Exhibit 10.1


 


JETBLUE AIRWAYS CORPORATION


LEASE AYD-265


 


Table of Contents


 


	
  Section
  1.

  	
  Letting

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section
  2.

  	
  Construction
  by the Lessee

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section
  3.

  	
  Term
  and Additional Right of Termination

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section
  4.

  	
  Rental

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section
  5.

  	
  Use of
  Premises

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section
  6.

  	
  Compliance
  with Governmental Requirements

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section
  7.

  	
  Rules
  and Regulations

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section
  8.

  	
  Various
  Obligations of the Lessee

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section
  9.

  	
  Prohibited
  Acts

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section
  10.

  	
  Care,
  Maintenance, Rebuilding and Repair by the Lessee

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section
  11.

  	
  Insurance

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section
  12.

  	
  Damage
  to or Destruction of the Terminal

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section
  13.

  	
  Indemnity
  and Liability Insurance

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section
  14.

  	
  Signs

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section
  15.

  	
  Obstruction
  Lights

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section
  16.

  	
  Additional
  Rent and Charges

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section
  17.

  	
  Rights
  of Entry Reserved

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section
  18.

  	
  Condemnation

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section
  19.

  	
  Assignment
  and Sublease

  	
  50

  



 


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  Section
  20.

  	
  Termination
  by the Port Authority

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section
  21.

  	
  Rights
  of Re-entry

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section
  22.

  	
  Waiver
  of Redemption

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section
  23.

  	
  Survival
  of the Obligations of the Lessee

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section
  24.

  	
  Reletting
  by the Port Authority

  	
  56

  
	
   

  	
   

  	
   

  
	
  Section
  25.

  	
  Remedies
  to be Non-Exclusive

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section
  26.

  	
  Surrender

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section
  27.

  	
  Acceptance
  of Surrender of Lease

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section
  28.

  	
  Effect
  of Basic Lease

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section
  29.

  	
  Removal
  of Property

  	
  58

  
	
   

  	
   

  	
   

  
	
  Section
  30.

  	
  Brokerage

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section
  31.

  	
  Limitation
  of Rights and Privileges Granted

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section
  32.

  	
  Notices

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section
  33.

  	
  Other
  Construction by the Lessee

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section
  34.

  	
  Place
  of Payments

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section
  35.

  	
  Construction
  and Application of Terms

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section
  36.

  	
  Non-liability
  of Individuals

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section
  37.

  	
  Abatement

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section
  38.

  	
  Services
  to the Lessee

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section
  39.

  	
  Hot
  Water and Chilled Water Requirements

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section
  40.

  	
  General
  Airport Agreement

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section
  41.

  	
  Federal
  Airport Aid

  	
  69

  
	
   

  	
   

  	
   

  
	
  Section
  42.

  	
  Requesting
  Airlines at the Airport

  	
  69

  



 


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  Section
  43.

  	
  Additional
  Rights of the Port Authority a to Portions of the Premises

  	
  70

  
	
   

  	
   

  	
   

  
	
  Section
  44.

  	
  Force
  Majeure

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section
  45.

  	
  Ingress
  and Egress

  	
  74

  
	
   

  	
   

  	
   

  
	
  Section
  46.

  	
  Restrictions
  on Use of Passenger Terminal Frontage Roadways – Use of Airport Taxi
  Dispatchers and Roadways Frontage Management

  	
  75

  
	
   

  	
   

  	
   

  
	
  Section
  47.

  	
  Maintenance
  Employees

  	
  77

  
	
   

  	
   

  	
   

  
	
  Section
  48.

  	
  Quiet
  Enjoyment

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section
  49.

  	
  Lessee’s
  Financial Condition – Limitation of Term Lease – Triggering Events

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section
  50.

  	
  This
  Section has Been Intentionally Left Blank

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section
  51.

  	
  This
  Section has Been Intentionally Left Blank

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section
  52.

  	
  Purchase
  of Property

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section
  53.

  	
  Assumption
  of Maintenance and Repair of the Terminal by the Port Authority

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section
  54.

  	
  Joint
  Periodic Condition Survey

  	
  87

  
	
   

  	
   

  	
   

  
	
  Section
  55.

  	
  Condition
  of the Terminal

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section
  56.

  	
  Environmental
  Obligations

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section
  57.

  	
  Late
  Charges

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section
  58.

  	
  Future
  Airport Transportation Facilities and Operations Use of Portions of the
  Terminal

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section
  59.

  	
  Club
  Rooms

  	
  102

  
	
   

  	
   

  	
   

  
	
  Section
  60.

  	
  Lessee’s
  Service Standards

  	
  103

  



 


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  Section
  61.

  	
  Storage
  Tanks

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section
  62.

  	
  Non-Discrimination

  	
  106

  
	
   

  	
   

  	
   

  
	
  Section
  63.

  	
  Affirmative
  Action

  	
  107

  
	
   

  	
   

  	
   

  
	
  Section
  64.

  	
  The
  Lessee’s Ongoing Affirmative Action, Equal Opportunity And Local Business
  Enterprises Commitment

  	
  108

  
	
   

  	
   

  	
   

  
	
  Section
  65.

  	
  Books
  and Records

  	
  110

  
	
   

  	
   

  	
   

  
	
  Section
  66.

  	
  Ground
  Transportation Services

  	
  113

  
	
   

  	
   

  	
   

  
	
  Section
  67.

  	
  Ground
  Transportation

  	
  114

  
	
   

  	
   

  	
   

  
	
  Section
  68.

  	
  Ground
  Transportation Within the Central Terminal Area

  	
  117

  
	
   

  	
   

  	
   

  
	
  Section
  69.

  	
  Helicopter
  Operations

  	
  123

  
	
   

  	
   

  	
   

  
	
  Section
  70.

  	
  Itinerant
  Aircraft

  	
  124

  
	
   

  	
   

  	
   

  
	
  Section
  71.

  	
  Observation
  Deck

  	
  124

  
	
   

  	
   

  	
   

  
	
  Section
  72.

  	
  In-Flight
  Meals

  	
  124

  
	
   

  	
   

  	
   

  
	
  Section
  73.

  	
  Consumer
  Services

  	
  127

  
	
   

  	
   

  	
   

  
	
  Section
  74.

  	
  Restaurant
  and Bar

  	
  138

  
	
   

  	
   

  	
   

  
	
  Section
  75.

  	
  Vending
  Machines, Public Telephones, Advertising Displays

  	
  139

  
	
   

  	
   

  	
   

  
	
  Section
  76.

  	
  Insurance
  Covering Air Transportation

  	
  139

  
	
   

  	
   

  	
   

  
	
  Section
  77.

  	
  Newsstands

  	
  141

  
	
   

  	
   

  	
   

  
	
  Section
  78.

  	
  Foreign
  Currency Exchange

  	
  142

  
	
   

  	
   

  	
   

  
	
  Section
  79.

  	
  Retail
  Banking

  	
  142

  
	
   

  	
   

  	
   

  
	
  Section
  80.

  	
  Other
  Consumer Services

  	
  143

  
	
   

  	
   

  	
   

  
	
  Section
  81.

  	
  Subletting
  of the Premises for Consumer Services

  	
  144

  
	
   

  	
   

  	
   

  
	
  Section
  82.

  	
  Obligations
  in Connection with Consumer Services Agreements

  	
  145

  



 


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  Section
  83.

  	
  Use
  of Additional Gates by other Airlines

  	
  146

  
	
   

  	
   

  	
   

  
	
  Section
  84.

  	
  Definitions

  	
  147

  
	
   

  	
   

  	
   

  
	
  Section
  85.

  	
  Entire
  Agreement

  	
  161

  



 


v

















 


THIS AGREEMENT SHALL NOT BE BINDING UPON

THE PORT AUTHORITY UNTIL DULY EXECUTED BY

AN EXECUTIVE OFFICER THEREOF AND DELIVERED

TO THE LESSEE BY AN AUTHORIZED

REPRESENTATIVE OF THE PORT AUTHORITY


 


Port Authority Lease No. AYD-265


 


AGREEMENT OF LEASE


 


THIS AGREEMENT OF LEASE, made as of the 1st day of November, 2002
(which date is hereinafter called the “Effective Date”) by and between THE PORT
AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called the “Port Authority”),
a body corporate and politic, established 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 225 Park Avenue South, in the Borough of
Manhattan, City, County and State of New York, and JETBLUE AIRWAYS CORPORATION
(hereinafter called the “Lessee”), a corporation of the State of Delaware with
an office and place of business at 118-29 Queens Boulevard, Forest Hills, New
York 11375, whose representative is George Sauer.


