessee
with respect to the subleased portion of the premises under this
Agreement if this Agreement had remained in force and effect.
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From and after such subtenant's attornment to the Port Authority, or the New
Lessee, as the case may be, such subtenant shall pay to the Port Authority, or
the New Lessee, as the case may be, all rental payments and any and all other
payments then due or thereafter becoming due to the Port Authority or to the
lessor under and in accordance with such sublease, as the case may be, and shall
perform all the terms and covenants, and conditions of such sublease, as if the
Port Authority, or the New Lessee, as the case may be, were the lessor named
therein and except as provided below in this paragraph (j), the Port Authority
or the New Lessee, as the case may be, shall perform all of the terms, covenants
and conditions of such sublease to be performed by the lessor thereunder.
Notwithstanding the foregoing, the obligation of the Port Authority, or the New
Lessee, as the case may be, to recognize such subtenant's rights under such
sublease and such subtenant's obligation to attorn to the Port Authority, or the
New Lessee, as the case may be, are subject to the following terms and
conditions:
(1) the Port Authority, or the New Lessee, as the case may be,
shall not be liable for any act or omission of the Lessee or its
officers, directors, partners, members, contractors, agents, employees
or representatives under this Agreement or under such sublease
occurring prior to the effective date that such sublease becomes a
direct lease with the Port Authority or prior to the effective date of
the New Lease;
(2) the Port Authority, or the New Lessee, as the case may be,
shall not be subject to any credit, offsets, claims, counterclaims,
demands, or defenses which such subtenant may have against the Lessee,
its officers, directors, partners, members, contractors, agents,
employees or representatives;
(3) subject to subparagraph (5) below, the Port Authority, or
the New Lessee, as the case may be, shall not be bound by any payment
of rent which such subtenant might have paid for more than the current
month to the Lessee;
(4) the Port Authority, or the New Lessee, as the case may be,
shall not be bound or obligated to construct or complete construction
of all or any portion of the subleased premises or to undertake the
construction of any other improvements described in such sublease or in
this Agreement (except for maintenance, repair and restoration
obligations contained in such sublease to be performed after the
effective date of attornment);
(5) the Port Authority, or the New Lessee, as the case may be,
shall not be bound by any security deposit or any other pre-paid sum
that such subtenant has paid to the Lessee, unless the Port Authority,
or the New Lessee, as the case may be, has actually received such
deposit or sum from the Lessee;
(6) the Port Authority, or the New Lessee, as the case may be,
shall not be bound by any financing obligation the Lessee has incurred
with respect to such subtenant;
(7) the Port Authority, or the New Lessee, as the case may be,
shall not be bound by any obligation to make any tenant improvement
contribution owing at any time or to make any other payment or grant
any credit to such subtenant except those arising after the effective
date of attornment;
(8) the Port Authority, or the New Lessee, as the case may be,
shall not be bound by any agreement entered into by and between the
Lessee and such subtenant that amends such sublease without the prior
written consent of the Port Authority so as to
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increase any of the Lessee's obligations as set forth therein or as to
reduce any benefit accruing to the Lessee thereunder;
(9) the Port Authority, or the New Lessee, as the case may be,
shall have the same rights and remedies to insure the observance and
fulfillment and performance of all terms, covenants and conditions
contained in such sublease to be observed, fulfilled and performed by
such subtenant which the Lessee had or would have had if this Agreement
had not been terminated; and
(10) the Port Authority, or the New Lessee, as the case may
be, shall not be bound or obligated to recognize or to continue in
effect any option or other right of such subtenant to lease additional
space contained in such sublease unless within twenty (20) business
days after the effective date of termination of this Agreement such
subtenant exercises all options or rights to lease additional space
contained in such sublease in accordance with the terms (other than the
time period within which the subtenant is required to exercise such
option or right) of the sublease agreement.
Section 20. Termination
(a) If any one or more of the following events shall occur,
that is to say:
(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 and such assignment, petition, answer or consent shall not
have been cancelled, withdrawn, dismissed or discharged within ninety
(90) days after the filing thereof; 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,
and such order or decree is not dismissed, discharged or dissolved
within ninety (90) days after the entry thereof (unless such order or
decree cannot be practically dismissed, discharged or dissolved within
ninety (90) days after the entry thereof and the Lessee shall have
commenced an action to do so and continues diligently to prosecute such
action); 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,
discharged or dissolved within ninety (90) days after the filing
thereof (unless such petition cannot be practically dismissed,
discharged or dissolved within ninety (90) days after the entry thereof
and the Lessee shall have commenced an action to do so and continues
diligently to prosecute such action); or
(4) 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,
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any other person, firm or corporation in violation of the terms,
conditions and provisions of this Agreement, including without
limitation thereto the provisions of the Section of this Agreement
entitled "Assignment and Sublease", and such violation is not cured
within thirty (30) days after notice thereof from the Port Authority;
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 (i) the corporation resulting from
such merger or consolidation has either (A) a tangible net worth as of
the date of the merger or consolidation at least as good as the
tangible net worth of the Lessee immediately preceding the merger or
consolidation, or (B) a tangible net worth of not less than Sixty
Million Dollars and No Cents ($60,000,000.00), or both, in each case
determined in accordance with generally accepted accounting principles,
consistently applied, or (ii) the Lessee shall maintain a security
deposit in the amount and manner set forth in the Section of this
Agreement entitled "Security Deposit or Letter of Credit", such deposit
to be maintained at the time of such merger or consolidation and for
the period thereafter set forth in said Section; 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 except as
permitted under the Section of this Agreement entitled "Partnership
Provision"; 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 than the Lessee, and
any such possession or control shall continue in effect for a period of
ninety (90) 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) (Subparagraph (9) was intentionally omitted.)
(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)
business days after written notice from the Port Authority to the
Lessee stating that such amount is overdue and unpaid; or
(11) The Lessee shall have failed to comply with all the
requirements of paragraph (g) of the Section of this Agreement entitled
"Responsibilities of the Lessee" within a period of thirty (30) days
after notice from the Port Authority of such non-compliance (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 such fulfillment within thirty (30) days after receipt of
such notice from the Port Authority and
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continues diligently such performance without interruption except for
causes and conditions beyond its control; or
(12) 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 written 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 such notice from the Port Authority and continues
diligently such performance without interruption except for causes and
conditions beyond its control); or
(13) 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);
then upon the occurrence of any such event or at any time thereafter during the
continuance thereof, the Port Authority may by ten (10) business 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) 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 (after the giving of any required notice and the expiration of any
subsequent period to cure such default specifically provided for in this
Agreement) 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 unless such payments effect a cure
of the default prior to the giving of the Port Authority's termination notice.
(c) No waiver by either party of any default on the part of
the other party in performance of any of the terms, covenants or conditions
hereof to be performed, kept or observed by such other party shall be or be
construed to be a waiver of any other or subsequent default in performance of
any of the said terms, covenants and conditions.
(d) 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.
(e) Each party 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 or are otherwise compulsory counterclaims.
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Section 21. Existing Lease
(a) The Port Authority, and the Lessee have heretofore entered
into an agreement of lease, dated as of February 24, 1984, said agreement of
lease, as the same has heretofore been supplemented and amended, being referred
to herein as the "Existing Lease".
(b) Effective on the earlier of (1) the day subsequent to the
Area A-1 Commencement Date that the Lessee shall, upon not less than forty-five
(45) days' prior notice, vacate the entire premises under the Existing Lease
(such premises being hereinafter referred to as the "surrendered premises") and
deliver actual physical possession of the same to the Port Authority, in the
condition required by the Existing Lease upon surrender, as amended by the
proviso to the first sentence of paragraph (c) of this Section, or (2) the day
preceding the later of (i) the date that the Lessee shall commence in Area A any
of the operations permitted by the Section of this Agreement entitled "Rights of
User by the Lessee", (ii) the date that the Lessee shall commence in Area A-1
any of the operations permitted by said Section, or (iii) June 1, 2002, in the
event of the cancellation of the letting of Area A and Area A-1 together with
this Agreement pursuant to the provisions of paragraph (b) of the Section of
this Agreement entitled "Term" (said earlier day being hereinafter referred to
as the "Surrender Date"), the Lessee hereby surrenders and yields up and does by
these presents grant, bargain, sell, surrender and yield up to the Port
Authority, its successors and assigns, forever the surrendered premises and the
term of years with respect thereto under the Existing Lease yet to come, and has
given, granted and surrendered and by these presents does give, grant and
surrender to the Port Authority, its successors and assigns, all the rights,
rights of renewal, licenses, privileges and options of the Lessee granted by the
Existing Lease with respect to the surrendered premises, all to the intent and
purpose that the said term under the Existing Lease and the said rights of
renewal, licenses, privileges and options may be wholly merged, extinguished and
determined on the Surrender Date with the same force and effect as if the said
term were in and by the provisions of the Existing Lease originally fixed to
expire on such date.
(c) In consideration of the making of this Agreement by the
Port Authority, the Lessee hereby agrees to terminate its occupancy of the
surrendered premises and to deliver actual physical possession of the same to
the Port Authority on or before the Surrender Date, in the condition required by
the Existing Lease upon surrender, provided, that, notwithstanding anything to
the contrary contained in the Existing Lease, the Lessee shall not be required
to remove or change any of the construction and installation work performed, or
any improvements made, in the premises as defined in the Existing Lease, but the
Lessee may at its option remove items of construction and installation work it
has installed in the premises under the Existing Lease. The Lessee further
agrees that it will remove from the surrendered premises on or prior to the
fifth (5th) business day following the Surrender Date all furniture, equipment,
inventories, trade fixtures and other personal property of the Lessee or for
which the Lessee is responsible and all substantial debris, repairing any damage
to the premises caused by such removal or the removal by the Lessee of any
construction and installation work from the surrendered premises. In the event
that the Lessee removes electrical or plumbing fixtures from the surrendered
premises, whether as part of such removal or otherwise, the Lessee shall cap all
altered electrical and plumbing lines flush with walls, floors and ceilings.
(d) In the event that the Surrender Date shall not occur on or
prior to July 29, 1999, the term of the letting under the Existing Lease shall
hereby be extended through and including the Surrender Date, at an annual basic
rental rate of One Million Three Hundred Seventy-six Thousand One Hundred Twelve
Dollars and No Cents ($1,376,112.00), payable in equal monthly installments of
One Hundred Fourteen Thousand Six Hundred Seventy-six Dollars and No Cents
($114,676.00) commencing on July 30, 1999, and on the first day of each calendar
month thereafter,
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in the manner and subject to proration (in case the first or last month of such
extension period shall be a partial month) as set forth in the Existing Lease.
In addition to the foregoing basic rental, the Lessee shall pay additional basic
rental for the premises commencing on July 30, 1999, under the Existing Lease at
the rate set forth in Schedule A attached thereto, provided, that for the
purpose of calculating such additional basic rental the term "commencement date
of the letting" shall mean the commencement date of such extension period, the
term "basic wage rate" shall mean the wage rate in effect on January 1, 1999,
and the term "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, 1999.
(e) Prior to the Surrender Date, the Lessee shall have the
right, subject to the rights of the Port Authority and to the existing rights of
other tenants and occupants of the Building and, except as to such existing
rights, in common with other tenants and occupants of the Building, to utilize
the Building shaftways, including those contained in telephone and electrical
closets, without charge on a first-come, first-served basis in order to run a
reasonable number of ducts, risers, cables, wiring, conduits, piping and other
similar items from the surrendered premises to the premises under this Agreement
in connection with its combined use of the premises and the surrendered
premises, the exact location and diameter of such items to be designated by the
Lessee in its plans as part of a tenant alteration application which part shall
be subject to the approval of the Port Authority as set forth in the Section of
this Agreement entitled "Construction by the Lessee" even in the event that such
tenant alteration application is submitted under the Professional Certification
option set forth in said Section, provided, however, that the foregoing right
granted to the Lessee to utilize such Building shaftways shall not be deemed to
convey an interest to the Lessee in any particular shaftway and the Port
Authority retains the right to isolate particular Building shaftways or portions
thereof as shall be necessary in connection with the ownership, operation and
leasing of the Building and for the supply of services to other tenants and
occupants of the World Trade Center. The Lessee shall have the right to enter
the Building shaftways in which such ducts, risers, cables, wiring, conduits,
piping and other similar items are located or are to be located in accordance
with such approved plans, from time to time on not less than forty-eight (48)
hours' prior notice to the Port Authority except in the case of an emergency
when the Lessee shall give such notice as may be practicable, in order to
install, maintain, repair, replace and remove such items.
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 following the termination of this
Agreement pursuant to the Section of this Agreement entitled "Termination",
then, except as may be expressly provided to the contrary in this Agreement, 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 upon any re-entry,
regaining or resumption of possession following such termination there shall
become due and payable (and if unpaid shall be recoverable
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in the manner specified in paragraph (c) of this Agreement) by the Lessee to the
Port Authority, 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 sum of 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" (as it may have been extended from time
to time, whether pursuant to this Agreement or otherwise), and the then
present value of all the additional basic rental payable pursuant to
this Agreement for the balance of the term of the letting under this
Agreement, which future additional basic rental shall be deemed to be
payable at the annual rate in effect at the time of such termination,
cancellation, re-entry, regaining or resumption of possession, in each
case 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 obligations of
the Lessee, other than the basic rental and additional basic rental
referred to in subparagraph (1) of this paragraph (b), which have
accrued or matured prior to such termination, cancellation, re-entry,
regaining or resumption of possession or 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 but which by the terms of this Agreement accrue or mature
on the date of such termination, cancellation, re-entry, regaining or
resumption of possession; and
(3) an amount equal to the reasonable cost to and the expenses
of the Port Authority in connection with the termination, cancellation,
regaining possession and restoring and reletting the premises, the Port
Authority's reasonable legal expenses and cost including the actual
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 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 has relet the premises to an unrelated party or parties pursuant to an
arms-length transaction, the rental for the premises obtained through such
reletting shall be deemed prima facie 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 the Port Authority
be required to make any payment to the Lessee pursuant to the provisions of this
Section 22 nor shall the provisions of this Section 22 be construed to require
the Port Authority to grant the Lessee a credit against any of the Lessee's
obligations accruing on or prior to the effective date of termination.
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In determining present value of rental, an annual interest rate equivalent to
the last twelve (12) month average of the twenty-five (25) year bond Revenue
Bond Index as published each Friday in the "Bond Buyer" at the time the Port
Authority brings such action hereunder shall be used.
(d) Without in any way modifying anything set forth in this
Section, nothing in this Agreement is intended or shall be deemed to permit the
Port Authority to recover the same damages more than once; paragraph (b) of this
Section merely enumerates the damages made due and payable by paragraph (a) of
this Section and paragraph (c) sets forth the possible methods of recovering
such damages if they are not paid by or on behalf of the Lessee. In the event of
termination or cancellation of this Agreement pursuant to the provisions of the
Sections of this Agreement entitled "Termination" or the re-entry, regaining or
resumption of possession following such termination or cancellation only those
obligations expressly specified in this Agreement as surviving shall survive
and, except for those obligations of the Lessee to vacate the premises, and to
remove its property from the premises and to restore the premises, the Lessee
shall not have any obligation under this Agreement to perform specific actions
subsequent to such termination, cancellation, re-entry, regaining or resumption
of possession, but only to pay damages, provided, that nothing in this paragraph
shall, or shall be deemed to, relieve or release the Lessee of or from any
obligations accruing or maturing on or prior to the date of such termination,
cancellation, re-entry, regaining or resumption of possession.
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 following such termination or cancellation
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, in its reasonable discretion, 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 following such
termination or cancellation, have the right in its reasonable discretion 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 (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, or from the market value of the
occupancy of such portion of the premises as the Port Authority may during such
period actually use and occupy, all reasonable expenses, costs and disbursements
incurred or paid by the Port Authority in connection therewith (but only to the
extent such expenses, costs and disbursements have not been otherwise charged to
the Lessee). No such reletting or such use and occupancy shall be or be
construed to be an acceptance of a surrender. If any reletting of the premises
or any part thereof should be for a term which is longer than the remaining term
of this Agreement following the effective date of termination, then the expenses
of such reletting shall be amortized on a straight line basis over the
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term of such reletting and only the portion of such expenses attributable to the
remaining term of this Agreement will be included for purposes of this Section
23 and the Section of this Agreement entitled "Survival of the Obligations of
the Lessee".
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 pursuant to the provisions of this
Agreement or of law, 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
Unless specifically provided otherwise, 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 or the Lessee 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 described in paragraph (c) of the
Section of this Agreement entitled "Maintenance and Repair" with those items of
construction and installation work which the Lessee is required to remove as set
forth in paragraph (a) of the Section of this Agreement entitled "Construction
by the Lessee" so removed, provided, that in the event such cessation shall be
by termination said items of construction and installation work shall be removed
within thirty (30) days after such termination.
(b) 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 to the extent required
by the Section of this Agreement entitled "Construction by the Lessee". If the
Lessee shall fail to remove such property within thirty (30) days after the
termination or expiration of the letting, such property shall be deemed
abandoned and the Lessee shall reimburse the Port Authority within ten (10) days
of demand therefor for all of the Port Authority's reasonable out-of-pocket
expenses incurred or paid to remove such property from the World Trade Center
and otherwise dispose of same.
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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 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 and the Port Authority each represents and warrants
that it has not had any contacts, dealings, acts or conversations with any
broker in connection with the negotiation or execution of this Agreement or in
connection with the letting of the premises hereunder except Insignia/ESG, Inc.,
a Delaware corporation and successor by merger to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Company,
Incorporated, having an office and place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and that there is no broker with whom the Lessee
or the Port Authority, as the case may be, has dealt or had contacts or dealings
or conversations with who is or may be entitled to be paid a commission in
connection with this Agreement and the letting of the premises hereunder other
than Insignia/ESG, Inc. The Lessee shall indemnify and save harmless the Port
Authority from and against any 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 in connection with the letting of the premises hereunder arising
out of the contacts, dealings, acts or conversations of the Lessee except for a
claim of Insignia/ESG, Inc. if the said claim is made in accordance with the
terms of the agreement between the Port Authority and Insignia/ESG, Inc. dated
as of May 29, 1998. The Port Authority shall indemnify and save harmless the
Lessee from and against any 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 in connection with the letting of the premises hereunder arising
out of the contacts, dealings, acts or conversations of the Port Authority
including without limitation the claims of Insignia/ESG, Inc. if the claims are
made in accordance with the terms of the agreement between the Port Authority
and Insignia/ESG, Inc., dated as of May 29, 1998. The Port Authority agrees to
pay the commissions set forth in such brokerage agreement in accordance with the
terms thereof.