 


WITNESSETH, That:


 


The Port Authority and the Lessee, for and in consideration of the
rents, covenants and mutual agreements hereinafter contained, hereby covenant
and agree as follows:


 


Section
1.              Letting


 


(a)           The
Port Authority hereby lets to the Lessee and the Lessee hereby hires and takes
from the Port Authority at John F. Kennedy International Airport (sometimes
hereinafter referred to as the “Airport”) in the County of Queens, City and
State of New York the land shown in stipple, stippled cross hatching and
stippled diagonal hatching on the drawing attached hereto, hereby made a part
hereof and marked “Exhibit 1.1”, together with, except for Gate No. 1 and Gate
No. 3 as defined in paragraph (g) of this Section, all buildings, structures,
fixtures, improvements and other property of the Port Authority, if any,
located therein, thereon or thereunder, and all structures, improvements,
additions, buildings and facilities located, constructed or installed, or to be
located, constructed or installed therein, thereon or thereunder, all of the
foregoing (except for Gate No. 1 and Gate No. 3) being hereinafter collectively
referred to as the “Premises”.  The
parties acknowledge that the Premises constitute non-residential real property.


 

















 


(b)           Except
to the extent required for the performance of any of the obligations of the
Lessee hereunder nothing contained in this Agreement shall grant to the Lessee
any rights whatsoever in the air space above the Premises in excess of the
height elevation limitations described in the exhibit attached hereto, hereby
made a part hereof and marked “Exhibit 1.2”.


 


(c)           The
Port Authority has not made and continues not to make any representation as to
title to any of the trade fixtures or other property in the Terminal including,
without limitation, passenger loading bridges and baggage conveyor systems and
carrousels, or as to the right of the Lessee to possess or use the same.  Use or possession thereof by the Lessee
shall be at the risk of the Lessee and the Lessee shall indemnify and save
harmless the Port Authority from any claim or liability arising as a result of
such use or possession. The obligations of the Lessee and the rights and
discretion of the Port Authority under the Lease shall not be diminished or
otherwise affected by reason of any such claim whatsoever or the result of any
prosecution thereof by any claimant.


 


(d)           Subject
only to the appropriate written concurrence of the lessees, tenants, occupants
or users as set forth below in this paragraph (d), the strips of land shown in
stippled crosshatching and in stippled diagonal hatching on Exhibit 1.1 and
lying along and within the easterly and westerly boundary lines of the
Terminal, together with the corresponding contiguous strips of land shown in
crosshatch and in diagonal hatch on Exhibit 1.1 and lying along and outside
such parts of the Terminal (which strips of land shown in crosshatch and in
diagonal hatch on Exhibit 1.1 are hereinafter called the “Off-Terminal Easement
Areas”) shall be subject to a joint and mutual easement for a taxiway to be
used jointly on one hand, subject to Section 45 hereof entitled “Ingress and
Egress”, by the Lessee and the lessees, tenants, occupants and users, who
pursuant to Port Authority permission, may occupy or use the Terminal and on
the other hand by the lessees, tenants, occupants and users who, pursuant to
Port Authority permission, may now or in the future lease, rent, occupy or use
any of the Off-Terminal Easement Areas, and such rights of easement for such
taxiway purposes shall continue during the effective periods of the respective
agreements or grants of permission covering or which may cover the same.


 


(e)           It
is specifically acknowledged and agreed that the Lessee shall conduct the
activities listed in Section 5 hereof only on the Premises and on no other
portion of the Terminal, and further that the Lessee’s obligations to maintain
and repair the Premises as more fully described in Section 10 shall apply to
the Terminal in its entirety.


 


(f)            Without
limiting or impairing any right or remedy of the Port Authority, the Lessee
hereby represents to the Port Authority that the Lessee immediately prior to
the Effective Date of this Lease was in possession and use of portions of the
Premises as a permittee of the Port Authority under that certain permit issued
by the Port Authority to the Lessee bearing Port Authority Agreement No.
AYD-210 and dated as of December 1, 2001 (which permit, as the same may have
been supplemented and 


 


2

















 


extended, is hereinafter called
the “Prior Permit”) and, further, immediately prior to December 1, 2001 that
the Lessee was in possession and use of portions of the Premises as a licensee
of United pursuant to a subuse agreement entered into between the Lessee and
United (which subuse agreement with United is hereinafter called the “Subuse
Agreement”).  Further, without limiting
paragraph (d) of this Section, Sections 55 or 56 of this Lease or any other
term or provision of this Lease, it is hereby recognized that the Lessee,
effective as of the Effective Date, shall, in accordance with and subject to
the terms and conditions of this Lease, have the right to use and occupy the
Premises, and shall use and occupy the Premises, solely as the Lessee under
this Lease, and that the Prior Permit and the Subuse Agreement have both
terminated.  Without limiting any other
term or provision of this Lease, neither the termination of the Prior Permit or
the Subuse Agreement have released or relieved the Lessee of any of its
obligations, duties and liabilities with respect to matters arising or accruing
on or prior to Effective Date in connection with the Prior Permit or the Subuse
Agreement.  Further, neither this Lease
nor anything contained herein nor said termination of the Prior Permit and the
Subuse Agreement shall or shall be deemed to impair, limit or reduce the obligations
of the Lessee or any other person, entity or party, including without
limitation, the obligation to indemnify and hold the Port Authority harmless,
nor shall either such termination release or relieve the Lessee from any of
such obligations.  Neither this Lease
nor anything contained herein shall be deemed to grant to the Lessee or to any
other party or person or entity any rights or claims, legal or equitable,
against the Port Authority under the Prior Permit or the Subuse Agreement.  The Lessee acknowledges and agrees that,
effective on the Effective Date, it does not and shall not have any rights to
use or occupy the Premises other than under, pursuant and subject to, and as
set forth in, this Lease.


 


(g)           (1)           Effective as of the
date that the Lessee shall first use that portion of the Terminal shown in
stippled shading on the exhibit attached hereto, hereby made a part hereof and
marked “Exhibit 1.3” and identified as Gate # 1 (which portion of the Terminal
is hereinafter referred to as “Gate No. 1” and the date that the Lessee shall first
use Gate No. 1 is hereinafter referred to as the “Gate No. 1 Commencement
Date”), the Port Authority shall let to the Lessee and the Lessee shall hire
and take from the Port Authority at the Airport in the County of Queens, City
and State of New York Gate No. 1, together with all buildings, structures,
fixtures, improvements and other property of the Port Authority, if any,
located therein, thereon or thereunder, and all structures, improvements,
additions, buildings and facilities located, constructed or installed, or to be
located, constructed or installed therein, thereon or thereunder (all of the
foregoing being hereinafter collectively referred to as the “Gate No. 1
Premises”), to be and to become a part of the Premises let to the Lessee under
the Lease effective on the Gate No. 1 Commencement Date, subject to and in
accordance with all of the terms, provisions, covenants and conditions of the
Lease, for and during the balance of the term of the letting under the Lease,
unless sooner terminated.  The parties
acknowledge that the Gate No. 1 Premises constitute non-residential real
property.


 


(2)           Effective
as of the date that the Lessee shall first use that portion of the Terminal
shown in stippled shading on Exhibit 1.3 and identified as Gate # 3 (which
portion of the Terminal is hereinafter referred to as “Gate No. 3” and the date


 


3

















 


that the Lessee shall first use Gate No. 3 is hereinafter referred to
as the “Gate No. 3 Commencement Date”), the Port Authority shall let to the
Lessee and the Lessee shall hire and take from the Port Authority at the
Airport in the County of Queens, City and State of New York Gate No. 3,
together with all buildings, structures, fixtures, improvements and other
property of the Port Authority, if any, located therein, thereon or thereunder,
and all structures, improvements, additions, buildings and facilities located,
constructed or installed, or to be located, constructed or installed therein,
thereon or thereunder (all of the foregoing being hereinafter collectively
referred to as the “Gate No. 3 Premises” and Gate No. 1 and Gate No. 3 being
hereinafter collectively called the “Additional Gates”), to be and to become a
part of the Premises let to the Lessee under the Lease effective on the Gate
No. 3 Commencement Date, subject to and in accordance with all of the terms,
provisions, covenants and conditions of the Lease, for and during the balance
of the term of the letting under the Lease, unless sooner terminated.  The parties acknowledge that the Gate No. 3
Premises constitute non-residential real property.