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 personally delivered or delivered by a nationally recognized
overnight courier service or sent by registered or certified mail, postage
prepaid and return receipt requested to the party or a duly designated officer
or representative of such party at the office of such party or a duly designated
officer or representative. The Lessee shall designate an officer or
representative whose regular place of business is at an office within the Port
of New York District, it being understood that until further notice such officer
or representative as of the date
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hereof is the representative named on the first page of this Agreement. Until
further notice, the Port Authority hereby designates its Executive Director as
its officer or representative upon whom notices and requests may be served. The
Port Authority, until further notice, designates its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and until further notice, the Lessee
designates its office at its address stated on the first page hereof, as their
respective offices where notices and requests may be served. Notices may be
given by the attorneys for either party.
(b) All notices shall be deemed to have been given or made on
the date actually received and in the event of failure to deliver by reason of
changed address of which no notice was given or refusal to accept delivery shall
be deemed given as of the date of such failure.
Section 30. Payments
(a) All payments required of the Lessee by this Agreement
shall be made to the Port Authority and mailed to The Port Authority of New York
and New Jersey, P. O. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or to such office or
address as may be substituted therefor, by written notice to the Lessee.
(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.
Section 31. Additional Provisions Relating to a Successor Owner
(a) In the event that title to the building of which the
premises are a part or a portion thereof (such building or portion thereof being
hereinafter referred to in this Section as the "private space") is transferred
(i) to private ownership (as distinguished from governmental or
quasi-governmental ownership) or (ii) to another governmental or
quasi-governmental entity, and as a result of such transfer the City Agreement
as defined in Schedule A shall no longer be in effect (any such transferee being
hereinafter referred to in this Section as the "Owner"), then from and after the
date real estate taxes and assessments first become payable by the Owner of the
private space the following shall apply:
(1) The annual basic rental thereafter payable by the Lessee
for the premises shall be increased by the amount of additional basic
rental under paragraph 2 of Schedule A of this Agreement payable by the
Lessee from and after the July 1 immediately preceding such transfer of
title to the private space; and
(2) Schedule A attached to this Agreement shall be deemed
deleted and Schedule A-1 attached to this Agreement shall be deemed
inserted in lieu thereof and the Lessee shall pay additional basic
rental in accordance with the provisions of Schedule A-1 attached to
this Agreement.
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(b) In the event that title to the building of which the
premises are a part or a portion thereof is transferred to private ownership (as
distinguished from governmental or quasi-governmental ownership), then, in
addition to the obligations of the Owner, as successor to the Port Authority,
under this Agreement, the following shall apply:
(1) All references to "non-arbitrary and non-capricious" or
"arbitrary and capricious" or similar words appearing in Section 12 or
elsewhere in this Agreement shall be deemed changed to "reasonable" or
"non-reasonable" or similar words, as the case may be. Without limiting
the foregoing and in addition thereto the Owner will not unreasonably
withhold or delay its consent required pursuant to the Section of this
Agreement entitled "Construction by the Lessee" to any contractor or
subcontractor or any construction, improvement, alteration,
modification, addition, repair or replacement work proposed to be done
by the Lessee so long as the Lessee's plans and specifications therefor
conform to the requirements of the New York City Building Code and so
long as such work shall not (i) unreasonably interfere with the
operation of the World Trade Center, (ii) materially and adversely
affect the exterior walls or exterior appearance of the building in
which the premises are located, (iii) materially and adversely affect
the slab, structural steel members or core walls of such building, or
(iv) affect the proper functioning of the mechanical, plumbing,
electrical and heating, ventilating and air-cooling systems of such
building. Any dispute between the Owner and the Lessee arising out of
this subparagraph (1) as to whether the Owner unreasonably withheld or
unreasonably delayed its consent shall be resolved by arbitration in
accordance with the then existing rules of the American Arbitration
Association (expedited procedures).
(2) The Owner, in addition to performing the obligations
expressly undertaken by the Port Authority pursuant to the provisions
of this Agreement, will maintain and repair the building in which the
premises are located in compliance with all applicable laws,
ordinances, enactments, resolutions, rules, regulations, requirements,
orders and directions including, without limitation thereto, the New
York City Building Code.
(3) Wherever in the Section of this Agreement entitled
"Assignment and Subleasing" the consent of the landlord is required in
connection with any assignment or subletting referred to therein, the
Owner will not unreasonably withhold or delay such consent. Any dispute
between the Owner and the Lessee arising out of this subparagraph (3)
as to whether the Owner unreasonably withheld or unreasonably delayed
its consent shall be resolved by arbitration in accordance with the
then existing rules of the American Arbitration Association (expedited
procedures).
(4) The Owner, upon written request from the Lessee, shall
join in any applications for any permits, approvals or certificates
required to be obtained by the Lessee in connection with any
construction or installation work the Lessee is permitted to perform in
the premises (provided, that the provisions of the applicable legal
requirement shall require that the owner joins in such application) and
shall otherwise cooperate with Lessee in connection therewith,
provided, that the owner shall not be obligated to incur any
out-of-pocket cost or expense including, without limitation, attorney's
fees and disbursements unless Lessee shall pay such reasonable cost or
expense.
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Section 32. Quiet Enjoyment
The Lessee 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, it
being understood and agreed that the Port Authority's liability hereunder shall
continue in effect only for the period that it remains the owner of the Building
provided, the landlord directly succeeding the Port Authority shall assume such
liability. The provisions of this Section 32 shall not be deemed to modify the
rights expressly granted to the Port Authority to terminate this Agreement
and/or exercise any other remedies which it may have in the event of a default
by the Lessee in its obligations hereunder after the giving by the Port
Authority of any required notice and the expiration of any applicable cure
period.
Section 33. Non-Liability of Individuals
Neither the Commissioners of the Port Authority nor the
directors of the Lessee nor any of them, nor any officer, agent or employee
thereof, shall be charged personally by any party hereto with any liability or
held liable to them 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.
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(f) This Agreement shall be governed by, and interpreted and
applied in accordance with, the laws of the State of New York, excluding the
conflict of laws rules and provisions thereof.
Section 36. Definitions
The following terms, when used in this Agreement, shall have
the respective meanings given below:
(a) "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 ▇▇▇▇▇▇ River on the west, and on the
north by a line beginning at the point of intersection of the ▇▇▇▇▇▇ River and
the north side of ▇▇▇▇▇ Street extended, running along the north side of ▇▇▇▇▇
Street extended and the north side of ▇▇▇▇▇ Street to the west side of
Washington Street, then along the west side of Washington Street to the north
side of ▇▇▇▇▇▇▇ Street, then along the north side of ▇▇▇▇▇▇▇ Street to the east
side of West Broadway, then along the east side of West Broadway to the north
side of ▇▇▇▇▇ Street, then along the north side of ▇▇▇▇▇ Street to the east side
of Church Street, together with such additional contiguous area, maintained by
the Port Authority on February 1, 1997, as may be agreed upon from time to time
between the Port Authority and the said City of New York.
(b) 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.
(c) "Causes or conditions beyond the control" of the Port
Authority or the Lessee, shall mean and include acts of God, the elements,
weather conditions, tides, earthquakes, settlements, fire, acts of governmental
authority (other than the Port Authority so long as the Port Authority owns the
Building or any successor owner thereof which is a governmental or
quasi-governmental entity), war, shortage of labor or materials, acts of third
parties (who are not employees of the Port Authority or the Lessee) for which
the Port Authority or the Lessee is not responsible, injunctions, strikes,
boycotts, picketing, slowdowns, work stoppages, labor troubles or disputes of
every kind (including all those affecting the Port Authority or the Lessee, 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 the Lessee or which could not be prevented or remedied by
reasonable effort and at reasonable expense.
(d) "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.
(e) "Building" shall mean the building in which the premises
are located.
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Section 37. Insurance
(a) The Lessee shall not knowingly do or knowingly permit its
officers, members, employees, agents, representatives, contractors, customers,
guests and invitees to do any act or thing upon the premises, and shall not do
any act or thing at the World Trade Center, which will invalidate or conflict
with the standard insurance policies customarily maintained by landlords owning
comparable first-class buildings in the Borough of Manhattan south of ▇▇▇▇
▇▇▇▇▇▇ at that time, including without limitation thereto the New York Standard
Form of Fire Insurance Policy and the New York Standard Form of Extended
Coverage Endorsement, or which, in the reasonable opinion of the Port Authority,
constitutes 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", provided, that the Port Authority will
not enforce this provision in a discriminatory manner against the Lessee and the
Lessee shall timely 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 pertain or apply to the operations of the
Lessee in the premises and of which the Lessee is aware or has notice and the
Lessee shall, subject to and in accordance with 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 are required at any
time hereafter by any such present or future rule, regulation, requirement,
order or direction provided that the Lessee shall not be required to make such
improvements, alterations or repairs unless the requirement results from the
particular manner of use or operations of the Lessee in the premises as opposed
to general office use. In the event that the Lessee shall fail to comply with
the provisions of the preceding sentence, any notice of default delivered by the
Port Authority pursuant to the provisions of subparagraph (12) of paragraph (a)
of the Section of this Agreement entitled "Termination" with respect to such
failure shall specify the act or thing done, extra-hazardous condition existing,
or regulatory organization rule, regulation, requirement, order or direction
violated in connection with such failure. 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, within thirty (30) days of demand
therefor accompanied by a statement from the insurance carrier, if obtainable
and if not obtainable then from the Port Authority, identifying the specific use
or activity causing such increase, and a statement from the Port Authority
identifying the provisions of this Agreement breached by the Lessee, 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 failure by the Lessee,
but no such payment shall relieve the Lessee of its other obligations under this
paragraph.
(b) (i) Subject to the provisions of the last sentence of this
subparagraph (i), the Lessee in its own name as insured 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 commercial general liability
insurance including a contractual liability endorsement for such coverage as may
reasonably be required 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 Two Million Dollars and No Cents ($2,000,000.00) 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 eighty percent
(80%) full replacement value of 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 One Hundred Thousand Dollars
and No Cents ($100,000.00) against loss or damage by fire and theft and
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such other risks or hazards as are insurable under present or future forms of
"All Risk" insurance policies. The Port Authority will not require the Lessee to
maintain amounts of liability insurance coverage in excess of the amounts of
such coverage which landlords owning comparable first-class buildings in the
Borough of Manhattan south of ▇▇▇▇ ▇▇▇▇▇▇ at that time customarily require to be
maintained by tenants conducting similar operations to those conducted by the
Lessee in the premises.
(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 primary or umbrella policies (or both) or 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 prior to the date
of this Agreement. In the event any binder is delivered, it shall be replaced
within thirty (30) days by a certified copy of the policy or a certificate
including said endorsements and such waiver of subrogation. In the event that at
any time during the term of the letting under this Agreement a notice of claim
shall be filed or an action or proceeding commenced against the Port Authority
which is required to be covered by insurance pursuant to the provisions of this
Agreement or in the event that an action or proceeding at law or in equity or a
dispute shall arise, whether between the Port Authority and the Lessee or
between the Port Authority and a third party or which otherwise involves the
Port Authority, which may relate to a matter covered by any such policy, then in
either such event the Lessee shall deliver a certified copy of any policy
covering the premises, which provides coverage against such claim, action or
proceeding or which relates to such dispute, to the Port Authority within thirty
(30) days after request of the Port Authority. Each such copy or certificate
shall contain endorsements that (a) the policy may not be cancelled, terminated,
adversely changed or adversely modified without giving 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) the Lessee shall be solely responsible for
the payment of premiums therefor notwithstanding that the Port Authority is
named as an additional insured. A renewal policy or certificate or binder 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 Expiration Date. 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 Port Authority shall notify the Lessee to that effect in writing
and 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-X" 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 commercial general liability policies which
landlords owning comparable first-class office buildings in the Borough of
Manhattan
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south of ▇▇▇▇ ▇▇▇▇▇▇ 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 and any Permitted
Occupants 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 elect to pay the carrier's additional charge therefor it being
understood that failure of a party to so elect to pay the carrier's additional
charge shall not be deemed an event of default under this Agreement; provided
that if such waiver, agreement or permission would have been obtainable from an
insurance carrier by payment of an additional charge (and in the case of the
Port Authority it is customary for First Class Owners to pay an additional
charge therefor or in the case of the Lessee it is customary for tenants in
first class office buildings in downtown Manhattan containing no less than one
million (1,000,000) rentable square feet to pay an additional charge therefor)
then such self-insuring party shall notify the other party of the amount of such
additional charge and the release by such party described in paragraph (d) below
shall only be effective if the other party shall pay such additional charge, it
being understood that failure of a party to so elect to pay the carrier's
additional charge shall not be deemed an event of default under this Agreement.
(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 or lost rental) 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 policies containing a waiver of
subrogation or permission to release liability as provided in paragraph (c)
above or self-insured.
(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 or shall self-insure as permitted by
paragraph (g) of 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" and the carrying of
insurance, if any, by the Port Authority shall not modify, reduce, limit or
impair the Port Authority's obligations and liability under paragraph (c) of the
Section of this Agreement entitled "Certain Obligations of the Port Authority".
(f) The Port Authority hereby represents that 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
World Trade Center, and permitting the release described in paragraphs (c) and
(d) of this Section. The Port Authority does not represent or warrant that it
will
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continue to maintain such insurance. In the event that the Port Authority elects
to act as self-insurer with respect to any loss caused by damage to the premises
or the World Trade Center resulting from risks that are or would have been
covered under the New York Standard Form of Fire Insurance Policy including the
standard form of Extended Coverage Endorsement (the term "self insurer" meaning
that the Port Authority either (i) purchases no insurance covering such loss;
(ii) purchases insurance with a deductible provision applicable to such loss; or
(iii) insures for less than the full replacement value of such loss to the World
Trade Center), then solely with respect to the self-insured portion of such loss
for which the Port Authority does not actually receive the proceeds of
insurance, the Lessee's obligation to the Port Authority pursuant to the
provisions of paragraph (b) of the Section of this Agreement entitled
"Maintenance and Repair" with respect to any single occurrence of damage
resulting from such risks, both to the premises and the World Trade Center,
shall be limited to One Hundred Thousand Dollars and No Cents ($100,000.00)
hereinafter referred to as the "Threshold Amount") so long as the waiver or
release described in paragraphs (c) and (d) of this Section shall remain
available on commercially reasonable terms to owners of comparable first-class
buildings in the Borough of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇. Nothing herein shall
or shall be deemed to limit the Lessee's liability pursuant to paragraph (b) of
the Section of this Agreement entitled "Maintenance and Repair" for the portion
of such loss which does not exceed the Threshold Amount and with respect to the
portion of such loss which does not exceed the Threshold Amount the provisions
of paragraph (b) of the Section of this Agreement entitled "Maintenance and
Repair" shall control, and nothing contained in this paragraph shall or shall be
deemed to limit or affect the Lessee's liability with respect to damage not
insurable under the New York Standard Form of Fire Insurance Policy and the New
York Standard Form of Extended Coverage Endorsement.
Section 38. Late Charges
(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, percentage or other rental or any payment of utility or other
charges or if any such amount is found to be due as the result of an audit,
then, in such event, the Port Authority may impose (by statement, ▇▇▇▇ or other
writing delivered to the Lessee) 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 (.8%) of such unpaid amount for each
late charge period. There shall be twenty-four (24) 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 (15) (but not less than thirteen (13))
calendar days. Without limiting the generality of the foregoing, late charge
periods in the case of amounts found to have been owing to the Port Authority as
the result of Port Authority audit findings shall consist of each late charge
period following the date the unpaid amount should have been paid 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 or if a payment is not
due until the delivery of a statement, notice or ▇▇▇▇, such payment shall not be
deemed due to the Port Authority for purposes of this Section until fifteen (15)
days after the date on which the Port Authority gives notice to the Lessee of
the amount of such payment. No periodic payment of basic rental or additional
basic rental shall be deemed to be a payment the amount of which cannot be known
until the delivery of a ▇▇▇▇, notice or statement. 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 become
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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. 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. In the event that a late charge or charges is
imposed on an unpaid amount which is later finally determined by written
agreement of the parties or by a court of competent jurisdiction not to have
been due and payable by the Lessee, the Port Authority shall refund the amount
of such late charge or charges to the Lessee at the time of the refund of such
unpaid amount.
(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 shall 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), after notice to the Port Authority
of the amount to be withheld and the reason for such withholding, no late charge
shall be imposed on any such withheld amount pursuant to the provisions of
paragraph (a) of this Section for a period of thirty (30) days following such
notice 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 shall permit or be deemed to permit the Lessee to dispute and
withhold any payment of basic rental, additional basic rental, or other periodic
payment, or any portion thereof, or all or part of any other charge or amount if
such amount, or the rate necessary to calculate such amount, is specified in
this Agreement or is otherwise known to the Lessee, except by reason of offset
or abatement expressly provided for 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 Lessee shall pay a late charge on
such amount calculated in accordance with the provisions of paragraph (a) of
this Section from the date such amount was originally due to the Port Authority
to the date such amount is paid to the Port Authority. If the Lessee shall pay
to the Port Authority such disputed amount "under protest" then the Lessee shall
promptly serve a Notice of Claim on the Port Authority and shall diligently
commence and prosecute a legal action with respect to the disputed amount to
resolution. Upon resolution of such dispute the Port Authority shall pay to the
Lessee an amount calculated in accordance with the provisions of paragraph (a)
hereof on any part of the disputed amount paid "under protest" that was not due
to the Port Authority from the date such part of the disputed amount was paid to
the Port Authority "under protest" to the date the same was repaid to the
Lessee. Nothing contained in this paragraph shall, or shall be deemed to, affect
the Port Authority's right to terminate this Agreement and the letting hereunder
in accordance with the terms of this Agreement, or exercise any other remedy
available to it under this Agreement, or otherwise, whether in law or in equity,
consequent upon the Lessee's failure to pay any amount in dispute as herein
provided, except that the Port Authority agrees not to exercise such remedies
during the thirty (30) day period after the Lessee notifies the Port Authority
of the reason for the dispute, so long as the Lessee is making a good faith
effort to resolve such dispute during such thirty (30) day period.
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Section 39. Force Majeure
(a) Neither the Port Authority nor the Lessee shall be liable
for any failure, delay or interruption in performing its obligations hereunder
due to causes or conditions beyond its control, provided, however, that this
provision shall not apply to the Lessee's obligations to pay the rentals
specified in this Agreement, or its obligation to pay any other fees, charges or
money payments due to the Port Authority hereunder, or to the Port Authority's
obligation to grant any abatement or a credit against rentals hereunder to pay
any portion of the Lessee's Finishing Allowance, if any, or Reimbursement
Amount, if any, or to pay any other fees, charges or money payments, if any, due
to the Lessee under this Agreement.
(b) Except as expressly set forth in paragraph (c) of this
Section and in the Sections of this Agreement entitled "Casualty",
"Condemnation" and "Governmental Compliance", or expressly provided elsewhere in
this Agreement, 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 (other than the Port Authority or
any other governmental entity succeeding to the Port Authority's interest)
whatsoever, or by priorities, rationing or curtailment of labor or materials
(not caused by the actions of the Port Authority or any governmental entity
succeeding to the Port Authority's interest), 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 as a result of 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" (whether or not excused by paragraphs (a) or (b) above of this
Section, paragraph (h) of the Section of this Agreement entitled "Services and
Utilities" or other provisions hereof), or as a result of any removal and
replacement of any Hazardous Materials or any asbestos or asbestos-containing
material by the Port Authority, whether pursuant to the Section of this
Agreement entitled "Port Authority Work" or pursuant to the Section of this
Agreement entitled "Rights of Entry Reserved", or as a result of any work,
repairs or installation performed by the Port Authority or failure by the Port
Authority to perform obligations expressly undertaken by the Port Authority
pursuant to this Agreement:
(1) renders uninhabitable, untenantable or unusable (i) 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, (ii) more than fifty percent
(50%) of Area A, Area A-1 or any other portion of the premises
constituting a full floor of the Building, or (iii) more than fifty
percent (50%) of the entire premises;
(2) such failure of service or the presence of such material,
as the case may be, is not the result of the fault of the Lessee, its
officers, employees, agents or contractors, and
(3) the Lessee shall give notice to the Port Authority of such
fact and shall thereafter not use the premises or said portion thereof
for the Lessee's operations permitted
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by the Section of this Agreement entitled "Rights of User by the
Lessee" for three (3) consecutive business days,
then for the period commencing on the date of the Lessee's notice and continuing
for so long as such uninhabitable, untenantable or unusable 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") (X) solely as to the portion
of the premises so rendered uninhabitable, untenantable or unusable and which is
unused, (Y) the entirety of Area A, Area A-1 or such other full floor portion of
the premises, in the case more than fifty percent (50%) of such Area or of such
full floor portion of the premises is rendered uninhabitable, untenantable or
unusable and the entirety of such Area or of such full floor portion of the
premises is unused, or (Z) the entire premises, in the case more than fifty
percent (50%) of the entire premises is rendered uninhabitable, untenantable or
unusable and the entire premises is unused. In the event that such
uninhabitable, untenantable or unusable condition shall continue for more than
sixty (60) consecutive calendar days after such notice of the Lessee or the
number of entire business days in more than one such uninhabitable, untenantable
or unusable period following notice of the Lessee shall exceed sixty (60) entire
business days in any twelve (12) calendar month period, then the Lessee shall
have the right, by thirty (30) days prior notice to the Port Authority given at
any time thereafter in any such uninhabitable, untenantable or unusable period
or within thirty (30) days after the end thereof, to terminate the letting of
the entire premises under this Agreement with the same effect as expiration. For
the purposes of this paragraph (c) the Lessee shall be deemed to not be using
the premises or portion thereof if no employees shall be located thereon for the
regular conduct of its business.
(d) The inability of either party to pay for goods, services
or pay its debts as they become due shall not be deemed to be a cause or
condition beyond the control of such party for the purposes of this Agreement,
nor shall such inability excuse either party from performing any obligation set
forth in or arising under this Agreement.
Section 40. Premises
The Lessee acknowledges that except as expressly set forth in
this Agreement 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. Without limiting any obligation of the Lessee to commence operations
hereunder at the time and in the manner stated elsewhere in 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 for the conduct of the
Lessee's operations hereunder so that there is an unreasonable likelihood 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 adjacent exterior building walls and glass
to and including the exterior surface thereof, provided, that nothing herein
shall be construed to require the Lessee to clean, maintain or repair the
building's exterior windows (except for the interior surface thereof, to the
extent the cleaning of such surface is not included in the services provided by
the Port Authority without separate charge and described in Schedule B attached
to this Agreement) exterior walls (except for the interior space thereof), or
roof, except under circumstance as to which paragraph (b) of the Section
entitled "Maintenance and Repair" applies, subject to the provisions of the
Section hereof entitled "Casualty" and the provisions of the Section hereof
entitled "Liability Insurance".
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Section 41. Governmental Compliance
(a) In the event that possession of 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 promulgated
by a governmental authority other than the Port Authority, and, provided, that
on an economic or operational basis it would be impracticable to comply with
such requirement in another manner, the Port Authority shall give the Lessee
ninety (90) days' prior written notice, except in the case of an emergency in
which case it shall give the Lessee such notice as may be practicable, 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". The
Lessee may elect to terminate this Agreement if as a result of such taking or
conveyance, (1) the Lessee no longer has a reasonable means of access to the
remaining portion of the premises, or (2) the portion of the premises taken
constitutes more than twenty thousand (20,000) rentable square feet and a
responsible officer of the Lessee certifies that in the good faith judgment of
the Lessee, the Lessee cannot reasonably operate its business in the remaining
portion of the premises in substantially the same manner as such business was
operated prior to such taking. The Lessee shall give notice to the Port
Authority of any election to terminate this Agreement within sixty (60) days
after such taking or conveyance set forth in the preceding sentence is given by
the Port Authority to the Lessee, such termination to be effective on the date
specified in the Lessee's notice but not later than one hundred eighty (180)
days following the date of the Lessee's notice. Upon the date specified in the
Lessee's notice, the term of this Agreement shall terminate with the same force
and effect as if the effective date of termination were the original date of
expiration hereof. Any notice of termination given by the Lessee pursuant to the
provisions of this paragraph shall not be effective if at the time of the giving
of such notice or on the intended effective date thereof the Lessee is in
default (after the giving of any required notice and the expiration of any
applicable cure period) in the payment of any monetary obligation owing to the
Port Authority under this Agreement. If any basic rental or additional basic
rental is due to the Port Authority for any portion of the term prior to the
effective date of termination or if any basic rental or additional basic rental
has been paid by the Lessee for any portion of the term subsequent to the
effective date of termination, the same shall be payable by the Port Authority
or by the Lessee to the other, as the case may be, within twenty (20) days after
demand therefor.
In the event of a taking that does not result in the
termination of this Agreement, the Port Authority shall, at its sole cost and
expense and regardless of whether any award(s) shall be sufficient for the
purposes, proceed with due diligence, except for causes or conditions beyond its
control, to repair, alter and restore the portion of the Building in which the
premises are located and the remaining part of the premises (including, without
limitation, all leasehold improvements), to
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the extent feasible, to their condition immediately prior to the taking so as to
constitute the remaining portion of the Building and the remaining part of the
premises complete and tenantable.
Section 42. 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 and during the hours between
8:00 o'clock A.M. and 6:00 o'clock P.M. on legal holidays (as defined
in Exhibit R) on which the New York Stock Exchange is trading, heat,
ventilation and air cooling in accordance with the design criteria and
capacities set forth in Schedule D attached to this Agreement and
hereby made a part hereof;
(2) Cleaning services, including trash removal, as described
in Schedule B attached hereto and hereby made a part hereof;
(3) (i) During normal business hours, passenger elevator
service to the premises, which service shall be reduced outside of
normal business hours to no less than two (2) cars (except in case of
an emergency or repairs); and (ii) during normal business hours, one
(1) freight elevator car serving the premises and the entire Building
on call on a "first come, first served" basis, and outside of normal
business hours, freight elevator service as provided below in this
paragraph (a);
(4) Cleaning of the exterior surfaces of the exterior building
glass no less than once during each twelve (12) month period during the
term of the letting; and
(5) The Lessee shall have non-exclusive access to and use of
the loading dock area in the basement of the World Trade Center on a
"first come, first served" basis in common with, and subject to the
rights of, all other tenants and occupants of the World Trade Center.
The Port Authority has made no representations or warranties with
respect to the security or safety of the loading dock area or of any of
the Lessee's property left therein and the Lessee shall assume all risk
of any damage, loss or theft thereof or thereto occurring from any
cause whatsoever. The Lessee shall not use the loading dock area for
automobile parking or for any other non-commercial use.
There shall be no charge for the reserved use of freight elevator service
outside of normal business hours in connection with the Lessee's initial moving
of its property into the premises or any space added to the premises after the
date hereof at or prior to the commencement of its use of the premises or any
such space added to the premises for the purposes set forth in the Section of
this Agreement entitled "Rights of User by the Lessee", such reservation to be
subject to the availability of elevator capacity at such times. In addition, the
Lessee shall be entitled to up to one hundred twenty (120) hours of freight
elevator lifting and hoisting services, without charge, for its construction
material during the performance of its initial construction and installation
work. All other freight elevator usage and all heating ventilating and
air-conditioning service, in each case outside of normal business hours or on
other than business days, ("overtime usage") including without limitation
thereto the use of freight elevators for transporting construction materials and
personnel, shall be requested by the Lessee in accordance with the Port
Authority's rules and regulations in effect at the time of such request.
Overtime freight elevator service will be on a reservation "first come, first
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served" basis and the Lessee agrees to pay charges to the Port Authority for
such other overtime freight elevator usage at the rates, if any, in effect from
time to time (as they may be increased) generally charged by the Port Authority
to other tenants of the World Trade Center. The charge for overtime heating,
ventilating and air cooling service shall be at the rate of Twenty-seven Dollars
and Fifty Cents ($27.50) per fan hour with a minimum usage of not less than two
(2) hours, and a minimum activation of not less than two (2) fans; such charges
shall be subject to increase by the Port Authority from time to time but shall
in no event exceed the rates, if any, in effect from time to time generally
charged by the Port Authority to other tenants of the World Trade Center. The
charges for overtime freight elevator service and heating ventilating and
air-conditioning service shall be payable within thirty (30) days after demand
therefor and shall be recoverable with like remedies as if they were a part of
the basic rental reserved under this Agreement.
(b) With respect to each partial floor constituting a part of
the premises, the Port Authority shall, without additional charge, furnish
non-exclusive toilet and washroom facilities for the Lessee's officers, members,
employees, agents, representatives, contractors, customers, guests and invitees.
The Port Authority shall furnish, without charge to the Lessee, hot
(approximately 140(Degree)F) and potable cold water for sanitary purposes in the
public bathrooms located in the portions of the premises shown in horizontal
hatching on Exhibit A and on any Exhibit depicting a full floor constituting a
part of the premises and in any pantries, kitchenettes, bathrooms or drinking
fountains constructed or installed by the Lessee pursuant to the applicable
provisions of the Section of this Agreement entitled "Construction by the
Lessee" and in accordance with paragraph (e) of the Section of this Agreement
entitled "Responsibilities of the Lessee". In the event that the Lessee shall
construct one or more full kitchens (not pantries or kitchenettes, which do not
have a stove or conventional oven) in the premises pursuant to the provisions of
the Section of this Agreement entitled "Construction by the Lessee" or shall
construct more than two (2) such pantries or kitchenettes (or any combination
thereof in excess of two (2)) on any one floor comprising the premises, then the
Lessee shall pay the Port Authority for cold and hot water provided to such
kitchens and pantries in accordance with the following provisions. The Port
Authority shall measure the quantities of such cold and hot water supplied to
the Lessee for such kitchens and pantries and kitchenettes (to the extent there
are more than two (2) pantries or kitchenettes or any combination thereof in
excess of two (2) on any one (1) floor) by meters to be installed by the Port
Authority for such purpose and the Lessee shall pay to the Port Authority for
such cold water and hot water as billed by the Port Authority from time to time
at the following rates; (i) cold water at the rate of Thirty-six Dollars and
Sixty-eight Cents ($38.68) per thousand cubic feet, and (ii) 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 from time to time by reason of
increase in rates charged the Port Authority as provided in paragraph (f) of
this Section 42, and with respect to the charge for metered hot water to also 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, 1996. From and after the effective date of each wage rate
established during the term of the letting under this Agreement, the Lessee
shall pay charges for metered hot water in addition to the charge set forth
above, such additional charge to be an amount computed by multiplying the said
charge 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
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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 reasonably 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 said charge as provided for herein.
(c) (i) Subject to all the terms and provisions of this
Agreement, the Port Authority shall furnish to the Lessee electricity to the
electric closets on each floor on which the premises are located consisting of
ten ▇▇▇▇▇ per usable square foot and the Lessee shall pay for the consumption
and demand for electricity in each Area of the premises by or on behalf of the
Lessee from and after the Commencement Date for that Area (without duplication
of payment for the period prior to execution of the Agreement by the parties
hereto). The consumption of and demand for electricity in the premises (being
hereinafter referred to as "consumption and demand") shall, subject to the
provisions of the following sentence, be measured by a meter or meters having a
glass exterior surface furnished by the Port Authority at its expense for that
purpose and installed at its expense (but nothing herein shall relieve the
Lessee from performing all other work that may be necessary to measure the
Lessee's consumption and demand by meter as provided in the Section of this
Agreement entitled "Construction by the Lessee") on or off the premises, and in
the event any meter fails to record such consumption and demand, 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,
either immediately before or immediately after such interruption as reasonably
selected by the Port Authority. In the event that a meter to measure the
consumption and demand for electricity has not been installed in any portion of
the premises on the commencement date of the letting of any such portion of the
premises then in such event and until such meter is so installed in such portion
of the premises the Port Authority shall periodically throughout the term of the
letting at such times as the Port Authority may elect arrange for a survey of
such unmetered portion of the premises by an independent utility consultant to
be selected by the Port Authority (and to be reasonably acceptable to the
Lessee) for the purpose of establishing the Lessee's consumption and demand for
electricity in such portion of the premises. The determination of such
consumption and demand by survey shall be based on the wattage of lamps and any
other electrical machinery and the frequency and duration of the use thereof in
the premises. The Lessee shall pay the cost of such consumption and demand,
either as determined by meter or survey, for each such billing period to the
Port Authority within twenty (20) days of demand therefor and the same shall be
deemed additional rental collectible in the same manner and with like remedies
as if it were part of the basic rental reserved hereunder. The Lessee's
consumption and demand shall be paid for by the Lessee at the rate of one
hundred fifteen percent (115%) of the rates (including the fuel or other
adjustment factor, if any,) which at the time of each billing period (as such
billing periods are established by the public utility providing electricity in
the vicinity of the World Trade Center) is actually paid by the Port Authority
to the Power Authority of the State of New York ("PASNY") provided, that, if the
rates actually paid by the Port Authority to PASNY shall vary based upon the
amount of usage, the Lessee's total consumption and demand in the premises shall
be paid for by the Lessee at the rate of one hundred fifteen percent (115%) of
the average cost per kilowatt hour of consumption and the average cost per
kilowatt of demand (including the fuel or other adjustment factor, if any) per
billing period actually paid by the Port Authority to PASNY. In the event that
the Port Authority shall no longer be eligible or able to receive electricity
from PASNY or in the event that the World Trade Center or the building in which
the premises is located is sold and the new owner thereof is unable to obtain
electricity from PASNY, then the Lessee's consumption and demand of electricity
per billing period shall be paid for by the Lessee at one hundred percent (100%)
of the average cost (including the fuel or other adjustment factor, if any) per
kilowatt hour of consumption and the
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average cost per kilowatt of demand per billing period actually paid to the
public utility company for supplying electricity to the World Trade Center or to
the Building for such billing period. The Lessee acknowledges that its
consumption and demand for electricity shall include the use of electricity by
the Port Authority and its cleaning contractor for lighting and for normal and
usual electrical equipment required to be used in connection with the cleaning
of the premises. The Port Authority will request its cleaning contractor to make
reasonable efforts to conserve the use of electricity in connection therewith.
The Lessee's consumption and demand shall not include any electricity consumed
in connection with the furnishing by the Port Authority of base building heat,
ventilation and air-cooling to the premises. The Lessee shall have the right at
its cost and expense to install a totalizing meter for the measurement of its
demand and consumption of electricity in the premises.