 


(3)           The
Lessee shall accept each of the Additional Gates in its “as is” condition and
the Port Authority shall not have any responsibility for any work or
installation to the Additional Gates to make the same usable by the Lessee, to
place them in any particular condition or to reimburse the Lessee for any work
or installation as may be made by or on behalf of the Lessee, the Lessee having
exclusive responsibility therefore.  The
Lessee hereby acknowledges that it has not relied upon any representation or
statement of the Port Authority or its Commissioners, officers, employees or
agents as to the condition of the Additional Gates.  The Lessee, prior to any of the Additional Gates becoming a part
of the Premises hereunder, shall thoroughly examine such Additional Gate and
determine that it is suitable for the Lessee’s operations under the Lease.


 


(4)           In
the event one or more Persons other than the Lessee shall be using Gate No. 1
on the Gate No. 1 Commencement Date or shall be using Gate No. 3 on the Gate
No. 3 Commencement Date, the Lessee hereby agrees to take the Additional Gates,
or any portion thereof, as encumbered by the occupancy and use of such Persons.


 


(h)           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 or improper for the conduct of the
Lessee’s operations hereunder so that there is possibility of injury or damage
to life or property.  It is hereby
understood and agreed that whenever reference is made in this Agreement to the
condition of the Premises as of the commencement of the term thereof, the same
shall be deemed to mean the condition of the Premises as of the Effective Date,
and as to the improvements made and the alternation work performed during the
term of this Agreement, in the condition existing after the completion of the
same.


 


4

















 


 


Section
2.              Construction by
the Lessee


 


(a)           The
Lessee’s Investment


 


The Lessee shall perform work to improve the Terminal, which work shall
be performed during the Investment Period and shall have a cost (as determined
and set forth in the definition of the Cost of the Construction Work in Section
4 hereof entitled “Rental”) of not less that Four Million Dollars and No Cents
($4,000,000.00). The work the Lessee proposes to perform includes but is not
limited to the design and installation of new ticket counters, ticket counter
conveyor systems, baggage make-up and an oversize baggage conveyor system,
jet-bridge refurbishment, asbestos abatement and upgrading the building
lighting systems (the foregoing specified work which is performed during the
Investment Period is hereinafter referred to as the “Improvement Work”).  The Improvement Work and any other work
which improves the Terminal, is performed during the Investment Period and is
approved by the Port Authority in accordance with this Section 2 and is
constructed by the Lessee on the Terminal (and off the Terminal where required)
is sometimes herein collectively referred to as the “Construction Work.”  The Lessee agrees that the performance of
the design and construction of the Construction Work shall be at the Lessee’s
sole cost and expense and shall be subject to and performed in accordance with
all the terms, provisions and conditions of this Lease.


 


(b)           Plans
and Specifications and Construction Work Record Keeping


 


(1)           Prior
to the commencement of any portion of the Construction Work, the Lessee shall
submit to the Port Authority for the Port Authority’s approval a construction
application or applications in the form supplied by the Port Authority setting
forth the work the Lessee desires to perform (which construction application(s)
as submitted by the Lessee but not approved by the Port Authority are
hereinafter individually called a “Pending Construction Application” and
collectively called the “Pending Construction Applications”).  The Pending Construction Applications shall
contain such terms and conditions as the Port Authority shall include and shall
set forth in detail and by complete plans and specifications the work the
Lessee desires to perform and the manner and time periods for performing the
same and all other supporting information that the Port Authority shall require
(the foregoing construction applications as approved by the Port Authority are
hereinafter individually called a “Construction Application” and collectively
called the “Construction Applications”).


 


(2)           The
Lessee shall be responsible at its sole cost and expense for retaining all
architectural, engineering and other consultants and services as may be
directed by the Port Authority and for developing, completing and submitting
the plans and specifications for the proposed work.  The plans and specifications to be submitted by the Lessee to the
Port Authority shall bear the seal of a qualified architect or professional
engineer licensed to practice in the State of New York and shall be in
sufficient detail for a contractor to perform the work.  If the Lessee desires to proceed with the
proposed work, the Lessee shall redo and resubmit each Pending Construction
Application until approved by the Port Authority.  The Lessee shall not commence performance of any work until the
Construction Application therefor is approved by the Port Authority. Upon
approval of a Pending Construction Application by the Port


 


5

















 


Authority, the Lessee shall proceed diligently at it sole cost and
expense to perform the Construction Work covered by the Construction
Application.


 


(3)           The
Lessee shall assure that the costs and contracts for the work covered by a
Construction Application are separate and distinguishable from the work
performed or to be performed at the Terminal under any other Construction
Application, including without limitation, that each contract for work
performed under any Construction Application contain an allocation of costs for
all work performed during the Investment Period and an allocation of costs for
each Construction Application, provided, however, that if any contract covering
the Construction Work does not properly allocate said costs, the Port Authority
shall determine the costs thereof that are applicable to the Cost of the
Construction Work, or any portion thereof. 
In addition, the Books and Records of the Lessee shall be kept so that
Port Authority can verify which work under any Construction Application
approved by the Port Authority was performed by the Lessee at the Terminal
during the Investment Period and the Costs of the Construction Work for each
such Construction Application.


 


(c)           Performance
of the Construction Work


 


All the Construction Work shall be done in accordance with the
following terms and conditions:


 


(1)           (i)            The Lessee hereby
assumes the risk of loss or damage to all of the Construction Work prior to the
completion thereof and the risk of loss or damage to all property of the Port
Authority and others and the risk of personal injury and death to all Persons
arising out of or in connection with the performance of the Construction Work
including without limitation for all Environmental Requirements and
Environmental Damages.  In the event of
such loss or damage, the Lessee shall forthwith repair, replace and make good
the Construction Work and the property of the Port Authority without cost or
expense to the Port Authority.  The
Lessee shall itself and shall also require its contractors to indemnify and
hold harmless the Port Authority, its Commissioners, officers, agents and
employees from and against all claims and demands, just or unjust, of third Persons
(including employees, officers, and agents of the Port Authority) arising or
alleged to arise out of the performance of the Construction Work and for all
expenses incurred by it and by them in the defense, settlement or satisfaction
thereof, including without limitation thereto, claims and demands for death,
for personal injury or for property damage, direct or consequential, all the
foregoing to include without limitation all claims and demands arising out of
or in connection with any Hazardous Substance and whether they arise from the
acts or omissions of the Lessee, of any contractors of the Lessee, of the Port
Authority, or of third Persons, or from acts of God or of the public enemy, or
otherwise (including claims of the City of New York against the Port Authority
pursuant to the provisions of the Basic Lease whereby the Port Authority has
agreed to indemnify the City against claims), excepting only claims and demands
which result solely from affirmative willful acts done by the Port Authority, its
Commissioners, officers, agents and employees with respect to the Construction
Work, provided, however, that the Lessee shall not be required to indemnify the
Port Authority


 


6

















 


where indemnity would be precluded pursuant to the provisions of
Section 5-322.1 of the General Obligations Law of the State of New York.


 


(ii)           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 defense it shall not, without obtaining
express advance written 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.


 


(2)           (i)            Prior to engaging or
retaining an architect or architects for the Construction Work, the name or
names of said architect or architects shall be submitted to the Port Authority
for its approval.  The Port Authority shall
have the right to disapprove any architect who may be unacceptable to it.  All the Construction Work shall be done in
accordance with the Construction Application covering the work and the final
plans and specifications approved by the Port Authority.  All the Construction Work, including workmanship
and materials, shall be of first class quality.  The Lessee shall redo, replace or construct at its own cost and
expense, any Construction Work not done in accordance with the approved plans
and specifications, the terms, provisions and conditions of this Lease or any
further requirements of the Port Authority.


 


(ii)           The
Lessee agrees to expend not less than Four Million Dollars and No Cents
($4,000,000.00) on the Cost of the Construction Work and shall complete the
Construction Work no later than November 30, 2004.