(ii) 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 or by the public utility company
furnishing electricity to the Building from metering or measuring consumption
and demand as set forth in subparagraph (i) of this paragraph (c) or elects not
to so meter or measure the same provided that unless prevented by law or by the
public utility company furnishing electricity to the Building, the Port
Authority will not discontinue the supply of electricity to the Lessee unless it
discontinues such supply to all non-governmental entities in the Building. 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 conversion and if any lines or equipment of the Port Authority are
with the consent of the Port Authority used therefor the Port Authority may make
an appropriate charge therefor to the Lessee based on its reasonable costs and
expenses for the said lines and equipment. If the Port Authority discontinues
the supply of electricity for reasons other than being prevented by law or by
the public utility company furnishing such electricity, the Port Authority shall
grant the Lessee a credit against its rental obligations next becoming due in an
amount equal to the Lessee's reasonable out-of-pocket costs of performing the
construction necessary for conversion. If the Port Authority discontinues the
supply of electricity because it is prevented by law or by the public utility
company furnishing such electricity, the Port Authority shall grant the Lessee a
credit against its rental obligations next becoming due in an amount equal to
fifty percent (50%) of the Lessee's reasonable out-of-pocket costs of performing
the construction necessary for conversion. The Port Authority shall grant the
credit provided for herein within thirty (30) days after receipt of a statement
certified by the chief financial officer of the Lessee setting forth the
itemized costs of such conversion and all documents reasonably required by the
Port Authority in reasonably sufficient detail to substantiate the reasonable
out-of-pocket costs incurred by the Lessee. So long as the Lessee shall proceed
diligently to perform such necessary construction and to make such arrangements
or conversions, the Port Authority, to the extent permitted by law will not
discontinue supplying electricity to the premises until the Lessee shall have
been able to make all necessary arrangements to obtain such electric service
directly.
(iii) If the Lessee shall be entitled to receive any rebate,
whether from Consolidated Edison, the New York Power Authority or any other
public utility company or federal, state or city agency, by reason of the
installation by the Lessee, at its sole cost and expense and subject to the
provisions and conditions of an approved Construction Application (if required
by the provisions of the Section of this Agreement entitled "Construction by the
Lessee"), of energy efficient lighting, equipment and fixtures in the premises,
and if such rebate is granted to the Port Authority as the owner of the Building
(rather than directly to the Lessee) or is granted to the Lessee,
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the Port Authority shall, subject to authorization of the Board of Commissioners
of the Port Authority (and the Port Authority agrees to use its best efforts to
bring such matter to the Board of Commissioners of the Port Authority if such
authorization is required), if such is required, execute any forms supplied by
the utility company or such agency which must be executed by the owner of the
Building in order to permit the Lessee to obtain such rebate and shall pass
along to the Lessee the entire amount of the rebate applicable to the premises
if such rebate is granted to the Port Authority as the owner of the Building,
rather than directly to the Lessee. The Port Authority shall not be required by
reason of the provisions of this subparagraph, to incur or undertake any
obligation, except as expressly set forth herein, or to incur any unreimbursed
monetary obligation, or to perform any act which is detrimental to the Port
Authority or to the Building in which the premises is located, or the World
Trade Center or to other tenants.
(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. Nothing in the foregoing shall be construed to
relieve the Port Authority from supplying heating, ventilating and air cooling
to the premises in accordance with the design capacities and 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, provided, that nothing herein shall be
construed to relieve the Port Authority from providing heating, ventilation and
air cooling in accordance with the design capacities and specifications set
forth in Schedule D.
(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 knowingly otherwise waste or dissipate
the air cooling or heating services.
(f) If any federal, state, municipal or other governmental
body, authority or agency (other than the Port Authority) 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 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 on
thirty (30) days' prior notice to the Lessee, pay, in accordance with said
notice, the entire amount of such charge, fee or rent or increase thereof (if
such charge, fee or rent relates to a service, system or utility which is only
supplied to the premises), the amount of such charge, fee or rent or increase
thereof allocated to the Lessee by the governmental body, authority or agency or
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the public utility assessing, levying, imposing, making or increasing such
charge, fee or rent or increase (if such charge, fee or rent relates to a
service, system or utility which is billed on a per user basis), or the Lessee's
Proportionate Share thereof, as such term is defined in Schedule A or Schedule
A-1, as the case may be (if such charge, fee or rent relates to a service,
system or utility which is available or supplied to (1) the premises and any
other portion of the World Trade Center, (2) areas of the World Trade Center not
rented to or occupied by tenants, or (3) both), either directly to the
governmental body, authority or agency or to the public utility or directly to
the Port Authority, provided, that the Port Authority may not charge any such
charge, fee or rent or increase thereof directly to the Lessee if it is also
included in Operating Expenses as defined in Schedule A (or Schedule A-1, as the
case may be) attached to this Agreement, but nothing in the foregoing proviso
shall be deemed to prohibit the Port Authority from electing, from time to time,
whether to include such charge, fee or rent or increase thereof in Operating
Expenses or to charge the same directly to the Lessee (and not to so include the
same in Operating Expenses) except as may be provided in the last sentence of
this paragraph (f). In the event that such charge, fee or rent or increase
thereof shall be included in Operating Expenses for the purpose of determining
additional basic rental for any Escalation Year, as defined in such Schedule,
then the appropriate amount of such charge, fee or rent shall also be included
in Operating Expenses for the Base Operating Year, as also so defined, for such
purpose. Nothing in this paragraph (f) shall require or be deemed to require the
Lessee to pay a charge, fee or rent or increase thereof for any service, system
or utility described in this paragraph (f) which is not actually provided to the
premises or actually used by the Lessee, directly or indirectly. The Port
Authority hereby agrees that unless any such charge, fee or rent shall be based
upon the consumption of a service or utility by the Lessee and other tenants at
the Facility, such charge, fee or rent shall, to the extent permitted under
Schedule A or Schedule A-1, as the case may be, be included as a cost of
operation and maintenance pursuant to Schedule A or Schedule A-1, as the case
may be, rather than charged directly to the Lessee pursuant to the provisions of
this paragraph.
(g) Subject to the provisions of this Agreement, including but
not limited to the provisions of the Section of this Agreement entitled "Force
Majeure", the Port Authority shall have the right to discontinue temporarily the
supply of any of the above services when necessary 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 to the Lessee two (2) days' notice prior to discontinuing the supply
of services pursuant to this paragraph, estimating the length of such
discontinuance, except in the case of an emergency in which case it shall give
the Lessee such notice, if any, as may be practicable. The Port Authority will
use reasonable efforts to minimize the duration of any such temporary
discontinuance of services and except in case of emergency, if such
discontinuance threatens the health or safety of any occupant of the premises or
materially interferes with the Lessee's ability to conduct its business, the
Port Authority shall confine all such discontinuances to other than normal
business hours. Nothing in this paragraph (g) shall be deemed to limit the
provisions of paragraph (c) of the Section of this Agreement entitled "Force
Majeure".
(h) 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 wilful or negligent acts or
omissions of the Port Authority, its Commissioners, employees, agents or
contractors, but nothing in this paragraph (h) shall be deemed to limit the
provisions of paragraph (c) of the Section of this Agreement entitled "Force
Majeure".
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(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, but nothing in this paragraph (i) shall be deemed
to limit the provisions of paragraph (c) of the Section of this Agreement
entitled "Force Majeure".
(j) 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.
(k) The Lessee, subject to all the terms and conditions of
this Agreement and in conjunction with its permissible operations in the
premises, shall have (i) the non-exclusive right to access and use all of the
telephone and electrical closets on each floor where the entire floor is
included in the premises and (ii) the non-exclusive right where reasonably
necessary to access and use all of the telephone and electrical closets on any
floor of the premises where only a portion of such floor is included in the
premises.
(l) Subject to all the terms and conditions of this Agreement
and any reasonable procedures established by the Port Authority in connection
thereunder, the Lessee shall have the right to obtain cable television and other
telecommunications services from suppliers of the same authorized by the Port
Authority to supply the same to tenants in the Building.
(m) From and after the earlier of the Area A Commencement Date
and the Area A-1 Commencement Date, the Port Authority will furnish condenser
water, sufficient for a rated capacity not exceeding fifty-five (55) tons, for
use by the Lessee in air-cooling equipment installed by the Lessee in the
premises, and auxiliary air, not to exceed one thousand one hundred (1,100)
cubic feet per minute in addition to that furnished to the Lessee by the
standard building system, for use by the Lessee in ventilating equipment
installed by the Lessee in the premises. The Lessee agrees to pay to the Port
Authority for such condenser water an annual charge at the rate of One Thousand
One Hundred Twenty-three Dollars and Thirty-one Cents ($1,123.31) per ton of the
rated cooling capacity of the Lessee's equipment as reasonably determined by the
Port Authority and for such auxiliary air an annual charge at the rate of Six
Dollars and Ten Cents ($6.10) per cubic foot per minute of rated capacity for
which the Lessee's equipment is designed as reasonably determined by the Port
Authority; such charges to be subject to increase as provided in paragraph (o)
of this Section. Upon the installation of the Lessee's air-cooling equipment or
ventilating equipment, or in the event of any changes made in such air-cooling
equipment or ventilating equipment or the installation thereof, the Lessee shall
supply to the Port Authority such certifications of rated capacity as the Port
Authority may reasonably request, including certifications of the Lessee's
licensed engineer.
(n) In the event that the Port Authority in its sole
discretion elects to construct a system, including the necessary risers, capable
of providing chilled water to the Lessee's premises for use in air cooling
equipment installed or to be installed by the Lessee in the premises (it being
understood that the Port Authority shall have no obligation to construct such
chilled water system) then the Port Authority upon completion of such chilled
water system will notify the Lessee (hereinafter in this paragraph (n) called
the "Availability Notice") and upon reasonable prior notice thereafter from the
Lessee, and provided the Port Authority has chilled water then available to
supply
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to the Lessee without performing additional construction, will furnish chilled
water to the Lessee in the premises for operation of the equipment comprising
air cooling facilities to be installed by the Lessee, provided, that if the
Lessee requests chilled water within one (1) year after the Availability Notice
then the Port Authority will supply the amount of chilled water requested by the
Lessee sufficient for a rated capacity not to exceed fifty-five (55) tons. The
Lessee agrees to pay to the Port Authority for such chilled water an annual
charge at the rate of One Thousand One Hundred Eighty-four Dollars and
Twenty-four Cents ($1,184.24) per ton of the rated cooling capacity of the
Lessee's equipment as reasonably determined by the Port Authority; such charges
to be subject to increase both prior and subsequent to the commencement of
chilled water usage by the Lessee, as provided in paragraph (o) of this Section.
The Port Authority will not be obligated to furnish chilled water to the Lessee
unless and until the Port Authority and the Lessee enter into an agreement (the
"Chilled Water Agreement") for the furnishing of same, which agreement will be
substantially in accordance with the terms and conditions of this paragraph and
paragraphs (o) and (p) of this Section and shall be promptly prepared by the
Port Authority and delivered to the Lessee after notice from the Lessee
requesting chilled water and the Port Authority agrees to deliver a fully
executed copy of such Chilled Water Agreement to the Lessee within thirty (30)
days after receipt of such Chilled Water Agreement executed and acknowledged by
an authorized officer of the Lessee. Upon the installation of the Lessee's
air-cooling equipment which uses chilled water or in the event of any changes
made thereto, the Lessee shall supply to the Port Authority such certifications
of rated capacity as the Port Authority may reasonably request including
certifications of the Lessee's licensed engineer. The Lessee will be obligated
to pay for all chilled water which is initially requested by the Lessee and
which the Port Authority is obligated to provide hereunder regardless of whether
the Lessee uses or discontinues such use. In the event that the Lessee shall
install air cooling equipment using chilled water the Lessee may discontinue the
use of condenser water in its air cooling equipment, and shall thereafter not be
charged for such condenser water usage, provided, that the Lessee's air cooling
equipment shall be promptly disconnected from the Port Authority's condenser
water system, at the Lessee's sole cost and expense.
(o) The annual charges for condenser water, auxiliary air and chilled
water shall be payable 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 they were a part of the basic rental reserved under the Lease.
The said charges 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, 1998. From and after the
effective date of each wage rate established from and after January 1, 1998, the
Lessee shall pay charges in addition to that stated above for condenser water
and auxiliary air (and the charge for chilled water shall be adjusted, whether
prior or subsequent to the commencement of chilled water usage by the Lessee),
such additional charge for 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,
such additional charge for auxiliary air to be an amount computed by multiplying
the charge for auxiliary air set forth in paragraph (m) of this Section by
one-fifth (1/5th) of the percentage increase in the wage rate so established
over the basic wage rate, and such adjustment or additional charge for chilled
water to be an amount computed by multiplying the charge for chilled water set
forth in paragraph (n) of this Section 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
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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.
(p) The Port Authority shall have no responsibility whatsoever
under this Section or otherwise for conditioning or cooling the air in those
portions of the premises served by the air-cooling equipment or the ventilating
equipment installed by the Lessee nor for the maintenance therein of any
specified temperature or comfort level, provided, however, that nothing in this
sentence shall be construed to relieve the Port Authority from providing heat,
ventilation and air cooling in the premises in accordance with the
specifications provided in Schedule D. The Lessee shall and does hereby release
the Port Authority from and shall indemnify the Port Authority against any and
all claims and demands, losses or damages (including but not limited to any such
occurring to any data processing or other equipment located in the premises or
any work product thereof or any loss of data, loss of business and business
interruption losses) arising or resulting from the failure to maintain a proper
temperature or air quality in such portions of the premises and regardless of
whether the same is due to the acts or omissions of the Port Authority, the
Lessee or of others. The Port Authority shall remain fully liable for all damage
to equipment and other property owned or leased by the Lessee (excluding,
however, loss of data, loss of business and business interruption losses and all
personal injury) arising as a result of the chilled water which the Port
Authority provides to the point of connection to the Lessee's equipment being
contaminated. Nothing herein shall be construed to relieve the Port Authority
from furnishing heat, ventilation and air cooling in accordance with the
provisions of paragraph (a) of this Section 42 and Schedule D attached hereto.
There shall be no tap-in charge for connecting the Lessee's air cooling and
ventilating system to the Port Authority's condenser water, auxiliary air supply
or chilled water system, provided, that, except in the case of the first
connection of the Lessee's condenser water system to the Building system and the
case of the first connection of the Lessee's chilled water system to the
Building system (if chilled water is made available to the Lessee pursuant to
this Section), the Port Authority may impose a charge if it is necessary to
drain all or part of its condenser water or chilled water system in order to
effectuate such connection, provided, further, that the Lessee shall perform all
such connection work at its sole cost and expense.
Section 43. Partnership Provision
If the Lessee is a partnership on the date set forth in the
first line of this Agreement or, if the Lessee should assign this Agreement to a
partnership with the consent of the Port Authority, the individuals constituting
the partnership from and after the said date or the effective date of such
assignment, as the case may be, shall be and continue to be jointly and
severally liable for performing and observing the obligations of the Lessee
hereunder except as expressly provided in this Section. Furthermore, any new
partners of the Lessee shall, by their admission as partners, be deemed to have
assumed liability jointly and severally with the then partners for the
obligations of the Lessee under this Agreement, arising subsequent to their
admission as partners, and neither the admission of new partners nor the
withdrawal of partners shall be a violation of the Section of this Agreement
entitled "Assignment and Sublease" or of paragraphs (a)(4) or (a)(6) of the
Section of this Agreement entitled "Termination", or any other provision hereof,
if the conditions hereinafter stated in this Section are satisfied. The Lessee
shall notify the Port Authority of the admission of each new partner
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and shall supply to the Port Authority a written agreement executed by each new
partner confirming assumption of liability as described above. Notwithstanding
any provisions of this Agreement, or any law to the contrary, or the provisions
of any agreement executed by the Lessee during the term of the letting, if any
partner of the Lessee shall die during the unexpired portion of the term of this
Agreement, or if any partner of the Lessee shall complete his or her retirement
from the Lessee, or sever his or her connection with the Lessee for reasons
other than death or retirement, during the unexpired portion of the term of this
Agreement, such partner and his or her estate shall be relieved of all liability
for performance of Lessee's obligations under this Agreement accruing after such
death, retirement or severance, provided, that in order to obtain such release
with respect to any such partner the Lessee shall give notice to the Port
Authority on behalf of the deceased, retiring or withdrawing partner of such
death, retirement or severance, and, provided, further, that the total
partnership assets available to meet the obligations of the Lessee under this
Agreement immediately after such death, retirement or severance shall not be
materially less than the total partnership assets available to meet the
obligations of the Lessee under this Agreement immediately prior to such death,
retirement or severance.
Section 44. Additional Space
(a) In the event that any adjacent office space, as defined in
this paragraph (a), shall be or becomes "available for leasing" during the
letting of the premises under this Agreement, and provided the Lessee is not
then in default (after the giving of any required notice and the expiration of
any subsequent period to cure such default specifically provided for in this
Agreement) in the payment of any amount of basic rent, additional basic rent or
cleaning or electricity charges, nor, on the date of the giving of said notice,
has the Lessee been served with a notice of termination of this Agreement by the
Port Authority and that this Agreement is in full force and effect, prior to
entering into an agreement with a third party covering the letting of such
available office space the Port Authority shall offer such Additional Space to
the Lessee by notice in writing setting forth the date that it expects such
space to become available or ready for occupancy and the number of rentable
square feet comprising such available space (the said available office space so
offered being hereinafter called the "Additional Space", provided, that if such
available office space shall constitute all of the office space located on such
floor or if, on the date of the offer referred to in this sentence, the
Additional Space together with one or more portions of the premises leased by
the Lessee pursuant to this Section 44 and located on the same floor as such
Additional Space shall constitute all of the office space located on such floor,
then the Additional Space shall also include the elevator lobby, corridor,
closet (other than utility closet) and toilet spaces on such floor). The Lessee
shall have the right, by written notification to the Port Authority subscribed
by the president or a vice president of the Lessee and delivered to the Port
Authority within thirty (30) days after receipt of the Port Authority's notice,
to accept the Additional Space unconditionally in its entirety on the terms and
conditions set forth in this Section 44 for the balance of the term of the
letting under the Lease. For the purposes of this Agreement space shall be
deemed adjacent at any given time if at that time it is on the same floor as a
portion of the premises or if it is located on a floor immediately above or
below a floor not less than one-half (1/2) of the rentable square feet of which
at that time constitutes a portion of the premises.