 


(3)           (i)            Prior to entering into
a contract for any part of the Construction Work, the Lessee shall submit to
the Port Authority for its approval the names of the contractors to whom the
Lessee proposes to award said contracts. 
The Port Authority shall have the right to disapprove any contractor who
may be unacceptable to it.  The Lessee
shall include in all such contracts such provisions and conditions as may be
reasonably required by the Port Authority. 
Without limiting the generality of the foregoing all of the Lessee’s
construction contracts shall provide as follows:  “If (i) the Contractor fails to perform any of his obligations
under the Contract, including his obligation to the Lessee to pay any claims
lawfully made against him by any materialman, subcontractor or workman or other
third Person which arises out of or in connection with the performance of the
Contract or (ii) any claim (just or unjust) which arises out of or in
connection with the Contract is made against the Lessee or (iii) any
subcontractor under the Contract fails to pay any claims lawfully made against
him by any materialman, subcontractor, workman or other third Persons which
arise out of or in connection with the Contract or if in the Lessee’s opinion
any of the aforesaid contingencies is likely to arise, then the Lessee shall
have the right, in its discretion, to withhold out of any payment (final or
otherwise and even though such payments have already been certified as due)
such sums as the Lessee may deem amply to protect it against delay or loss or
to assume the payment of just claims of third Persons, and to


 


7

















 


apply such sums in such manner as the Lessee may deem proper to secure
such protection or satisfy such claims. 
All sums so applied shall be deducted from the Contractor’s
compensation.  Omission by the Lessee to
withhold out of any payment, final or otherwise, a sum for any of the above
contingencies, even though such contingency has occurred at the time of such
payment, shall not be deemed to indicate that the Lessee does not intend to
exercise its right with respect to such contingency.  Neither the above provisions for rights of the Lessee to withhold
and apply monies nor any exercise, or attempted exercise of, or omission to
exercise such rights by the Lessee shall create any obligation of any kind to
such materialmen, subcontractors, workmen or other third Persons.  Until actual payment is made to the Contractor,
his right to any amount to be paid under the Contract (even though such amount
has already been certified as due) shall be subordinate to the rights of the
Lessee under this provision.”


 


(ii)           The
Lessee shall file with the Port Authority a copy of its contracts with its
contractors prior to the start of the Construction Work.


 


(4)           The
Lessee shall furnish or require its architect to furnish a full time resident
engineer during the construction period. 
The Lessee shall require certification by a licensed engineer of all
pile driving data and of all controlled concrete work and such other
certifications as may be requested by the Port Authority from time to time. The
Lessee shall submit all certifications and logs to the Port Authority’s
Resident Engineer.


 


(5)           The
Lessee agrees to be solely responsible for any plans and specifications used by
it and for any loss or damages resulting from the use thereof, notwithstanding
the same have been approved by the Port Authority and notwithstanding the
incorporation therein of Port Authority recommendations or requirements.  Notwithstanding the requirement for approval
by the Port Authority of the contracts to be entered into by the Lessee or the
incorporation therein of Port Authority requirements or recommendations, and
notwithstanding any rights the Port Authority may have reserved to itself
hereunder, the Port Authority shall have no liabilities or obligations of any
kind to any contractors engaged by the Lessee or for any other matter in
connection therewith and the Lessee hereby releases and discharges the Port
Authority, its Commissioners, officers, representatives and employees of and
from any and all liability, claims for damages or losses of any kind, whether
legal or equitable, or from any action or cause of action arising or alleged to
arise out of the performance of any of the Construction Work pursuant to the
contracts between the Lessee and its contractors.  Any warranties contained in any construction contract entered
into by the Lessee for the performance of the Construction Work hereunder shall
be for the benefit of the Port Authority as well as the Lessee, and the
contract shall so provide.


 


(6)           The
Port Authority shall have the right, through its duly designated
representatives, to inspect the Construction Work and the plans and specifications
thereof, at any and all reasonable times during the progress thereof and from
time to time, in its discretion, to take samples and perform testing in any
part of the Construction Work.


 


8

















 


(7)           The
Lessee agrees that it shall deliver to the Port Authority two (2) sets of “as
built”drawings of the Construction Work on an electronic CADD data file on a CD
Rom in a format to be designated by the Port Authority, all of which shall
conform to the specifications of the Port Authority (the receipt of a copy of
said specifications prior to the Effective Date being hereby acknowledged by
the Lessee) , and all engineering reports, engineering analysis, boring logs,
survey information and engineering design calculations and operation and
maintenance manuals in a comprehensive, coordinated package.  The Lessee shall, during the term of the
Lease, keep said digital electronic files of drawings and said electronic CADD
data files current showing thereon any changes or modifications which may be
made.  (No changes or modifications
shall be made without prior Port Authority consent.)


 


(8)           The
Lessee shall, if requested by the Port Authority, take all reasonable measures
to prevent erosion of the soil and the blowing of sand during the performance
of the Construction Work, including but not limited to the fencing of the
Terminal or portions thereof or other areas and the covering of open areas with
asphaltic emulsion or similar materials as the Port Authority may direct.


 


(9)           (i)            Without limiting the
generality of any other term or condition of this Lease, title to any soil,
dirt, sand, asbestos or other material on the Terminal or the Airport removed
or excavated by the Lessee during the course of the Construction Work (all the
foregoing being hereinafter called the “Removed Material”) and not used at the
Terminal shall vest in the Lessee upon the removal or excavation thereof and
all such Removed Material shall be delivered and deposited by the Lessee at the
Lessee’s sole cost and expense to a location off the Airport in accordance with
the terms and conditions of this Lease, including without limitation this
Section 2 and all applicable Environmental Requirements (including, if
required, disposal of asbestos in a long-term disposal facility at the Lessee’s
sole cost and expense) and all in a manner satisfactory to the Port
Authority.  The entire proceeds, if any,
of the sale or other disposition of the Removed Material shall belong to the
Lessee.


 


(ii)           Promptly
upon final disposition of any Hazardous Substance from the Terminal or the
Airport in the performance of the Construction Work,  the Lessee shall submit to the Port Authority a “Certification of
Final Disposal” stating the type and amount of material disposed, the method of
disposal and the owner and location of the disposal facility.  The format of such certification shall
follow the requirements, if any, of governmental agencies having jurisdiction
as if the Port Authority were a private organization and the name of the Port
Authority shall not appear on any certificate or other document as a generator
or owner of such material.


 


(iii)          In
the event any Hazardous Substance is discovered in the performance of the
Construction Work, the Lessee in reporting such Hazardous Substance shall
direct such report to the attention of such individual at the subject
governmental authority as the General Manager of the Airport shall require in
order to assure consistency in the environmental management of the Airport.


 


9

















 


(10)         The
Lessee shall pay or cause to be paid all claims lawfully made against it by its
contractors, subcontractors, materialmen and workmen, and all claims lawfully
made against it by other third Persons arising out of or in connection with or
because of the performance of the Construction Work, and shall cause its
contractors and subcontractors to pay all such claims lawfully made against
them, provided, however, that nothing herein contained shall be construed to
limit the right of the Lessee to contest any claim of a contractor,
subcontractor, materialman, workman and/or other Person and no such claim shall
be considered to be an obligation of the Lessee within the meaning of this
Section unless and until the same shall have been finally adjudicated.  The Lessee shall use its best efforts to
resolve any such claims and shall keep the Port Authority fully informed of its
actions with respect thereto.  Nothing
herein contained shall be deemed to constitute consent to the creation of any
liens or claims against the Construction Work, the Terminal or any other area
of the Airport nor create any rights in said third Persons against the Port
Authority.