(b) Within thirty (30) days after the date that the Lessee
notifies the Port Authority of the Lessee's acceptance of such Additional Space
the Port Authority shall prepare and submit to the Lessee for its execution an
appropriate document supplementing this Agreement and providing for the letting
of such space to the Lessee as part of the premises and thereafter the term
"premises" as used in this Agreement shall include such Additional Space. Said
supplemental agreement shall
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provide for the letting of such Additional Space on the terms and conditions set
forth in this Agreement, except as provided otherwise in paragraph (d) of this
Section 44. The Lessee shall execute the said supplemental agreement by an
authorized officer and return it to the Port Authority within thirty (30) days
after its receipt thereof, provided, that the provisions of said supplemental
agreement are in conformity with the provisions of this Agreement as modified by
this Section 44. If the Lessee complies with the provisions of the foregoing
sentence, the Port Authority agrees to deliver a fully executed original of such
supplemental agreement to the Lessee within thirty (30) days after receipt by
the Port Authority of such supplemental agreement so executed and acknowledged
by the Lessee. In the event that the Lessee fails to notify the Port Authority
of the Lessee's unconditional acceptance of said Additional Space within the
time period set forth in this Section or in the event that the Lessee shall fail
to execute, acknowledge and deliver said supplemental agreement to the Port
Authority within said thirty (30) day period, provided, that the provisions of
said supplemental agreement are in conformity with the provisions of this
Agreement as modified by this Section 44, then the Lessee shall thereupon have
no further rights or interest in or to such Additional Space and the provisions
of this Section with respect thereto shall be of no further force or effect
throughout the balance of the term of the letting under this Agreement and the
Port Authority shall have the right to lease such space, or any portion thereof,
to any third party on terms or conditions (including but not limited to rental,
term, space finishing and use provisions) different from those which would have
governed the letting to the Lessee of such space and on more or less favorable
terms and conditions, all as the Port Authority in its sole discretion may
determine, provided, that in the event that such Additional Space or a portion
thereof which was previously offered to the Lessee hereunder shall be leased to
another and shall thereafter be or become "available for leasing", the Port
Authority will offer such Additional Space or such portion thereof to the Lessee
prior to entering into an agreement with a third party covering the letting of
such Additional Space or such portion thereof as set forth in this Section 44.
(c) The Lessee expressly understands and agrees that the Port
Authority in its reasonable discretion shall determine the availability for
leasing, within the conditions set forth in this Section, of any adjacent space
and nothing contained herein shall obligate or be construed to obligate the Port
Authority to furnish or make available to the Lessee any particular space or to
terminate the letting or otherwise end the occupancy of any tenant in possession
of any space or of any portion thereof prior to the scheduled expiration date of
any such letting, nor shall anything herein prevent the Port Authority, without
any liability of any kind to the Lessee, from extending or renewing any lease or
otherwise continuing in occupancy a tenant of any space, or from consenting to
an assignment of any lease, or from consenting to a sublease covering any space.
No space shall be deemed "available for leasing" for purposes of this Section if
it is then rented to or under negotiation with a then existing tenant of such
space, or under negotiation with a prospective tenant after having been offered
to the Lessee pursuant to this Section, or if a tenant thereof relets or extends
or otherwise modifies or amends the term of the letting of such space or any
portion thereof, or, except with respect to space located on the eighty-seventh
(87th) or ninetieth (90th) floors of the Building, if such space is subject to
the then existing right of another tenant to include such space in the premises
under such other tenant's lease. Nothing herein shall be deemed to limit the
Port Authority's right to freely discuss and negotiate with third parties for
the leasing of any space in the World Trade Center, subject only to the Lessee's
express right to be offered adjacent space which is available for leasing in
accordance with the provisions of this Section.
(d) The supplemental agreement relating to such Additional
Space shall contain an exhibit depicting such Additional Space and a statement
of the number of rentable square feet comprising such Additional Space, such
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
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initial portions of the premises. Said supplemental agreement shall provide for
a commencement date of the letting of such Additional Space occurring on the
date on which vacant possession of such Additional Space for construction
purposes is tendered to the Lessee with the Port Authority Work, as described in
the Section of this Agreement entitled "Port Authority Work", performed in such
Additional Space. Tender shall be made by notice given at least five (5) days
prior to the actual date of such tender. The rent commencement date for such
Additional Space shall be (i) that number of days after the commencement date of
the letting of such Additional Space as shall equal the product obtained by
multiplying one hundred eighty (180) days 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 such Additional Space to the expiration date of the
letting under this Agreement and the denominator of which shall be one hundred
eighty (180) months, or (ii) such earlier date as the Lessee commences business
operations therein. The Port Authority will provide to the Lessee a Finishing
Work Allowance equal to the product obtained by multiplying (x) the product
obtained by multiplying Forty Dollars and No Cents ($40.00) by the number of
rentable square feet in such Additional Space, by (y) 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 such Additional Space to the expiration date
of the letting under this Agreement and the denominator of which shall be one
hundred eighty (180) months. The Lessee will accept such Additional Space in its
"as is" condition, but the Port Authority will perform the Port Authority Work
in such Additional Space, prior to the date it is made available to the Lessee.
The basic rental for such Additional Space shall be payable at the annual per
rentable square foot rate of Thirty-one Dollars and Eighty-five Cents ($31.85).
In addition to the basic rental, commencing with the rent commencement date for
such Additional Space, the Lessee shall pay additional basic rental therefor in
accordance with the provisions of Schedule A (or Schedule A-1 as the case may
be) attached hereto, with the base dates and amounts set forth in said Schedule
A or A-1 remaining unchanged and the commencement date of the letting for the
purposes of said Schedules being the commencement date of the letting of such
Additional Space.
Section 45. Lessee's Right to Extend the Letting
(a) The Lessee shall have the right to extend this Agreement
and the term of the letting hereunder, either as to the entire premises only, or
as to one or more full floors then constituting a portion of the premises, for a
five (5) year period effective upon the expiration date of the term of the
letting set forth in the Section of this Agreement entitled "Term", provided,
that the Lessee shall give unconditional written notice to the Port Authority of
its election to do so not later than five hundred forty-eight (548) days prior
to said expiration date and, provided, further, however, that no notice pursuant
to this paragraph (a) shall be effective if on the date of the giving of such
notice the Lessee is in default (after the giving of any required notice and the
expiration of any subsequent period to cure such default specifically provided
for in this Agreement) in the payment of any amount of basic rent, additional
basic rent or cleaning or electricity charges, or if on the date of the giving
of said notice the Lessee has been served with a notice of termination of this
Agreement by the Port Authority or if on the date of the giving of said notice
this Agreement is not then in effect.
(b) In the event the Lessee exercises the right set forth in
paragraph (a) of this Section then the letting during the extension period
provided for in said paragraph (a) shall be upon all of the same terms,
covenants, conditions and provisions of this Agreement including the obligations
of the Lessee to pay additional basic rental in accordance with Schedule A or
Schedule A-1, except that (1) the basic rental during the applicable extension
period shall be as determined
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pursuant to paragraph (c) of this Section 45, (2) "Tax Base" for purposes of
determining additional basic rental payable pursuant to paragraph 2 of Schedule
A shall mean the annual per rentable square foot factor to be used in computing
payments in lieu of taxes for tax year commencing on the July 1 immediately
preceding the commencement of the extension period, (3) "Tax Base" for purposes
of Schedule A-1 shall mean the annual amount of taxes for the tax year
commencing on the July 1 immediately preceding the commencement of the extension
period, (4) "Base Operating Year" for purposes of both Schedule A and Schedule
A-1 shall mean the calendar year immediately preceding the commencement of the
extension period, (5) the term "premises" as used in this Agreement shall mean
either the entire premises or such lesser portion thereof as is designated by
the Lessee in its notice delivered in accordance with the first sentence of
paragraph (a) of this Section, (6) "Rentable Square Feet in the Premises" for
purposes of both Schedule A and Schedule A-1 shall mean the number of rentable
square feet in the entire premises or such designated lesser portion thereof and
the "Lessee's Proportionate Share" as set forth in each such Schedule shall be
adjusted as set forth therein, (7) there shall be no free-rent period, rent
concessions or Lessee's Finishing Work Allowance provided by the Port Authority
with respect to the extension period, (8) the Port Authority shall have no
obligation to perform any construction and installation work in the premises or
provide any construction, finishing or other allowance with respect to the
extension period, and (9) the Lessee shall have no further right of extension.
(c) [Intentionally omitted]
(d) In the event the Lessee shall give to the Port Authority
the notice referred to in paragraph (a) of this Section, the Port Authority
shall, not later than three hundred (300) days prior to the commencement date of
the extension period, advise the Lessee in writing of the Port Authority's good
faith estimate of ninety percent (90%) of the fair market rental value for the
premises for the particular extension period (hereinafter called the "Port
Authority's Determination"). In the event the Lessee concludes that the Port
Authority's Determination exceeds ninety percent (90%) of the fair market rental
value for the premises for the extension period, the Lessee shall within thirty
(30) 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. In the event that the
arbitrator selected by the Port Authority and the arbitrator selected by the
Lessee cannot agree on the selection of a third arbitrator within ten (10)
business days after both are appointed, such third arbitrator shall be selected
in accordance with the then rules of the American Arbitration Association. The
arbitrators shall be individuals having at least five (5) years experience in
office leasing in the Borough of Manhattan south of 60th Street, familiar with,
and knowledgeable of, office leasing arrangements in the lower Manhattan real
estate market who have not been employed by either party to this Agreement or by
a consultant, agent or broker to or for either such party for a period of five
(5) years preceding the date of such arbitration. The arbitration shall be
pursuant to the then rules of the American Arbitration Association or any
successor organization and the question to be answered by the arbitrators shall
be:
"Does the Port Authority's Determination exceed ninety percent (90%) of
the fair market rental value for the premises for the extension
period?"
If the arbitrator's decision is in the negative (or if the Lessee does not
dispute the Port Authority's Determination and there is no arbitration) then
from and after the first day of the extension period, the Lessee shall pay to
the Port Authority the annual basic rental set forth in the Port Authority
Determination in equal monthly installments on the first day of the extension
period and on the first
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day of each calendar month thereafter for the balance of the extension period.
If the decision of the arbitrators is that the Port Authority's Determination
exceeds ninety percent (90%) of the fair market rental value for the premises
during the applicable extension period, the arbitrators shall thereupon
determine the fair market rental value for the premises (which annual basic
rental rate determined by the arbitrators shall not exceed the Port Authority's
Determination) and in such event from and after the first day of the extension
period the Lessee shall pay to the Port Authority an annual basic rental equal
to ninety percent (90%) of the fair market rental value for the premises so
determined by the arbitrators, which annual basic rental shall be payable in
equal monthly installments on the first day of the extension period and on the
first day of each calendar month thereafter for the balance of the extension
period. In the event the annual basic rental for the premises has not been
determined as herein provided prior to the commencement of the applicable
extension period, the Lessee shall continue to pay the monthly installments of
basic rental at the annual rate in effect on the last day of the initial term of
the letting, set forth in the Section of this Agreement entitled "Term", 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 during the period prior to such
determination, or, if the sum of the monthly installments of annual basic rental
actually paid by the Lessee during the portion of any extension period prior to
such determination is in excess of the sum of the monthly installments of annual
basic rental for such portion of such extension period as determined by
arbitration, the Port Authority will credit the Lessee with such excess against
the Lessee's rental obligations next becoming due under this Agreement. 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.
(e) For the purposes of this Agreement "fair market rental
value" shall mean rent at the rate that a willing tenant would pay and a willing
landlord would accept for comparable space in the World Trade Center taking into
account all appropriate factors presented by the parties to the arbitrators,
including without limitation thereto: (1) the Tax Base and Base Operating Year
to be used in determining additional basic rental payable for the premises
during such extension period, (2) that no consideration shall be given to the
fact that the premises are owned by a public authority, (3) that consideration
be given as to whether or not the Port Authority will incur a brokerage
commission, (4) that consideration be given to the fact that the Port Authority
will not grant a construction allowance or free rent period or incur other
leasing costs, and (5) that no consideration be given to the fact that the Port
Authority may not incur a period during which the premises would be vacant, such
factor having been taken into consideration in specifying that the Lessee is to
pay an annual basic rental equal to ninety percent (90%) of the fair market
rental value determined by the arbitrators; it being understood that such factor
is the only factor which is applicable to the fact that the Lessee is paying
annual basic rental equal to ninety percent (90%) of the fair market rental
value determined by arbitration.
Section 46. Port Authority Work
(a) Subject to the terms, conditions and provisions of the
Section of this Agreement entitled "Force Majeure", the Port Authority through
its employees, agents, representatives, contractors and subcontractors shall,
within thirty (30) days after receipt of written request from the Lessee
following completion by the Lessee of its construction and installation work in
the premises and in any Additional Space, clean, vacuum and put in good working
condition all
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base building heating, ventilation and air cooling induction units, including
the repair and replacement of all convector covers where necessary.
(b) The Port Authority, through its employees, agents,
representatives, contractors and subcontractors, shall perform the following
work in any Additional Space prior to the commencement date of the letting for
such Additional Space:
(1) where necessary, flash patch, smooth and level floors
where floor tiles have been removed;
(2) perform such work as is necessary to put the public
bathroom areas on the floor on which any Additional Space is located in
compliance with the applicable provisions and implementing regulations
of the Americans With Disabilities Act of 1990 (42 U.S.C. ss.12101 et
seq.) as amended effective on or before the date of such work
(hereinafter called the "ADA"); to put all the restrooms in good
working condition, including without limitation thereto the replacement
of all cracked tiles, the acid washing of grout, the replacement all
broken fixtures and all ceiling tiles, and the repainting of all
partitions; and to put the public corridors adjoining any Additional
Space in compliance with the applicable provisions of the ADA and, if
necessary, install Building standard speakers, warden phones and pull
stations in all public corridors adjoining any such Additional Space;
(3) if missing, provide sprinkler loops sized to New York City
Building Code requirement in the portion of the floor on which any
Additional Space is located;
(4) perform "slab to slab" demolition in each Additional Space
or perform such lesser demolition work in any particular Additional
Space as is requested by the Lessee in writing no later than one
hundred eighty (180) days prior to the commencement date for such
Additional Space;
(5) remove all telephone wires, electric wires and all cabling
from existing under-floor ducts in any Additional Space through to the
telephone cabinets on the floors on which such Additional Spaces are
located and flash patch any holes resulting from such work;
(6) Provide and replace any missing fireproofing on the
structural columns and the bottom surface of the floors above each
portion of any Additional Space, including any structural steel members
located in the ceiling area, promptly after all of such columns and
surfaces are exposed by the demolition work; and
(7) where present, remove vinyl asbestos floor tiles and
remove or cause to be removed from the premises and any Additional
Space any known Hazardous Materials, and any known asbestos and
asbestos containing material, as defined in the guidelines established
by the United States Environmental Protection Agency ("EPA") and set
forth in the EPA publication entitled "Guidelines for Controlling
Asbestos Containing Materials in Buildings" (EPA 560/5-85-024, June,
1985) except for certain non-friable asbestos which may remain within
enclosed perimeter columns and in the enclosed diagonal building walls
in the four corners of the building on the floors on which the premises
and such Additional Spaces are located, which remaining asbestos and
asbestos containing materials shall remain encased or enclosed and
shall not be penetrated by the Lessee.
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In addition, the Port Authority, through its employees, agents, representatives,
contractors and subcontractors, shall perform the work in the premises set forth
in subparagraph (3), subparagraph (6) and subparagraph (7) of this paragraph (b)
prior to the commencement of the letting of each Area of the premises, provided,
that the removal of vinyl asbestos tile may take place concurrently with the
demolition work to be performed by the Lessee pursuant to paragraph (n) of the
Section of this Agreement entitled "Construction by the Lessee"
(c) The term "Hazardous Materials", as used herein, shall mean
any flammables, explosives, radioactive materials, hazardous wastes, hazardous
and toxic substances or related materials, asbestos or any material containing
asbestos (as defined in the guidelines established by the EPA) and set forth in
the EPA publication entitled "Guidelines for Controlling Asbestos Containing
Materials in Buildings" (EPA 560/5-85-024, June 1985), or any other substance or
material included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "toxic substances", "contaminants" or any other
pollutant, regulated by any federal, state or local environmental law,
ordinance, rule or regulation, including the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, the Hazardous
Materials Transportation Act, as amended, and the Resource Conservation and
Recovery Act, as amended, and in the regulations adopted and publications
promulgated pursuant to each of the foregoing Acts. Subject to all of the
provisions of this Agreement (including, but not limited to, Section 39 of this
Agreement entitled "Force Majeure") the Port Authority through its employees,
agents, contractors, and subcontractors, and at its sole cost and expense, shall
if required by law remove or cause to be removed in accordance with all
applicable legal requirements from the premises (provided none of the same was
caused or introduced into the premises by the Lessee, its officers, directors,
partners, agents, members, employees, representatives and contractors) any
Hazardous Materials or shall take such remediation measures with respect thereto
as is required by law (provided none of same was caused or introduced into the
premises by the Lessee, its officers, directors, partners, agents, members,
employees, representatives and contractors) and shall remove or caused to be
removed from the premises any asbestos and asbestos containing material,
discovered or uncovered, whether by the Lessee, the Port Authority or by others,
in the course of performing construction or installation work in the premises or
at any time during the term of the letting, except for certain non-friable
asbestos which may remain within enclosed perimeter columns and in the enclosed
diagonal building walls in the four corners of the building in which the
premises is located, which remaining asbestos and asbestos containing materials
shall remain encased or enclosed and inaccessible and shall not be penetrated by
the Lessee. In addition to any other rights of entry reserved to the Port
Authority under this Agreement, the Port Authority reserves for itself, its
employees, agents, contractors, and subcontractors the right to enter the
premises subject to the provisions of Section 16 hereof entitled "Right of Entry
Reserved" at any time and from time to time in order to perform the asbestos and
Hazardous Materials removal work described in this paragraph, and, in the event
that such removal or remediation work (other than the removal of vinyl asbestos
tile) shall be performed in Area A or Area A-1 prior to the Rent Commencement
Date for that Area, the Lessee shall be entitled to a credit against its rental
obligations next becoming due in the amount of the daily basic rental for that
Area (as defined in paragraph (c) of the Section of this Agreement entitled
"Term") for each day in which the Lessee is unable to perform its construction
and installation work or to use the premises for the purposes set forth in the
Section of this Agreement entitled "Rights of User", as the case may be, by
reason of such removal or remediation. In performing such removal and
replacement work the Port Authority shall use reasonable efforts to minimize the
disruption to the Lessee's business and shall restore the premises in the manner
specified in paragraph (b) of the Section of this Agreement entitled "Rights of
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Entry Reserved" (including performance of such work other than during normal
business hours to the extent required pursuant to the provisions of paragraph
(l) of the said Section of this Agreement entitled "Rights of Entry Reserved").