 


(11)         (i)            The Lessee in its own
name as insured and including the Port Authority as an additional insured,
including without limitation for both premises-operations and completed
operations, shall procure and maintain Commercial General Liability Insurance,
including but not limited to property damage liability, premises-operations,
products liability, broad form property damage, completed operations for a
minimum of three years after the Construction Work Completion Date, explosion,
collapse and underground property damages, personal injury (including death)
and independent contractors in not less than the minimum limit set forth below,
and with a contractual liability endorsement covering the obligations assumed
by the Lessee pursuant to subparagraphs (1) and (5) of this paragraph (c) and
the obligations required of the Lessee’s contractors pursuant to subparagraph
(1) of this paragraph (c), and Commercial Automobile Liability Insurance
covering owned, non-owned and hired vehicles and automatically covering newly
acquired vehicles in not less that the minimum limit set forth below, and such
other insurance as the Port Authority may require in connection with the
performance of the Construction Work. 
The Lessee may provide such insurance by requiring each contractor
engaged by it for the Construction Work to procure and maintain such insurance
including such contractual liability endorsement, said insurance, whether
procured by the Lessee or by a contractor engaged by it as aforesaid, not to
contain any care, custody or control exclusions, and not to contain any
exclusion for bodily injury to or sickness, disease or death of any employee of
the Lessee or of any of its contractors which would conflict with or in any way
impair coverage under the contractual liability endorsement.  The said policy or policies of insurance
shall also provide or contain an endorsement providing that the protections
afforded the Lessee thereunder with respect to any claim or action against the
Lessee by a third Person shall pertain and apply with like effect with respect
to any claim or action against the Lessee by the Port Authority, and shall also
provide or contain an endorsement providing that the protections afforded the
Port Authority thereunder with respect to any claim or action against the Port
Authority by the Lessee shall be the same as the protections afforded the
Lessee thereunder with respect to any claim or action against the Lessee by a
third Person as if the Port Authority were the named insured thereunder, but
such provision or


 


10

















 


endorsement shall not limit, vary or affect the protections afforded
the Port Authority thereunder as an additional insured.  In addition, each of the said policy or
policies of insurance shall be endorsed to state they are primary in relation
to any insurance carried or maintained by the Port Authority, including without
limitation, any self-insurance, regardless of type.  All the foregoing insurance requirements shall be in addition to
all policies of insurance otherwise required by the Lease.





 


 


	
   

  	
   

  	
  Minimum
  Limits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commercial General Liability  Combined single limit per

  occurrence for death, bodily injury

  and property damage liability:

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commercial Automobile Liability

  (covering owned, non-owned and hired vehicles) Combined single limit per
  occurrence

  or death, bodily injury and property

  damage liability:

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  



 


(ii)           Without
limiting the provisions hereof, in the event the Lessee maintains the foregoing
insurance in limits greater than aforesaid, the Port Authority shall be included
therein as an additional insured to the full extent of all such insurance in
accordance with all the terms and provisions hereof.


 


(iii)          The
Lessee shall also procure and maintain in effect, or cause to be procured and
maintained in effect, Workers’ Compensation Insurance and Employer’s Liability
Insurance in accordance with and as required by law and including coverage for
asbestos exposure.


 


(iv)          The
insurance required hereunder in this subparagraph (1l) shall be maintained in
effect during the performance of the Construction Work and a certified copy of
each of the policies or a certificate or certificates evidencing the existence
thereof, or binders, shall be delivered to the Port Authority at least fifteen
(l5) days prior to the commencement of the Construction Work or any portion
thereof.  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.  Each such
copy, certificate and binder shall bear the endorsement of or be accompanied by
evidence of payment of the premium thereof and, also, contain a valid provision
or endorsement that the policy may not be canceled, terminated, changed or
modified without giving thirty (30) days’ written advance notice thereof to the
Port Authority and the City of New York. 
Each such copy and each such certificate with respect to the insurance
required under this subparagraph (l1) shall contain an additional endorsement
providing that the insurance


 


11

















 


carrier 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.  Any renewal policy or certificate shall be
delivered to the Port Authority prior to the expiration of each expiring
policy.  The aforesaid policies of
insurance shall be written by a company or companies approved by the Port
Authority, the Port Authority agreeing not to withhold its approval
unreasonably.  If at any time any of the
insurance policies shall be or become unsatisfactory to the Port Authority as
to form, substance or insurance limits or if any of the carriers issuing such
policies shall be or become unsatisfactory to the Port Authority, the Lessee
shall promptly obtain a new and satisfactory policy in replacement, the Port
Authority agreeing not to act unreasonably hereunder.  If the Port Authority at any time so requests, a certified copy
of each of the policies shall be delivered to the Port Authority.


 


(12)         (i)            The Lessee shall
procure and maintain Builder’s Risk (All Risk) Completed Value Insurance
covering the Construction Work during the performance thereof including
material delivered to the Terminal or the construction site but not attached to
the realty.  Such insurance shall be in
compliance with and subject to the applicable provisions of Section 11 of the
Lease entitled “Insurance” and shall name the Port Authority, the City of New
York and the Lessee and its contractors and subcontractors as insureds as their
interests may appear and such policy shall provide that the loss shall be
adjusted with and payable to the Lessee. 
Such proceeds shall be used by the Lessee for the repair, replacement or
rebuilding of the Construction Work and any excess shall be paid over to the
Port Authority.  The policies or
certificates representing insurance covered by this subparagraph (12) shall be
delivered by the Lessee to the Port Authority at least thirty (30) days prior
to the commencement of construction of the Construction Work or any portion
thereof, and each policy or certificate delivered shall bear the endorsement of
or be accompanied by evidence of payment of the premium thereof and also
contain a valid provision obligating the insurance company to furnish the Port
Authority and the City of New York thirty (30) days’ advance notice of the
cancellation, termination, change or modification of the insurance evidenced by
said policy or certificate.  Renewal
policies or certificates shall be delivered to the Port Authority at least
thirty (30) days before the expiration of the insurance which such policies are
to renew.


 


(ii)           The
insurance covered by this subparagraph (12) shall be written by companies
approved by the Port Authority, the Port Authority covenanting and agreeing not
to withhold its approval unreasonably. 
If at any time any of the insurance policies shall be or become
unsatisfactory to the Port Authority as to the form or substance or if any of
the carriers issuing such policies shall be or become unsatisfactory to the
Port Authority, the Lessee shall promptly obtain a new and satisfactory policy
in replacement, the Port Authority covenanting and agreeing not to act
unreasonably hereunder.  If at any time
the Port Authority so requests, a certified copy of each of the said policies
shall be delivered to the Port Authority.


 


12

















 


(13)         The
Lessee shall be under no obligation to reimburse the Port Authority for
expenses incurred by the Port Authority in connection with its normal review
and approval of the original plans and specifications submitted by the Lessee
pursuant to this Section.  The Lessee
however agrees to pay to the Port Authority upon its demand the expenses
incurred by the Port Authority in connection with any additional review for
approval of any changes, modifications or revisions of the original plans and
specifications which may be proposed by the Lessee for the Port Authority’s
approval.  The expenses of the Port
Authority for any such additional review and approval shall be computed on the
basis of direct payroll time expended in connection therewith plus 100.  Wherever in this Lease reference is made to
“direct payroll time”, costs computed thereunder shall include a pro-rata share
of the cost to the Port Authority of providing employee benefits, including,
but not limited to, pensions, hospitalization, medical and life insurance,
vacations and holidays.   Such
computations shall be in accordance with the Port Authority’s accounting
principles as consistently applied prior to the Effective Date.


 


(14)         The
Lessee shall prior to the commencement of construction of the Construction Work
and at all times during such construction submit to the Port Authority all
engineering studies and environmental test results with respect to the
Construction Work and samples of construction materials as may be required at
any time and from time to time by the Port Authority.


 


(15)         The
Lessee shall at the time of submitting its Construction Application(s) to the
Port Authority as provided in paragraph (b) hereof submit to the Port Authority
its forecasts of the number of people who will be working at various times
during the term of the Lease at the Terminal, the expected utility demands of
the Terminal, noise profiles and such other information as the Port Authority
may require.  The Lessee shall continue
to submit its latest forecasts and such other information as may be required as
aforesaid as the Port Authority shall from time to time and at any time
request.


 


(16)         The
Lessee shall comply with all the terms and provisions of each approved
Construction Application.  In the event
of any inconsistency between the terms of any Construction Application and the
terms of this Lease, the terms of this Lease shall prevail and control.  No approval nor anything contained in any
approval granted by the Port Authority in connection with the Construction Work
shall constitute a determination or indication by the Port Authority that the
Lessee has complied with the applicable governmental laws, ordinances,
enactments, resolutions, rules and orders, including but not limited those of
the City of New York, which may pertain to the work to be performed.


 


(17)         Nothing
contained in this Lease shall grant or be deemed to grant any contractor,
architect, supplier, subcontractor or any other Person engaged by the Lessee or
any of its contractors in the performance of any part of the Construction Work
any right of action or claim against the Port Authority, its Commissioners,
officers,


 


13

















 


agents and employees with respect to any work any of them may do in
connection with the Construction Work. 
Nothing contained herein shall create or be deemed to create any
relationship between the Port Authority and any such contractor, architect,
supplier, subcontractor or any other Person engaged by the Lessee or any of its
contractors in the performance of any part of the Construction Work and the
Port Authority shall not be responsible to any of the foregoing for any
payments due or alleged to be due thereto for any work performed or materials
purchased in connection with the Construction Work.


 


(18)         (i)            Without limiting any
other terms, provisions and conditions of the Lease, the Lessee understands and
agrees that it shall put into effect prior to the commencement of any of the
Construction Work an affirmative action program and Minority Business
Enterprise (MBE) program and Women-owned Business Enterprise (WBE) program in
accordance with the provisions of Schedule E attached hereto and hereby made a
part hereof (hereinafter “Schedule E”); as used in Schedule E the term
“construction work” shall apply to the Construction Work.  The provisions of said Schedule E shall be
applicable to the Lessee’s contractor or contractors and subcontractors at any
tier of construction as well as to the Lessee itself and the Lessee shall
include the provisions of said Schedule E within all of its construction
contracts so as to make said provisions and undertakings the direct obligation
of the construction contractor or contractors and subcontractors at any tier of
construction.  The Lessee shall and
shall require its said contractor, contractors and subcontractors to furnish to
the Port Authority such data, including but not limited to compliance reports
relating to the operation and implementation of the affirmative action, MBE and
WBE programs called for hereunder as the Port Authority may request at any time
and from time to time regarding the affirmative action, MBE and WBE programs of
the Lessee and its contractor, contractors, and subcontractors at any tier of
construction, and the Lessee shall and shall also require that its contractor,
contractors and subcontractors at any tier of construction make and put into effect
such modifications and additions thereto as may be directed by the Port
Authority pursuant to the provisions hereof and said Schedule E to effectuate
the goals of affirmative action and MBE and WBE programs.


 


(ii)           In
addition to and without limiting any terms and provisions of this Lease, the
Lessee shall provide in its contracts and all subcontracts covering the
Construction Work or any portion thereof, that:


 


(aa)         The
contractor shall not discriminate against employees or applicants for
employment because of race, creed, color, national origin, sex, age, disability
or marital status, and shall undertake or continue existing programs of
affirmative action to ensure that minority group persons are afforded equal
employment opportunity without discrimination. 
Such programs shall include, but not be limited to, recruitment,
employment, job assignment, promotion, upgrading, demotion, transfer, layoff,
termination, rates of pay or other forms of compensation, and selections for
training or retraining, including apprenticeships and on-the-job training;


 


(bb)         At
the request of either the Port Authority or the Lessee, the contractor shall
request such employment agency, labor union, or authorized


 


14

















 


representative of workers with which it has a collective bargaining or
other agreement or understanding and which is involved in the performance of
the contract with the Lessee to furnish a written statement that such
employment agency, labor union or representative shall not discriminate because
of race, creed, color, national origin, sex, age, disability or marital status
and that such union or representative will cooperate in the implementation of
the contractor’s obligations hereunder;


 


(cc)         The
contractor will state, in all solicitations or advertisements for employees
placed by or on behalf of the contractor in the performance of the contract,
that all qualified applicants will be afforded equal employment opportunity
without discrimination because of race, creed, color, national origin, sex,
age, disability or marital status;


 


(dd)         The
contractor will include the provisions of subparagraphs (18)(aa) through
(18)(cc) of this paragraph (c) in every subcontract or purchase order in such a
manner that such provisions will be binding upon each subcontractor or vendor
as to its work in connection with the contract;


 


(ee)         “Contractor”
as used herein shall include each contractor and subcontractor at any tier of
construction.


 


(iii)          The
Lessee in the performance of the Construction Work shall commit itself to and
use good faith efforts to implement an extensive program to utilize Local
Business Enterprises in accordance with and as set forth the schedule attached
hereto, hereby made a part hereof and marked “Schedule F”.


 


(19)         The
Lessee shall not commence the Construction Work covered by any Construction
Application unless and until it has met with the General Manager of the Airport
and has given him at least 72 hours advance notice of its intention to perform
such Construction Work.  Scheduling of
the Construction Work shall be coordinated with the General Manager of the
Airport or his duly authorized representative. 
In addition, the Lessee in its performance of the Construction Work
shall coordinate the Construction Work with any work being performed or to be
performed by the Port Authority or its contractors, and the Lessee shall
require that its contractors involved in the performance of the Construction
Work cooperate with the Port Authority and the contractors of the Port
Authority engaged in the performance of any such work.


 


(20)         In
connection with the performance of the Construction Work the Lessee shall be
responsible for identifying the location of all utilities and shall prior to
the commencement of any of the Construction Work coordinate the Construction
Work with the New York City and Long Island One Call toll free information
service (1-800-272-4480) and ascertain the location of underground utilities,
if any, at the Terminal and off the Terminal in the vicinity where any of the
Construction Work is to be performed. 
The Lessee shall provide the Port Authority with the written evidence of
such coordination.


 


15

















 


(21)         In
the performance of the Construction Work the Lessee shall not employ any
contractor nor shall the Lessee or any of its contractors employ any Persons or
use or have any equipment or materials or allow any condition to exist if any
such shall or, in the opinion of the Port Authority, may cause or be conducive
to any labor troubles at the Airport which interfere, or in the opinion of the
Port Authority are likely to interfere with the operations of others at the
Airport or with the progress of other construction work thereat.  The determinations of the Port Authority
shall be conclusive to the Lessee.  Upon
notice from the Port Authority, the Lessee shall immediately remove such
contractor or withdraw or cause its contractors to withdraw from the Airport,
the Persons, equipment or materials specified in the notice and replace them
with unobjectionable contractors, Persons, equipment and materials and the
Lessee shall or shall cause its contractor to immediately rectify any condition
specified in the notice.  In the event
of failure by the Lessee or any of its contractors to immediately comply with
the requirements of this subparagraph (whether or not such failure is due to
the Lessee’s fault), the Port Authority shall have the right to suspend the
Lessee’s right to perform the Construction Work without prior notice; when the
labor troubles shall be so settled that such interferences or the danger
thereof no longer exists, the Port Authority, by notice to the Lessee, shall
reinstate said right on all the same terms and conditions as before the
suspension.  “Labor troubles” shall mean
and include strikes, boycotts, picketing, work-stoppages, slowdowns,
complaints, disputes, controversies or any other type of labor trouble,
regardless of the employer of the Person involved or their employment status,
if any.


 


(d)           Commencement
of Construction Work and Assignment of Port Authority Field Engineer


 


The Port Authority may assign to the Construction Work a full time
field engineer or engineers during any time that any Construction Work is being
performed pursuant to this Section.  The
Lessee shall pay to the Port Authority for the services of said engineer or
engineers, the sum of Seven Hundred Thirty-five Dollars and No Cents ($735.00)
per engineer for each day or part thereof that the engineer or engineers are so
assigned during the calendar year 2002; and the sum of Seven Hundred Fifty
Dollars and No Cents ($750.00) per engineer for each day or part thereof that
the engineer or engineers are so assigned during the calendar year 2003; and
the sum of Seven Hundred Sixty-five Dollars and No Cents ($765.00) per engineer
for each day or part thereof that the engineer or engineers are so assigned
during the calendar year 2004; provided, however, and
notwithstanding the foregoing, in the event any such field engineer shall be so
assigned for a half-day or less, then the rate the Lessee shall pay to the Port
Authority for such day for such engineer shall be equal to one half of the
applicable daily rate set forth above for such engineer.  Nothing contained herein shall affect any of
the provisions of paragraph (i) hereof or the rights of the Port Authority
thereunder.