The Lessee shall not knowingly do anything during the term of the letting of the
premises which may involve or affect any Hazardous Materials or any asbestos or
asbestos-containing materials which may be or may be found to be present in the
premises except in accordance with any law, rule, regulation, requirement, order
or direction of any governmental authority applicable thereto or which would be
applicable if the building of which the premises are a part were under private
ownership.
(d) The Port Authority covenants and warrants that, as of the
Lease Commencement Date, the portions of the premises and those portions of the
World Trade Center necessary for access to the premises from the streets
adjacent to the building in which such portions of the premises are located
shall comply with those provisions of the ADA applicable to the Port Authority,
except with respect to those portions of the World Trade Center and the premises
to be modified in the course of the performance of the Port Authority Work to
bring them into compliance with the ADA.
Section 47. Termination by the Lessee
(a) The Lessee shall have the right to terminate this
Agreement and the letting hereunder, as to the entire premises or, at the
election of the Lessee, as to each of Area A, Area A-1 or any contiguous block
of Additional Space consisting of more than fifty thousand (50,000) rentable
square feet, such termination to be effective solely on the day preceding the
tenth (10th) anniversary of the Lease Commencement Date, provided, that (1) the
Lessee shall have given to the Port Authority unconditional written notice of
its election so to terminate, received by the Port Authority not later than five
hundred forty-eight (548) days prior to such tenth (10th) anniversary of the
Lease Commencement Date and (2) such notice shall be accompanied by a certified
or cashier's check, payable to the Port Authority and drawn on a banking
institution having its main office within the Port of New York District, in an
amount equal to the sum of (i) in the event that the Lessee has elected to
terminate the letting of Area A, One Million Four Hundred Eighty-four Thousand
Ninety-five Dollars and No Cents ($1,484,095.00), plus (ii) in the event that
the Lessee has elected to terminate the letting of Area A-1, One Million Four
Hundred Seventy-nine Thousand Seven Hundred Dollars and No Cents
($1,479,700.00), plus (iii) in the event that the Lessee has elected to
terminate the letting of any Additional Space added to the premises pursuant to
the provisions of the Section of this Agreement entitled "Additional Space", for
each such Additional Space, an amount equal to the product of the number of
rentable square feet in such Additional Space multiplied by the dollar amount
set forth in the column headed "Termination Payment Per Rsf" on the schedule
attached hereto, hereby made a part hereof and marked "Schedule E" opposite the
number of months in the period commencing on the commencement of the letting of
such Additional Space and ending on such tenth (10th) anniversary (without
regard to whether the letting of such Area or Additional Space is terminated by
itself, together with other portions of the premises or as part of the entire
premises).
(b) No notice of termination served by the Lessee in
accordance with paragraph (a) of this Section shall be effective (and any such
given shall be deemed null and void) if (1) on the date of the giving of such
notice or on the intended effective date thereof, the Lessee is in default
(after the giving of any required notice and the expiration of any subsequent
period to cure such default specifically provided for in this Agreement) in the
payment of any amount of basic rent, additional basic rent or cleaning or
electricity charges, or if on the date of the giving of said notice the Lessee
has been served with a notice of termination of this Agreement by the Port
Authority or if on the date of the giving of said notice this Agreement is not
then in full force and effect or (2) the
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Lessee fails to pay the full amount required under subparagraph (2) of said
paragraph (a) under the circumstances described in such paragraph (2). If the
Port Authority has received any payment in connection with an ineffective notice
of termination, said payment may be retained by the Port Authority and applied
to any sums then owing to the Port Authority from the Lessee or, in the event
that such notice is ineffective by reason that the Lessee is in default of any
monetary obligation payable to the Port Authority, any sums which may become due
to the Port Authority under the provisions of the Lease entitled "Survival of
the Obligations of the Lessee", and any excess over the amount of such sums
shall be refunded to the Lessee, within thirty (30) days after demand therefor.
The Lessee shall have no right to terminate the letting as to a portion of the
premises nor on other than the specified effective date set forth above and, in
any case, shall only have a right to terminate the letting if the necessary
prior notice has been served in a timely manner.
(c) In the event of an effective notice of termination by the
Lessee under this Section, the letting under the Lease with respect to the
premises shall cease and expire on the effective date of termination as fully
and completely as if such date were the expiration date of the letting set forth
in this Agreement.
Section 48. Certain Obligations of the Port Authority
(a) Except for those obligations expressly assumed by the
Lessee under the provisions of this Agreement, the Port Authority, at its cost
and expense, will operate, clean, and maintain and make all necessary repairs
and replacements (both structural and non-structural) to the public portions and
common areas of the World Trade Center providing access to the premises, the
structural components of such Building, (by which is meant the exterior walls,
roof, columns, floor slabs (both above and below the premises) and other
structural Building supporting members) and to those systems and all parts
thereof providing services and utilities to the premises which the Port
Authority has expressly undertaken to supply to the Lessee pursuant to the
provisions of this Agreement, and will continue to operate and maintain the
Building and its life-safety systems in substantially the same manner and at the
level existing on the date of this Agreement. The Port Authority agrees to
comply with the substantive requirements of the life safety provisions of the
New York City Building Code (or to comply in a manner which in the Port
Authority's opinion is equivalent to compliance with such provisions of such
Code) to the following extent: (i) in the public and common areas of the
Building and in all other public and common areas of the World Trade Center (if
such life safety provisions affect systems or equipment in such other public
areas of the World Trade Center which service or otherwise impact on the
Building or such life safety provisions affect the Lessee's access to the
premises) (ii) in the non-office areas of the premises, and (iii) all
electrical, plumbing, HVAC and other systems in such Building affecting the
premises, provided, that nothing herein shall be construed to require the Port
Authority to make any improvements or perform any work in the office portions of
the Lessee's premises, except as otherwise specifically set forth in this
Agreement, and nothing herein shall be construed to relieve the Lessee of its
obligations to comply with the provisions of the Section of this Agreement
entitled "Governmental Requirements". Nothing in this Section shall be or be
deemed to be a recognition that said New York City Building Code is applicable
to the World Trade Center or to any other facilities owned or operated by the
Port Authority or that the Port Authority is required by any law, rule,
regulation, order or direction to conform to or comply with the New York City
Building Code. The Port Authority will maintain, operate and make all repairs
and replacements to the Building in compliance with the substantive provisions
of all laws, ordinances, enactments, resolutions, rules, regulations,
requirements, orders and directions with which the Lessee is not required to
comply by the provisions of the Section of this Agreement entitled "Governmental
Requirements" and lack of
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compliance with which would prevent the Lessee from operating in the premises in
the manner set forth in the Section of this Agreement entitled "Rights of User
by the Lessee" or adversely affect other than in an immaterial manner such
operations, but nothing in this Section is intended to modify the provisions of
paragraphs (h) and (i) of the Section of this Agreement entitled "Services and
Utilities" or the provisions of paragraph (c) of the Section of this Agreement
entitled "Force Majeure". The provisions of this Section shall not be deemed to
require the Port Authority to deliver additional services to the premises or to
deliver services at a higher level or to a greater degree or more stringent
specification than specifically provided in the Sections of this Agreement
entitled "Construction by the Lessee" and "Services and Utilities" and in
Schedule D attached to this Agreement.
(b) In the event that (1) the Port Authority shall fail to
perform any of its maintenance, repair or law compliance obligations set forth
in this Section or any such obligations which may be expressly set forth
elsewhere in this Agreement, (other than the obligations to maintain the public
areas of the Building, to make structural repairs to the exterior walls, floor
slab and structural building supporting members, to maintain the automatic
sprinkler system, fire alarm system, or other life safety systems forming a part
of such Building, or to maintain the electrical, plumbing, HVAC and other
systems in the Building), (2) the Lessee shall give the Port Authority specific
notice of such failure, and (3) the Port Authority shall not have performed such
obligation within thirty (30) days after the Port Authority's receipt of such
notice (except where performance of such obligation requires activity over a
period of time, and the Port Authority shall have commenced such performance
within thirty (30) days after the Port Authority's receipt of such notice and
continues diligently such performance without interruption except for causes
beyond its control), then, in such event, the Lessee may give to the Port
Authority notice that the Lessee intends to perform such obligation and in the
further event that the Port Authority shall not have performed such obligation
within ten (10) days after the Port Authority's receipt of such latter notice
(except where performance of such obligation requires activity over a period of
time, and the Port Authority shall have commenced such performance within ten
(10) days after the Port Authority's receipt of such latter notice and continues
diligently such performance without interruption except for causes beyond its
control), then, in such further event the Lessee may perform such obligation
itself and, within thirty (30) days of delivery to the Port Authority of
receipts, invoices, certificates or other evidence reasonably satisfactory to
the Port Authority evidencing the Lessee's reasonable out-of-pocket costs of
performance of such obligation, the Port Authority shall pay to the Lessee the
amount of such cost, such cost of the Lessee to be determined in accordance with
the provisions of paragraph (b) of the Section of this agreement entitled
"Additional Rent and Charges", together, in the event that the full amount of
such cost is not paid by the Port Authority on or before the thirtieth (30th)
day following such delivery, with interest on the unpaid portion of such cost at
the rate of nine per cent (9%) per annum for the period commencing on the
thirty-first (31st) day following such delivery and ending on the date of
payment thereof. Nothing in this paragraph is included or shall be deemed to
permit the Lessee to perform any work in connection with which the Lessee would
be required to file a construction application pursuant to the provisions of the
Section of this Agreement entitled "Construction by the Lessee" without
complying with the provisions of said Section.
(c) Subject to all of the provisions of the Section of this
Agreement entitled "Insurance" the Port Authority shall indemnify and hold
harmless the Lessee, its directors, officers, members, partners, employees,
representatives, contractors and agents from (and shall reimburse the Lessee for
the Lessee's reasonable out of pocket costs or expenses including reasonable out
of pocket legal expenses 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 (i) out of any default
of the Port Authority in performing or observing the obligations expressly
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undertaken by the Port Authority pursuant to the provisions of this Agreement or
(ii) out of any of the negligent acts or omissions or willful misconduct of the
Port Authority, its Commissioners, officers, agents, employees, representatives,
contractors, guests, invitees, and other persons who are doing business with the
Port Authority or who are on or at the premises at the express direction of the
Port Authority where such negligent acts or omissions or willful misconduct
occur on the premises or (iii) arising out of any negligent acts or omissions or
willful misconduct of the Port Authority, its Commissioners, officers, agents,
employees, contractors and representatives where such negligent acts or
omissions or willful misconduct are elsewhere at the World Trade Center. The
Port Authority 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). In the event that an action to recover amounts based upon any such
claim or demand is commenced against the Lessee, the Lessee will notify the Port
Authority of such commencement, as soon as practicable after the service on the
Lessee of the papers commencing such action, and shall promptly forward copies
of the papers commencing such action to the Port Authority. Nothing herein shall
be deemed to prohibit the Port Authority from selecting its own counsel or
utilizing counsel of the Port Authority's insurer in connection with the Port
Authority's defense of any suit based on any claim or demand set forth in this
paragraph (c) or be deemed to prohibit the Port Authority from settling any such
claim or demand so long as such settlement does not require any payment from the
Lessee or any other indemnified party. Nothing in the foregoing shall be
construed to require the Port Authority to indemnify the Lessee from claims and
demands of third persons to the extent such claims and demands arise from the
willful misconduct or negligent acts or omissions of the Lessee, its directors,
officers, agents, employees, corporations, representatives, guests, invitees and
other persons who are doing business with the Lessee. The provisions of this
paragraph (c) and the Port Authority's indemnification of the Lessee shall not
extend to or include claims or demands arising out of the acts or omissions of
the Port Authority acting in its governmental capacity with respect to (i) the
review of the Lessee's Construction Applications and the plans and
specifications attached thereto and any recommended actions or requirements made
in connection therewith or (ii) the inspection by the Port Authority of the work
performed by the Lessee pursuant thereto. Nothing set forth in this paragraph
(c) is intended or shall be deemed to alter the obligations of the Lessee and
the Port Authority with respect to damage to the property of the Lessee or of
the Port Authority in the event that the premises are damaged by a casualty,
which obligations shall be as provided in Section 9 of this Agreement entitled
"Casualty".
(d) The Port Authority shall provide to the Lessee ten (10)
non-reserved parking spaces (hereinafter sometimes called the "Parking Spaces")
in such locations in the World Trade Center parking garage as shall be
designated from time to time by the Port Authority. The Parking Spaces will be
provided to the Lessee for the period commencing on the Lease Commencement Date
and continuing throughout the term of the letting under this Agreement. The
Lessee agrees that the Parking Spaces will be used solely by the Lessee's
officers and employees, and that such use thereof shall be subject to and upon
all of the terms, provisions, and conditions contained in the form of parking
permit attached hereto, hereby made a part hereof and marked "Exhibit P"
(hereinafter sometimes called the "Permit") as the same may be hereafter
supplemented or amended or such other agreement with the Port Authority or other
operator of the World Trade Center parking garage as may from time to time be
substituted therefor. The Lessee agrees to pay the parking fees imposed by the
Port Authority or other operator of the World Trade Center parking garage as
such fees may be increased from time to time by the Port Authority or such other
operator. The Lessee upon prior written notification to the Port Authority from
time to time may reduce the number of parking spaces it is entitled to receive
hereunder and from and after the effective date set forth in any such
notification the Port Authority will no longer be obligated to provide the
Lessee with ten (10) parking spaces but will only be obligated to provide the
Lessee with such reduced number of parking
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spaces requested by the Lessee. Without otherwise limiting the provisions of the
Permit, the Lessee agrees that the Port Authority's right to terminate the
Permit without cause on thirty (30) days' notice as set forth in Section 1 of
the Terms and Conditions thereof shall be exercised only in the event that any
or all of the Parking Spaces are required by the Port Authority for reasons of
security, law compliance, construction or other reasonable purposes, and in such
event the Port Authority shall provide the Lessee with substitute parking spaces
in the World Trade Center parking garage. No Parking Spaces will be provided to
the Lessee until a Permit covering each of the Parking Spaces to be provided
hereunder is executed by the Lessee and the Port Authority and delivered to the
Lessee. The Port Authority shall execute and deliver such Permit(s) to the
Lessee within fifteen (15) business days after receipt of the same properly
executed by the Lessee. Without limiting any of the provisions of the Permit,
the Port Authority shall have no obligation to police the use of the Parking
Spaces or of the World Trade Center parking garage or to remove unauthorized
users therefrom and shall have no liability to the Lessee for failure to so
police or to remove unauthorized users therefrom. The Lessee acknowledges and
agrees that its use of the Parking Spaces shall continue only so long as the
World Trade Center parking garage continues in operation as a public parking
facility. Use of the World Trade Center parking garage by governmental entities
and/or its employees shall not constitute the parking garage a public parking
facility for purposes of this paragraph (d).
Section 49. Additional Provisions
(a) Neither the Lessee nor the Port Authority shall record
this Agreement. The Lessee may, at its sole cost and expense, record a
memorandum of this Agreement, prepared by it at its sole cost and expense,
reasonably satisfactory to the Port Authority, and the Port Authority agrees to
execute such memorandum within fifteen (15) business days after request
therefor. If the Lessee so records such memorandum, it shall, at its sole cost
and expense, record a memorandum reasonably satisfactory to the Port Authority
of each and every modification, extension, supplement, assignment, surrender, or
other amendatory agreement relating thereto, which memorandum shall be prepared
by and at the sole cost and expense of the Lessee, in a timely fashion.
(b) If any term, covenant, condition or provision of this
Agreement or the application thereof to any circumstance or to any person, firm
or corporation shall be invalid or unenforceable to any extent, the remaining
terms, covenants, conditions and provisions of this Agreement or the application
thereof to any circumstances or to any person, firm or corporation other than
those as to which any term, covenant, condition or provision is held invalid or
unenforceable, shall not be affected thereby and each remaining term, covenant,
condition and provision of this Agreement shall be valid and shall be
enforceable to the fullest extent permitted by law.
(c) Whenever this Agreement shall provide that the Port
Authority or Lessee shall pay the out-of-pocket costs of the other party, (1)
such out-of-pocket costs shall be commercially reasonable, (2) whenever a party
requests reimbursement for its out-of-pocket costs, upon request of the other
party, such party shall deliver to the requesting party bills, receipts,
invoices or other documentation reasonably evidencing such costs, and (3) in the
event such documentation is not so delivered within five (5) days after request
therefor, the time periods set forth herein with respect to any such payments
shall be tolled until five (5) days after delivery to the requesting party of
such documentation.
(d) With respect to any claim that either party to this
Agreement may assert against the other party pursuant to this Agreement and
subject to the proviso later occurring in this
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sentence, it is hereby agreed that neither party to this Agreement may assert a
claim against the other for consequential or special damages provided, however
that nothing herein shall be construed to prevent the Port Authority from
seeking indemnification from the Lessee pursuant to the Section of this
Agreement entitled "Indemnity" or pursuant to any other Section of this
Agreement, if applicable, or to prevent the Lessee from seeking indemnification
from the Port Authority pursuant to paragraph (c) of the Section of this
Agreement entitled "Certain Obligations of the Port Authority" or any other
Section of this Agreement, if applicable, from and against claims and demands of
unaffiliated third persons for consequential or special damages.