 


(e)           Additional
Environmental Requirements


 


(1)           The
Construction Work shall be constructed in such a manner that there will be at
all times a minimum of air pollution, water pollution or any


 


16

















 


other type of pollution and a minimum of noise emanating from, arising
out of or resulting from the operation, use or maintenance of the Terminal by
the Lessee and from the operations of the Lessee under this Agreement.  Accordingly, and in addition to all other
obligations imposed on the Lessee under this Agreement and without diminishing,
limiting, modifying or affecting any of the same, the Lessee shall be obligated
to construct as part of the Construction Work hereunder such structures,
fences, equipment, devices and other facilities as may be necessary or
appropriate to accomplish the foregoing and each of the foregoing shall be and
become a part of the Construction Work hereunder.


 


(2)           Notwithstanding
the provisions of subparagraph (1) above and in addition thereto, the Port
Authority hereby reserves the right from time to time and at any time during
the term of the Lease to require the Lessee, subsequent to the completion of
the Construction Work to design and construct at its sole cost and expense such
further reasonable structures, fences, equipment, devices and other facilities
as may be necessary or appropriate to accomplish the objectives as set forth in
the first sentence of subparagraph (1) hereof. 
All locations, the manner, type and method of construction and the size
of any of the foregoing shall be determined by the Port Authority after having
consulted with the Lessee.   The Lessee
shall submit for Port Authority approval its plans and specifications covering
the required work and upon receiving such approval shall proceed diligently to
construct the same.  All other
provisions of this Section with respect to the Construction Work shall apply
and pertain with like effect to any work which the Lessee is obligated to
perform pursuant to this paragraph (e) and upon completion of each portion of
such work, if the same is performed on the Premises, it shall be and become a
part of the Premises.


 


(f)            Title
to Construction Work


 


Title to all the Construction Work shall pass to the City as the same
or any part thereof is erected, constructed or installed and the same shall be
and become a part of the Premises hereunder if located on the Premises.  The foregoing provisions of this paragraph
(f) shall not affect the risks and obligations assumed by the Lessee hereunder
nor release the Lessee from the performance of its rebuilding and restoration
obligations set forth in this Section 2.


 


(g)           Continuing
Operations


 


The Lessee acknowledges that it will be continuing its operations at
the Terminal under the Lease during the period of time it is performing the
Construction Work hereunder.  The Lessee
further acknowledges that this may involve among other things inconvenience, noise,
dust, interference and disturbance to the Lessee in its operations at the
Terminal as well as to its customers, patrons, invitees and employees and
possibly other risks as well.  The
Lessee hereby expressly assumes all of the foregoing risks and agrees that
there will be no reduction or abatement of any of the rentals, fees or charges
payable by the Lessee under the Lease or otherwise on account of its
performance of the Construction Work and that the performance of the
Construction


 


17

















 


Work shall not constitute an eviction or constructive eviction of the
Lessee nor be grounds for any abatement of rents, fees or charges payable by
the Lessee under the Lease or otherwise nor give rise to or be the basis of any
claim or demand by the Lessee against the Port Authority, its Commissioners,
officers, employees or agents for damages, consequential or otherwise.


 


(h)           Utility
Lines


 


The Port Authority shall have no responsibility for bringing to the
Terminal any utility service lines for the supply of cold water, electric
power, and sanitary and storm sewers, or any other utility or service lines,
except for the utility service lines that may be serving the Terminal on the
Effective Date.  If the Lessee
determines that it will require that additional utility service lines be
brought to the Terminal or that the capacity of one or more of the existing
utility service lines serving the Terminal be greater than the capacity which
existed on the Effective Date, the Lessee shall submit to the Port Authority
for the Port Authority’s approval a tenant alteration application covering the
work to provide the additional utility service line capacity to the Terminal
(hereinafter called the “Off-Terminal Utility Service Line Work”) which work
when and if approved by the Port Authority shall be performed by the Lessee at
the Lessee’s sole cost and expense in accordance with all the terms and
provisions of this Section, provided, 
however, that the Off-Terminal Utility Service Line Work shall not be or
become a part of the Premises hereunder.


 


(i)            Completion
of the Construction Work


 


(1)           When
the Construction Work under each Construction Application is completed and
ready for use, the Lessee shall deliver to the Port Authority a certificate
signed by an authorized officer of the Lessee and also signed by the Lessee’s
architect or engineer licensed to practice in the State of New York certifying
that such Construction Work has been constructed in accordance with the
approved Construction Application and plans and specifications and the
provisions of the Lease and in compliance with all applicable laws, ordinances
and governmental rules, regulations, directives and orders.  Thereafter the Construction Work will be
inspected by the Port Authority and if the same has been completed as certified
by the Lessee and the Lessee’s licensed architect or engineer, as aforesaid, a
certificate to such effect shall be delivered to the Lessee, subject to the
condition that all risks thereafter with respect to the construction and
installation of the same and any liability therefor for negligence or other
reason shall be borne by the Lessee. 
The Lessee shall not use or permit the use of the Construction Work for the
purposes set forth in the Lease until such certificate is received from the
Port Authority, and the Lessee shall not use or permit the use of the
Construction Work or any portion thereof even if such certificate is received
if the Port Authority states in any such certificate that the same cannot be
used until other specified portions are completed.


 


(2)           The
term “Construction Work Completion Date” for the purposes of the Lease shall
mean with the date appearing on the last certificate issued by


 


18

















 


the Port Authority pursuant to subparagraph (1) of this paragraph (i)
after the substantial completion of the Construction Work.


 


Section 3.              Term and
Additional Right of Termination


 


(a)           The
term of the letting under this Lease shall commence on the Effective Date and
shall expire on November 30, 2006 unless sooner terminated in accordance with
the terms and provisions of this Lease.


 


(b)           From
and after January 1, 2005, in addition to all of the rights of termination of
the Port Authority under this Lease, the Port Authority shall have the right to
terminate this Agreement and the letting herein, without cause, at any time, on
ninety (90) days’ notice to the Lessee. 
In the event of termination pursuant hereto, this Agreement and the
letting hereunder shall cease and expire as if the effective date stated in
said notice were the date originally set forth herein for the expiration of
this Agreement.


 


Section 4.              Rental


 


I.              Definitions


 


For the purposes of the Lease the following terms shall he the respective
meanings given below:


 


(a)           “Additional
Gate Rental Amount” shall mean the amount of Seven Hundred Seventy-five
Thousand Eight Dollars and No Cents ($775,008.00) as the same shall be adjusted
as set forth in subparagraphs (1) and (2) of this paragraph (a) during the term
of the letting under the Lease.


 


(1)           The Port Authority shall ascertain the CPI
for the first Reference Month and for each succeeding Reference Month after the
same has been published, and the Port Authority shall also determine each CPI
Percentage Increase.


 


(2)           (i)            Effective
on December 1, 2002  the Additional Gate
Rental Amount shall be increased as follows: the Additional Gate Rental Amount
of Seven Hundred Seventy-five Thousand Eight Dollars and No Cents ($775,008.00)
shall be multiplied (x) by a percentage composed of 1⁄2 of the CPI Percentage
Increase as calculated using the two Reference Months immediately preceding
December 1, 2002 (that is September 2001 and September 2002) plus 100% and (y)
by 104%; and the greater of the amounts so obtained from the foregoing
calculations set forth in clauses (x) and (y) 
shall be and become the Additional Gate Rental Amount in effect during
the Adjustment Period commencing on December 1, 2002.


 


19

















 


(ii)           Effective on December 1, 2003 and on the
first day of each Adjustment Period occurring during the remainder of the term
of the letting under the Lease, the Additional Gate Rental Amount shall be
further increased for each Adjustment Period as follows:  the amount of the Additional Gate Rental
Amount as the same shall have been last adjusted under this paragraph (a),
shall be multiplied (x) by a percentage composed of 1⁄2 of the CPI Percentage
Increase calculated using the two Reference Months immediately preceding the
first day of the subject Adjustment Period plus 100% and (y) by 104%; and the
greater of the amounts so obtained from the foregoing calculations set forth in
clauses (x) and (y) shall be and become the Additional Gate Rental Amount in
effect during such Adjustment Period.


 


(b)           “Additional
Gate Rentals” shall have the meaning set forth in paragraph (c) of Subdivision
II of this Section.


 


(c)           “Additional
Rental” shall mean the rental payable by the Lessee to the Port Authority
pursuant to and calculated in accordance with the terms and conditions of
Subdivision III of this Section.