(e) In any instance where the provisions of this Agreement
specifically provide for resolution of disputes by arbitration, it is understood
that a determination by arbitration in any such instance shall be that
determination agreed upon by at least two (2) of the three arbitrators and if at
least two (2) arbitrators are unable to so agree then a determination by
arbitration shall be that determination made by the third arbitrator who was
mutually selected by the arbitrator selected by the Port Authority and the
arbitrator selected by the Lessee (or as selected in accordance with the then
existing rules of the American Arbitration Association).
Section 50. Security Deposit or Letter of Credit
(a) In the event that the Lessee shall be required to maintain
a security deposit in accordance with the provisions of subparagraph (5) of
paragraph (a) of the Section of this Agreement entitled "Termination", the
Lessee shall deposit with the Port Authority (and, except as otherwise provided
in this Section, shall keep deposited throughout the letting under this
Agreement) either the sum of One Million Five Hundred Fifty-seven Thousand Four
Hundred Fifty Dollars and No Cents ($1,557,450.00) 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 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 instruments 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 arising
out of any default by the Lessee (after the giving of any required notice
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and the expiration of any subsequent period to cure such default specifically
provided for in this Agreement) of its obligations under this Agreement . 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 arising out of
any default by the Lessee (after the giving of any required notice and the
expiration of any subsequent period to cure such default specifically provided
for in this Agreement) of its obligations under this Agreement, 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 prior to realizing the value of such security, but nothing in this
sentence shall be deemed to waive any notice expressly required by this
Agreement prior to a default becoming an event giving rise to a right to
terminate the letting under the Section of this Agreement entitled
"Termination". 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 above stated, 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. In the event the Lessee has deposited the sum set forth above,
or a letter of credit in lieu thereof pursuant to paragraph (b) of this Section,
with the Port Authority and during any consecutive two (2)-year period
thereafter the Lessee's net tangible assets have continuously had a value of
Sixty Million Dollars and No Cents ($60,000,000.00) or more, then the Port
Authority, within thirty (30) days after request by the Lessee, will return to
the Lessee its entire security deposit (or such letter of credit), or such
portion thereof remaining on deposit with the Port Authority, provided, the
Lessee is not then in default of any of its obligations under this Agreement
(after the giving of any required notice and the expiration of any subsequent
period to cure such default specifically provided for in this Agreement) and the
Lessee can demonstrate to the reasonable satisfaction of the Port Authority
(based upon financial statements certified by an independent certified public
accountant) that the value of the Lessee's net tangible assets did not fall
below Sixty Million Dollars and No Cents ($60,000,000.00) during such two
(2)-year period. 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 is or may hereafter be
entitled or authorized by law to retain or to charge in connection therewith,
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.
(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 Million Five Hundred
Fifty-seven Thousand Four Hundred Fifty Dollars and No Cents ($1,557,450.00).
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.
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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 during which the Lessee is required to maintain a security deposit 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 sum 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.
(d) For purposes of the provisions set forth in paragraph (a) above the Lessee
hereby certifies that its I.R.S. Employer Identification No. is ▇▇-▇▇▇▇▇▇▇.
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Section 51. Entire Agreement
This Agreement consists of the following: pages 1 through 127,
inclusive, plus Exhibits A, ▇-▇, ▇, ▇, ▇, ▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇, ▇-▇, ▇, ▇ and E.
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.
ATTEST: THE PORT AUTHORITY OF NEW YORK
AND NEW JERSEY
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/
-------------------------------- ---------------------------------
Assistant Secretary (Title) Director of Real Estate
----------------------------
(SEAL)
ATTEST: ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇
-------------------------------- ---------------------------------
Secretary Title Executive Vice-President
------------------------------
(CORPORATE SEAL)
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INDEX OF DEFINED TERMS
ADA...................................................................... 87
Additional Space......................................................... 82
Approved Contractor List................................................. 23
Area A-1 Rent Commencement Date.......................................... 5
Area A-1 Commencement Date............................................... 1
Area A Commencement Date................................................. 1
Area A Rent Commencement Date............................................ 5
Area..................................................................... 1
Attornment Agreement..................................................... 49
Availability Notice...................................................... 79
basic wage rate.......................................................... 80
basic wage rate.......................................................... 74
Bathroom Work............................................................ 36
Building................................................................. 64
Casualty Notice.......................................................... 16
Causes or conditions beyond the control.................................. 64
Chilled Water Agreement.................................................. 80
construction and installation work....................................... 21
consumption and demand................................................... 75
control.................................................................. 48
Cost..................................................................... 38
Cost Factor.............................................................. 25
daily basic rental for Area A............................................ 2
daily rate of additional basic rental per rentable square foot........... 25
daily rate of basic rental per rentable square foot...................... 25
daily basic rental for Area A-1.......................................... 2
Delay Period............................................................. 24
Engineers................................................................ 81
EPA...................................................................... 87
Estimate................................................................. 12
Existing Lease........................................................... 55
Expiration Date.......................................................... 1
fair market rental value................................................. 86
First Class Owners....................................................... 15
governmental............................................................. 7
governmental agency...................................................... 7
governmental authority................................................... 7
Hazardous Materials...................................................... 88
Lease Commencement Date.................................................. 1
Legal Requirements....................................................... 6
Lessee's cost............................................................ 34
Lessee's Finishing Work Allowance........................................ 33
Lessee's initial construction and installation work...................... 23
Materially Revised Estimate.............................................. 14
New Lessee............................................................... 50
New Lease................................................................ 50
Normal business hours.................................................... 64
Notice Period............................................................ 32
Outside Revised Estimate Date............................................ 14
overtime usage........................................................... 73
Owner.................................................................... 61
Parking Spaces........................................................... 92
PASNY.................................................................... 75
Permit................................................................... 92
Port Authority's Determination........................................... 85
premises................................................................. 1
private space............................................................ 61
Rent Commencement Date................................................... 5
Revised Estimate......................................................... 14
self insurer............................................................. 68
Statutes................................................................. 10
subleasing expenses...................................................... 47
Surrender Date........................................................... 55
surrendered premises..................................................... 55
Tenant Design Guide...................................................... 19
Thirty Day Period........................................................ 12
Threshold Amount......................................................... 68
utility, mechanical, electrical, communication and other systems......... 64
Wage rate................................................................ 74
Wage rate................................................................ 80
World Trade Center....................................................... 64
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) year 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, provided that such equipment,
device or capital improvement is then customarily required by insurance carriers
providing coverage for first class office buildings in the downtown area of
Manhattan containing one million or more rentable square feet (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 (and the amortization in respect of which for any Escalation Year shall
not exceed the amount by which the said premium was so reduced for any such
Escalation Year), (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 amortization in respect of which for
any Escalation Year shall not exceed the amount of actual savings for any such
Escalation Year) 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, elevator systems and other systems in
the Facility.
(c) "Base Operating Year" shall mean the calendar year 1999.
(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 reasonable 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
mean the World Trade Center as defined in paragraph (a) of Section 36 of the
Lease, except that there shall be excluded therefrom the following buildings
commonly known as Three World Trade Center (World Trade Center Marriott Hotel),
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 (other than subgrade office space) and all
retail space, which fraction may be expressed as a percentage. The Lessee and
the Port Authority agree that, as of the date hereof, the number of rentable
square feet in the Facility, exclusive of the subgrade space (other than
subgrade office space) and all retail space, is 10,173,368 rentable square feet.
Accordingly, the Lessee's Proportionate Share is nine thousand six hundred
thirteen ten thousandths of one percent (0.9613%), provided, that from and after
the Area A Rent Commencement Date and prior to the Area A-1 Rent Commencement
Date (as such terms are defined in the Lease) the Lessee's Proportionate Share
shall be four thousand eight hundred fifty-eight ten thousandths of one percent
(0.4858%), provided, further, that in the event that the Area A-1 Rent
Commencement Date shall precede the Area A Rent Commencement Date, the Lessee's
Proportionate Share shall be four thousand seven hundred fifty-five ten
thousandths of one percent (0.4755%) in the period commencing on the Area A-1
Rent Commencement Date and ending on the day preceding the Area A Rent
Commencement Date. 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 as set forth in the preceding sentence, 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 (other
than subgrade office space) and all retail space and except as provided in
subparagraph (c) of Paragraph 3 of this Schedule A. 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 (other than subgrade office space) or retail space in the
Facility.
(j) "Operating Expenses" shall mean the total of Amortized
Expenses and all other reasonable costs and expenses (and taxes thereon, if
any), without duplication, accrued to or by or incurred by or on behalf of the
Port Authority with respect to the operation, maintenance, repair, servicing,
cleaning and policing of the entire Facility, other than space used or intended
to be used exclusively for retail purposes and subgrade space used or intended
to be used for storage purposes, 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, subject to clauses (6) and (21) below, sewer and water
rents, rates and charges and annual management fees equal to four percent (4%)
of the total of basic rental, additional basic rental and other charges paid to
the Port Authority by Tenants of the Facility other than Tenants leasing or
occupying retail space
Page 2 of Schedule A
and non-office subgrade space (subject to the adjustment hereinafter provided
for in this paragraph (j)), provided, however, that Operating Expenses shall
exclude or have deducted, as appropriate:
(1) the compensation to executives, officers and other
personnel above the grade of building manager (consisting of labor
costs and fringe benefits and including without limitation thereto
wages, salaries, bonuses, administrative costs, payroll, social
security, unemployment and other similar taxes, disability benefits,
hospitalization and medical benefits, workers' compensation insurance,
pension, retirement or insurance plans and other similar benefits) and
if the Port Authority shall employ the services of any personnel below
the grade of building manager on a part-time basis or at the Facility
and at additional locations other than the Facility, then only a pro
rata allocation of any compensation (including the aforesaid labor
costs and fringe benefits) incurred on behalf of the Facility shall be
included in Operating Expenses;
(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 (or amounts which would have been received
by or reimbursed to the Port Authority through insurance proceeds if
the Port Authority had maintained insurance coverage with deductible
amounts customarily maintained by the owners of first class office
buildings in downtown Manhattan containing at least one million
rentable square feet of office space), 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 and amortization, 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 and any income, gains, estate,
inheritance, franchise, transfer, corporate, succession, gift, gross
receipts (other than sales and value added taxes imposed on items which
are included in Operating Expenses), capital stock, occupancy,
unincorporated business or mortgage tax payable by the Port Authority;
(6) the cost of hot and cold water, condenser water and other
utilities furnished to the premises or to any other space leased or
available for leasing to Tenants for which the Port Authority is
separately reimbursed by the Lessee or by such Tenants;
(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 or any part thereof or any interest of the Port Authority
therein;
(8) the cost of (including without limitation the cost of the
design or construction of) alterations, additions, changes or
decorations (including leasehold improvements) made specifically for
any Tenant of the Facility or made pursuant to the express provisions
of a Tenant's lease, license or occupancy agreement or in order to
prepare space in the Facility for occupancy by a new Tenant, including
without limitation thereto all
Page 3 of Schedule A
permit, license and inspection fees, if any, paid by the Port
Authority, or the amount of any allowance, credit or rent abatement
granted to a Tenant therefor;
(9) financing or refinancing costs, except as the same may be
included in Amortized Expenses;
(10) all costs incurred by reason of breach by a Tenant of its
lease for space in the Facility or of the willful or negligent acts or
omissions of any 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 luncheon, athletic or recreational
club;
(12) payments for rented equipment the cost of which would
constitute a capital expenditure under generally accepted accounting
principles as consistently applied by the Port Authority if the
equipment were purchased, except to the extent same would be included
in Amortized Expenses;
(13) any cost or expense allocable to retail space, including
without limitation, the cost of providing heating, ventilating, air
cooling, cleaning, plate glass insurance or other services to retail
space located in the Facility;
(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;
(15) brokerage, leasing and other commissions and fees paid in
order to procure Tenants and other tenant acquisition and inducement
costs such as lease assumption and takeover costs, moving allowances
and design costs;
(16) advertising, entertainment and promotional expenses
incurred for the purpose of marketing space in the Facility or
otherwise related to the Facility;
(17) the Port Authority's general corporate and general
administrative overhead expenses;
(18) legal fees; accounting fees except as specifically
provided below; all other professional and consulting fees, including
auditing, and arbitration fees and costs, incurred by the Port
Authority in connection with the negotiation, preparation and
administration of leases, licenses or other occupancy agreements and
amendments, terminations and extensions thereof, it being expressly
understood and agreed that the cost of such other professional and
consulting fees incurred in connection with the operation, maintenance,
repair, replacement, protection and improvement of the Facility shall
not be excluded by this subdivision (18) and professional and
consulting fees, including accounting, but excluding legal, incurred in
connection with the preparation of the Port Authority Statement and the
Tax Statement pursuant to this Schedule A and the corresponding
Statements referred to in Schedules contained in other Tenants leases
similar to this Schedule A, shall not be excluded by this subdivision
(18);
Page 4 of Schedule A
(19) ground rent and other amounts payable by the Port
Authority under any ground or underlying lease affecting the Facility;
(20) the cost of repairs, replacements or rebuilding incurred
by reason of the exercise of eminent domain to the extent reimbursed by
the condemning authority or incurred by reason of fire or other
insurable casualty regardless of whether the Port Authority has
maintained an insurance policy covering such risks or has maintained an
insurance policy with a deductible covering such risks, provided,
however, that to the extent the Port Authority self insures or
maintains a deductible amount for all or a portion of such cost then
there shall be included in Operating Expenses an imputed amount which
the Port Authority would have incurred for insurance premiums had it
elected to purchase insurance to cover such risks and not self insure
or purchase insurance with a deductible (provided such insurance is in
an amount and type customarily maintained by owners of first class
office buildings in downtown Manhattan containing at least one million
(1,000,000) rentable square feet and provided, further that in no event
shall the amount included under this clause (20) because of the
maintenance of the deductible amount exceed the amount of such
deductible amount);
(21) expenses incurred in connection with services or other
benefits of a type (i) that are not provided to Tenant at its premises
but that are provided to another tenant or occupant of the Facility at
its premises, (ii) that are provided to Tenant at its premises at a
reasonable or additional charge but that are provided to another tenant
at its premises without charge;
(22) any management or similar fees paid to the operator of
any parking garage located in the Facility and the compensation
(including the labor costs and fringe benefits referred to in
subdivision (1) of this subparagraph) paid to personnel of the Port
Authority engaged in the operation of any other consumer concession
selling to the general public at the Facility;
(23) any costs incurred by the Port Authority representing an
amount paid to an entity or person related to the Port Authority which
is in excess of the amount which would have been paid to such entity or
person in the absence of such relationship;
(24) the cost of any business interruption or rent insurance
purchased by the Port Authority with respect to the Facility;
(25) the cost of the acquisition, leasing, insuring,
restoring, installation, removing or replacing of any artwork,
including without limitation thereto, any statues or paintings, located
within or outside the Facility except for the cost of routine
maintenance of such objects existing in the public areas in the
Facility on the date hereof;
(26) costs incurred in connection with the creation of a
mortgage or lease superior to the Lease or in connection with the sale
of the Facility, the land on which it is located or any portion thereof
or any interest therein or in any person or entity of whatever tier
owning an interest therein, including without limitation thereto
survey, appraisal, engineering, inspection and legal fees and
disbursements incurred in connection therewith;
Page 5 of Schedule A
(27) (i) costs incurred in curing or fines and penalties
incurred by the Port Authority resulting from a violation or other
default by the Port Authority, its Commissioners, officers, employees,
agents, representatives, contractors, guests, invitees or other persons
doing business with the Port Authority of the terms and conditions of
any lease (including without limitation thereto the Lease), any
agreement of record applicable to the Facility or any portion thereof,
or (ii) the portion of costs incurred by the Port Authority by reason
of the negligence or willful misconduct of the Port Authority, its
Commissioners, officers, employees, agents, representatives,
contractors, guests, invitees or other persons doing business with the
Port Authority, including all costs incurred in connection with any
arbitration or court proceeding to the extent such costs are
attributable to the violation, default, negligence or willful
misconduct of the Port Authority or such persons, provided, however,
that the cost of maintaining liability insurance covering all or a
portion of such costs shall be includible in operating expenses to the
extent such insurance is in an amount and type customarily maintained
by owners of first class office buildings in downtown Manhattan
containing at least one million (1,000,000) rentable square feet and,
provided, further, that to the extent the Port Authority self insures
or maintains a deductible amount for all or a portion of such costs
then there shall be included in Operating Expenses an imputed amount
which the Port Authority would have incurred for insurance premiums had
it elected to purchase insurance covering such risks and not self
insure or purchase insurance with a deductible; provided, that such
insurance is in an amount and type customarily maintained by owners of
first class office buildings in downtown Manhattan containing at least
one million (1,000,000) rentable square feet, but in no event shall the
amount included under this clause (27) because of the maintenance of
the deductible amount exceed the amount of such deductible amount;
(28) penalties, late charges or interest incurred by the Port
Authority for late payment by the Port Authority of its obligations to
third parties;
(29) the cost of electricity furnished directly to the
premises or to any other space leased or available to lease to Tenants;
(30) real estate association dues;
(31) expenditures for repairing and/or replacing any work
defectively performed by Port Authority pursuant to the provisions of
the Lease;
(32) costs incurred to remedy violations of legal requirements
in effect on the date of the Lease that arise by reason of the Port
Authority's failure to construct, maintain or operate the Facility or
any part thereof in compliance with such legal requirements (excluding
the costs of permits and approvals required to comply with legal
requirements in the ordinary course of the operation, maintenance,
repair, replacement, protection, improvement and management of the
Facility);
(33) costs incurred in connection with constructing any
additional buildings at the Facility, any additions to the Facility or
adding additional stories on any building of the Facility or the cost
of constructing buildings or other structures adjoining but off the
Facility, or the cost of connecting the Facility to other structures
adjoining but off the Facility;
Page 6 of Schedule A
(34) costs incurred in connection with the acquisition or sale
of air rights, transferable development rights, easements or other
similar Facility interests;
(35) costs of any insurance coverage that is not then
customary for first-class office Buildings in downtown Manhattan and
any increased insurance costs to the extent reimbursed directly to the
Port Authority by a tenant, including, without limitation, Tenant,
pursuant to their respective leases regardless of whether the Port
Authority has maintained an insurance policy covering such risks;
(36) costs incurred by Port Authority which result from Port
Authority's breach of a lease or Port Authority's tortious or negligent
conduct;
(37) the cost of repairs or replacements or restorations by
reason of fire or other insurable casualty or condemnation;
(38) costs and expenses incurred by Port Authority in
connection with any obligation of Port Authority to indemnify any
Facility tenant (including Tenant) pursuant to its lease or otherwise;
(39) the cost paid or incurred in connection with the removal,
replacement, enclosure, encapsulation or other treatment (collectively
the "remediation cost") of any Hazardous Materials, defined as such as
of the date of this Agreement, in the Facility, other than the cost of
customary office cleaning materials and supplies used and stored in
compliance with all applicable legal requirements, provided, that such
Hazardous Materials were not introduced at the Facility by the Tenant
or any one acting on its behalf and provided further that the
remediation cost with respect to Hazardous Materials which are first
defined as such subsequent to the date of this Agreement shall be
included in operating costs hereunder and to the extent required
hereunder shall be treated as amortized expenses; and
(40) costs (including, without limitation, any taxes or
assessments) of any revenue generating signs or non-building standard
tenant signs;
(41) any bad debt loss, rent loss or reserves for bad debts or
rent loss;
(42) to the extent any costs includable in operating expenses
are incurred with respect to both the Facility and other properties
there shall be excluded from Operating Expenses a fair and reasonable
percentage thereof which is properly allocable to such other
properties;
(43) charitable contributions and civic donations;
(44) the cost of temporary exhibitions located at or within or
outside the Facility;
(45) costs incurred in connection with the operation of
offices not located at the Facility;
(46) costs relating to withdrawal liability or unfunded
pension liability under the Multi-employer Pension Act or similar law;
Page 7 of Schedule A
(47) costs to insure property of other tenants at the Facility
to the extent Tenant is required to insure same under its lease
agreement.
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 that during any portion of the Base Operating
Year and/or during any portion of any Escalation Year less than one hundred
percent (100%) of the rentable square feet of office space at the Facility,
including subgrade space used as office space, is occupied then with respect to
determining Operating Expenses for such Base Operating Year and/or Escalation
Year, as the case may be, the management fee component thereof shall be four
percent (4%) of the amount obtained by adding together (x) the total of the
basic rental, additional basic rental and other charges paid to the Port
Authority by Tenants of the Facility, other than Tenants leasing or occupying
retail space and non-office subgrade space, in the Base Operating Year or the
Escalation Year, as the case may be, and (y) the product obtained by multiplying
the amount in the preceding clause (x) by a percentage, such percentage to be
the difference between one hundred percent (100%) and the percentage on average
of the occupied rentable square feet of office space at the Facility, including
subgrade space used as office space, during the Base Operating Year and/or
Escalation Year, as the case may be. In the event the Port Authority "grosses
up" any item as provided in the preceding sentences, the Estimate Statement and
Port Authority Statement (as herein defined) shall include the "grossed-up"
figures, separately stating those amounts which have been so increased.
Operating Expenses shall be computed in accordance with generally accepted
accounting principles as consistently applied by the Port Authority from one
year to the next throughout the term of the letting under the Lease. In making
such computation, no cost or expense shall be included more than once in
Operating Expenses, whether fitting under more than one category provided for in
this subparagraph (j) or otherwise, nor shall any cost or expense be excluded or
deducted from Operating Expenses more than once, whether by reason of its
falling under more than one of the categories set forth in this subparagraph (j)
or otherwise, nor shall any cost or expense be deducted from Operating Expenses
which was not included therein. In no event shall the Port Authority collect for
any Escalation Year more than 100% of the actual costs and expenses incurred or
accrued by the Port Authority for such Escalation Year.
(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 Assistant Comptroller, World Trade Finance, and
accompanied by a statement of Operating Expenses for the Facility from which the
computations of Operating Expenses and additional basic rental set forth in such
Port Authority Statement were made.
Page 8 of Schedule A
(m) "Rentable Square Feet in the Premises" shall be deemed to
mean 97,799 square feet, and shall be deemed to consist of 49,421 square feet as
shown on Exhibit A and 48,378 square feet as shown on Exhibit A-1, provided,
that from and after the Area A Rent Commencement Date and prior to the Area A-1
Rent Commencement Date such term shall be deemed to mean 49,421 square feet,
provided, further, that in the event that the Area A-1 Rent Commencement Date
shall precede the Area A Rent Commencement Date, such term shall be deemed to
mean 48,378 square feet in the period commencing on the Area A-1 Rent
Commencement Date and ending on the day preceding the Area A Rent Commencement
Date. In the event that the number of rentable square feet in the premises is
changed as a result of a partial termination or extension of the letting under
the Lease pursuant to the express provisions thereof, upon the effectiveness of
such partial termination or extension the number of Rentable Square Feet in the
Premises shall be equal to those in the space constituting the premises
subsequent thereto, as provided in the Lease.
(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, 1998. "Tax Base" for any Additional Space, as such term is defined in the
Lease, shall be determined as provided in the Lease.
(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.
Upon written request from the Lessee, the Port Authority will provide the Lessee
with additional information reasonably detailing the computation of the
additional basic rental payable under Paragraph 2 of this Schedule.
(q) "Taxes" shall mean real estate taxes and assessments
(exclusive of penalties and interest thereon) 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 Facility 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. Anything contained herein to the contrary notwithstanding,
Taxes shall not be deemed to include (i) any taxes on Port Authority's, Lessor's
or Mortgagee's income, (ii) any corporation, unincorporated business or
franchise taxes, (iii) any estate gift, succession or inheritance taxes, (iv)
any capital gains, mortgage recording or transfer taxes, (v) any taxes or
assessments attributable to any sign attached to or located on the Facility (vi)
any occupancy taxes which are or may be required to be paid by Port Authority by
reason of Port Authority's tenancy in the Facility. If by law, any assessment
that is included in Taxes pursuant to the terms hereof may be divided and paid
in installments, then, for the purposes of this Schedule, (1) such assessment
shall be deemed to have been so divided and to be payable in the maximum number
of installments permitted by Law (together with any interest charged by the
applicable governmental authority), and (2) there shall be deemed included in
Taxes for each calendar year the installments of such assessment deemed to be
payable during such calendar year.
Page 9 of Schedule A
(r) "Tenants" shall mean all lessees, permittees, licensees
and all other Port Authority-approved users and occupiers of space in the
Facility, including without limitation thereto the Lessee.
2. From and after each July 1 following the earlier of the Area A Rent
Commencement Date or the Area A-1 Rent Commencement Date, 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 Year 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 each such 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 Assistant Comptroller, World Trade Finance, 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) In the event a portion of the Facility is sold which
portion does not include the Lessee's premises, then from and after the
effective date of such sale, (1) the 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 portion of the Facility (as originally defined) retained by the Port
Authority, exclusive of the subgrade space (other than subgrade office space)
and all retail space, 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, (2) Operating Expenses for the Base Operating Year shall be
adjusted (the "Adjusted Operating Expenses") which shall mean the Operating
Expenses for the Base Operating Year multiplied by a fraction, the numerator of
which shall be the number of rentable square feet in the portion of the Facility
(as originally defined) retained by the Port Authority exclusive of the subgrade
space (other than subgrade office space) and retail space, if any, measured on a
consistent basis with the manner in which the number of Rentable Square Feet in
the Premises have been measured for the purposes of this Schedule, and the
denominator of which shall be 10,173,368, (3) "Facility" shall mean the portion
of the Facility (as originally defined) retained by the Port Authority, and (4)
the Lessee shall pay additional basic rental to the Port Authority pursuant to
this Paragraph 3 of this Schedule which shall be equal to the Lessee's
Proportionate Share of the amount, if any, by which the Operating Expenses for
the portion of the Facility retained by the Port Authority for such Escalation
Year exceeds the Adjusted Operating Expenses for the Base Operating Year. In the
event such sale should occur on other than the last day of an Escalation Year,
additional basic rental payable pursuant to this Paragraph 3 of this Schedule
shall be individually determined for the portion of the Escalation Year prior to
such sale and for the portion thereof subsequent to such sale.
Page 10 of Schedule A
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 (the Lessee to
pay the Port Authority within thirty (30) days after demand therefor the amount
of any underpayments, the Port Authority to grant the Lessee a credit, as
hereinafter provided in the next sentence, in the amount of any overpayments),
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 (the Lessee to pay the
Port Authority within thirty (30) days of demand therefor the amount of any
underpayments, the Port Authority to grant the Lessee a credit, as hereinafter
provided in the next sentence in the amount of any overpayment) subject to the
provisions of Paragraph 3 above. In the event that as a result of a retroactive
adjustment pursuant to the preceding sentence the Lessee is entitled to a
credit, the Lessee shall be entitled to receive an additional credit against its
ensuing installments of basic rental and additional basic rental equal to the
amount of the overpayment referred to in the preceding sentence, and if the sum
of such payments shall have exceeded the amount which is ultimately determined
to be payable by more than three percent (3%) for the period in question, the
Lessee shall be entitled to an additional credit in an amount determined by
applying the Applicable Rate to the amount of each payment calculated from the
date each such payment was actually made by the Lessee until the Lessee receives
such credit or payment as provided below. 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 Lessee shall be entitled to receive a credit
against its ensuing installments of basic rental and additional basic rental
equal to such excess amount, and if the sum of such payments shall have exceeded
the amount which is ultimately determined to be payable by more than three
percent (3%) for the said Escalation Year in question, the Lessee shall also be
entitled to an additional credit in an amount determined by applying the
Applicable Rate to the amount of each payment calculated from the date each such
payment was actually made by the Lessee until the Lessee receives such credit or
payment as provided below. If with respect to any credit referred to in this
Paragraph 4 there would still be an excess amount after application of the
credit against the first installment of rental then owing, then the balance of
such excess after application of such credit shall be paid to the Lessee within
thirty (30) days after delivery of such Port Authority Statement and provided
further that in the event that such adjustment shall occur after the expiration
or termination of the term of the letting under the Lease, as it may be extended
from time to time, or, at the time of such expiration or termination, any amount
of such credit shall not have been so applied against the Lessee's rental
obligations and the Lessee's other obligations owing to the Port Authority under
the Lease are less than the amount of such excess or such remaining credit, as
the case may be, then the Port Authority shall pay such excess or such remaining
credit, as the case may be, less the amount of the Lessee's other obligations
under the Lease, if any, to the Lessee within thirty (30) days after such
expiration or termination.
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 Tax Statement, Estimate Statement or Port
Page 11 of Schedule A
Authority Statement, as the case may be, for any Tax or 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 Tax Statement, Estimate Statement 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 Tax
Statement, 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 thirty (30) 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 Tax Statement and the Port Authority
Statement for any Tax Year or Escalation Year (as such Tax Statement and Port
Authority Statement may be revised pursuant to Paragraph 8 of this Schedule)
shall exceed the additional basic rental actually paid pursuant to this
Paragraph 5 for that Tax Year or Escalation Year, as the case may be, then the
Lessee shall pay such excess within thirty (30) days after delivery of such Tax
Statement and Port Authority Statement, and if the amounts of such additional
basic rental actually paid by the Lessee during such Tax Year or Escalation Year
exceed the annual amounts set forth in such Tax Statement and Port Authority
Statement (as such Tax Statement and Port Authority Statement may be revised
pursuant to Paragraph 8 of this Schedule) as payable pursuant to Paragraphs 2
and 3 of this Schedule, the Lessee shall be entitled to a credit in such excess
amount against its rental obligations next falling due under the Lease and this
Schedule A, and if the sum of such payments shall have exceeded the amount which
is ultimately determined to be payable by more than three percent (3%) for the
said Escalation Year in question, the Lessee shall also be entitled to a credit
in an amount determined by applying the Applicable Rate to the amount of each
monthly overpayment calculated from the date each such monthly installment was
actually made by the Lessee until the Lessee receives such credit or payment as
provided below, provided, that if there would still be an excess amount after
application of such credit against the first installment of rental then owing,
then the balance of such excess after application of such credit shall be paid
to the Lessee within thirty (30) days after delivery of such Port Authority
Statement or Tax Statement, as the case may be, and provided further that in the
event that such determination shall occur after the expiration or termination of
the term of the letting under the Lease, as it may be extended from time to
time, or, at the time of such expiration or termination, any amount of such
credit shall not have been so applied against the Lessee's rental obligations
and the Lessee's other obligations owing to the Port Authority under the Lease
are less than the amount of such excess or such remaining credit, as the case
may be, then the Port Authority shall pay such excess or such remaining credit,
as the case may be, less the amount of the Lessee's other obligations under the
Lease, if any, to the Lessee within thirty (30) days after such expiration or
termination.
6. (a) 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,
subject to the provisions of the last sentence of subparagraph (c) of this
paragraph 6, 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 within thirty (30) days after demand
therefor 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 ▇▇▇▇
▇▇▇▇ 12 of Schedule A
grant the Lessee a credit equal to the excess of the amounts of additional basic
rental theretofore actually paid over the additional basic rental as recomputed
for that period, such credit to be applied against its rental obligations next
falling due under the Lease and this Schedule A, provided, that in the event
that such recomputation shall occur after the expiration or termination of the
term of the letting under the Lease, as it may be extended from time to time,
or, at the time of such expiration or termination, any amount of such credit
shall not have been so applied against the Lessee's rental obligations and the
Lessee's other obligations owing to the Port Authority under the Lease are less
than the amount of such excess or such remaining credit, as the case may be,
then the Port Authority shall pay such excess or such remaining credit, as the
case may be, less the amount of the Lessee's other obligations under the Lease,
if any, to the Lessee within thirty (30) days after such expiration or
termination.
(b) 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.
(c) Notwithstanding the provisions of subparagraphs (a) and
(b) of this Paragraph 6, except as provided in this subparagraph (c), 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 or reduce 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 (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 but the Port Authority shall credit (or
refund, as provided in this Schedule A) to the Lessee any amount which the
Lessee 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 (but not more than twice during any Escalation Year) 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).
7. If any Escalation Year begins prior to the earlier of the Area A
Rent Commencement Date or the Area A-1 Rent Commencement Date 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
Page 13 of Schedule A
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 numerator of which (a) in the case
of the Escalation Year in which such earlier Rent Commencement Date shall fall,
shall be the number of days in the period commencing on such earlier Rent
Commencement Date and ending on the last day of the Escalation Year in which
such Rent Commencement Date shall fall, or (b) in the case of the Escalation
Year in which the date of such expiration or termination shall fall, in the
period commencing on the first day of the Escalation Year in which such date
shall fall and ending on the date of such expiration or termination, and the
denominator of which shall be the total number of days in such Escalation Year.
In the event that the Lessee's Proportionate Share shall be adjusted during any
Escalation Year, as expressly provided in this Schedule, the additional basic
rental under Paragraph 3 of this Schedule with respect to such Escalation Year
shall be the sum of (1) the product obtained by multiplying the additional basic
rental determined under said Paragraph 3 using the Lessee's Proportionate Share
in effect prior to the date of such adjustment for the entire Escalation Year,
by a fraction the numerator of which shall be the number of days in the period
commencing on the first day of the Escalation Year in which the date of such
adjustment shall fall and ending on such date and the denominator of which shall
be the total number of days in such Escalation Year, plus (2) the product
obtained by multiplying the additional basic rental determined under said
Paragraph 3 using the Lessee's Proportionate Share in effect subsequent to the
date of such adjustment for the entire Escalation Year, by a fraction the
numerator of which shall be the number of days in the period commencing on the
date of such adjustment and ending on the last day of the Escalation Year in
which such date shall fall and the denominator of which shall be the total
number of days in such Escalation Year; in the event that the Rentable Square
Feet in the Premises shall be adjusted during any Tax Year, as expressly
provided in this Schedule, the additional basic rental under Paragraph 2 of this
Schedule with respect to such Tax Year shall be determined in the same manner.
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 thirty (30) 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 within thirty (30) 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 the 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 or corrected Port Authority Statement
sent to the Lessee shall be conclusively binding upon the Lessee unless, within
twenty-four (24) months after such
Page 14 of Schedule A
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 reasonable
information with respect to such Statement, the Port Authority will make
reasonable efforts to furnish such information and such twenty-four (24) month
period referred to in the immediately preceding sentence shall be extended for a
period equivalent to the time period from the date the Port Authority receives
such request to thirty (30) days from the date the Port Authority furnishes such
additional information to the Lessee. The Port Authority shall maintain books
and records of account pertaining to the Operating Expenses for each Escalation
Year in accordance with generally accepted accounting principles as consistently
applied by the Port Authority for a period of four (4) years following the end
of each Escalation Year at the Port Authority's office set forth in the Lease.
If such notice objecting to an item or items in the Port Authority Statement is
sent within such twenty-four (24) month period (as such may be extended as
provided above), the Lessee (together with its accountants, agents, employees
and representatives) during normal business hours upon reasonable notice may
examine and copy the Port Authority's books and records relating to the
Operating Expenses set forth in said Statement (but not books and records
pertaining to the composition of the management fees or management expenses of
the Port Authority) 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, subject to obligations to disclose pursuant to
law or court order. If after such examination, the Lessee still disputes such
Port Authority Statement or corrected Port Authority Statement, either party may
request arbitration with respect thereto. 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. Each
arbitrator shall be a certified public accountant with at least ten (10) years
experience in commercial real estate accounting with respect to first class
office buildings containing at lease one million (1,000,000) rentable square
feet in the Borough of Manhattan. The arbitration shall be pursuant to the then
rules of the American Arbitration Association or any successor organization
(expedited procedures). 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.
/s/
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For the Port Authority
/s/
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For the Lessee
Page 15 of Schedule A