 


(d)           “Additional
Rental Payment Date” shall mean the earlier to occur of (i) the sixtieth (60th)
day occurring after November 30, 2004 or (ii) the thirtieth (30th) day
occurring after the Termination Date, if any.


 


(e)           “Adjustment
Period” shall mean as the context requires the period commencing on December 1,
2002 and expiring on November 30, 2003 and each of the succeeding twelve-month
periods thereafter occurring during the term of the letting under the Lease
commencing on each December 1st and in the event the Lease expires or is
terminated on other than the last day of an Adjustment Period then in such
event “Adjustment Period” shall mean the actual number of days during such
Adjustment Period that the Lease was in effect.


 


(f)            “Building
Rental” shall mean the rental payable by the Lessee to the Port Authority
pursuant to and calculated in accordance with the terms and conditions of
paragraph (b) of Subdivision II of this Section.


 


(g)           “Certificate”
shall have the meaning set forth in paragraph (b) of Subdivision III of this
Section.


 


(h)           “CPI”
or “Consumer Price Index” shall mean the Consumer Price Index for all Urban
Consumers, New York-Northern New Jersey, Long Island, NY-NJ-CT (All Items,
unadjusted 1982-84=100) published by the Bureau of Labor Statistics of the
United States Department of Labor.


 


(i)            “CPI
Percentage Increase” shall mean the annual percentage increase, if any, in the
CPI yielded by dividing the amount of the increase, if any, in the CPI for one
Reference Month as compared to the CPI for the immediately


 


20

















 


preceding Reference Month, by the CPI for the earlier of the two
Reference Months; as determined by the Port Authority.


 


(j)            “Cost
of the Construction Work” shall mean the sum of the following amounts, and such
amounts only, (but only to the extent such amounts are included in the
Certificate, if any) actually paid by the Lessee for Construction Work
performed by the Lessee during the Investment Period, and only during such
period, to the extent that the inclusion of the same is permitted by sound
accounting practices consistently applied:


 


(i)            the amounts paid by the Lessee to
independent third party contractors for work actually performed and labor and
materials actually furnished in connection with the Construction Work,
inclusive of sales, use and like taxes where applicable,  and


 


(ii)           the amounts actually paid by the Lessee in
connection with the Construction Work (without duplication and excluding any
amounts included in any other item hereof) for engineering, architectural,
professional and consulting services, and the supervision of construction,
inclusive of sales, use and like taxes where applicable, provided, however,
that such amounts pursuant to this subdivision (ii) shall not exceed fifteen
per cent (15%) of the amounts described in subdivision (i);


 


provided, however, the Cost of the
Construction Work shall be limited to work covered by the Certificate, if any,
submitted by the Lessee pursuant to and in accordance with paragraphs (b) and
(c) of Subdivision III of this Section and, further, it is specifically
understood and agreed that no amounts paid for or in connection with any trade
fixtures or other personal property of the Lessee or any payment or payments on
account of any administrative or other overhead costs of the Lessee whether or
not allocated to the Construction Work by the Lessee’s own accounting practices
shall be included in the Cost of the Construction Work.


 


(k)           “Gate
No. 1 Rental” shall mean the rental payable by the Lessee to the Port Authority
pursuant to and calculated in accordance with the terms of paragraph (c)(1) of
Subdivision II of this Section.


 


(l)            “Gate
No. 3 Rental” shall mean the rental payable by the Lessee to the Port Authority
pursuant to and calculated in accordance with the terms of paragraph (c)(2) of
Subdivision II of this Section.


 


(m)          “Ground
Rental” shall mean the rental payable by the Lessee to the Port Authority
pursuant to and calculated in accordance with the terms of paragraph (a) of
Subdivision II of this Section.


 


21

















 


(n)           “Reference
Month” shall mean the month of September 2001 (the first Reference Month) and
each succeeding month of September occurring during the remainder of the term
of the letting under the Lease.


 


(o)           “Termination
Date” shall mean the effective date of the termination of the letting under
this Lease by the Port Authority in accordance with a notice of termination as
provided in Section 20 hereof entitled “Termination by the Port Authority”, or
the date that the interest of the Lessee is cancelled pursuant Section 20
hereof.


 


II.            Ground
Rental, Building Rental and Additional Gate Rentals


 


(a)           (1)           Effective on the
Effective Date, the Lessee shall pay to the Port Authority a rental (the
“Ground Rental”) for the ground area shown in stipple, stipple diagonal
hatching and stipple crosshatching on Exhibit 1.1 at the rate of Two Million
Thirty-Nine Thousand Four Hundred Thirty-Five Dollars and No Cents
($2,039,435.00) per annum for the portion of the term of the letting from the
Effective Date to November 30, 2002, both dates inclusive, which Ground Rental
shall thereafter be adjusted on an annual basis as hereinafter set forth during
the term of the letting under the Lease.


 


(2)           The
Port Authority shall ascertain the CPI for the first Reference Month and for
each succeeding Reference Month after the same has been published, and the Port
Authority shall also determine each CPI Percentage Increase.


 


(3)           (i)            Effective on December
1, 2002  the Ground Rental shall be
increased as follows: the Ground Rental set forth in paragraph (a)(1) above
shall be multiplied (x) by a percentage composed of 1⁄2 of the CPI Percentage
Increase as calculated using the two Reference Months immediately preceding
December 1, 2002 (that is September 2001 and September 2002) plus 100% and (y)
by 104%; and the greater of the amounts so obtained from the foregoing calculations
set forth in clauses (x) and (y)  shall
be and become the Ground Rental in effect for the Adjustment Period commencing
on December 1, 2002.


 


(ii)           Effective
on December 1, 2003 and on the first day of each Adjustment Period occurring
during the remainder of the term of the letting under the Lease, the Ground
Rental shall be further increased for each Adjustment Period as follows:  the amount of the Ground Rental set forth in
paragraph (a)(1) above as the same shall have been last adjusted under this
paragraph (a), shall be multiplied (x) by a percentage composed of 1⁄2 of the CPI
Percentage Increase calculated using the two Reference Months immediately
preceding the first day of the subject Adjustment Period plus 100% and (y) by
104%; and the greater of the amounts so obtained from the foregoing
calculations set forth in clauses (x) and (y) shall be and become the Ground
Rental in effect for the Adjustment Period.


 


22

















 


(b)           (1)           Effective on the
Effective Date, the Lessee shall pay to the Port Authority a rental (the
“Building Rental”) for Terminal 6, exclusive of the Additional Gates, at the
rate of Eight Million Five Hundred Twenty-Five Thousand Eighty-Eight Dollars
and No Cents ($8,525,088.00) per annum for the portion of the term of the
letting from the Effective Date to November 30, 2002, both dates inclusive,
which Building Rental shall thereafter be adjusted on an annual basis as
hereinafter set forth during the term of the letting under the Lease.


 


(2)           The
Port Authority shall ascertain the CPI for the first Reference Month and for
each succeeding Reference Month after the same has been published, and the Port
Authority shall also determine each CPI Percentage Increase.


 


(3)           (i)            Effective December 1, 2002,
the Building Rental shall be increased as follows: the Building Rental set
forth in paragraph (b)(1) above shall be multiplied (x) by a percentage
composed of 1⁄2 of the CPI Percentage Increase calculated using the two Reference
Months immediately preceding December 1, 2002 (that is September 2001 and
September 2002) plus 100% and (y) by 104%; and the greater of the amounts so
obtained from the foregoing calculations set forth in clauses (x) and (y) shall
be and become the Building Rental in effect for the Adjustment Period
commencing on December 1, 2002.


 


(ii)           Effective
on December 1, 2003 and on the first day of each Adjustment Period occurring
during the remainder of the term of the letting under the Lease, the Building
Rental shall be further increased for each Adjustment Period as follows: the
amount of the Building Rental set forth in paragraph (b)(1) above as the same
shall have been last adjusted under this paragraph (b), shall be multiplied (x)
by a percentage composed of 1⁄2 of the CPI Percentage Increase calculated using
the two Reference Months immediately preceding the first day of the subject
Adjustment Period plus 100% and (y) by 104%; and the greater of the amounts so
obtained from the foregoing calculations set forth in clauses (x) and (y) shall
be and become the Building Rental in effect for the Adjustment Period.


 


(c)           (1)           Commencing on the Gate
No. 1 Commencement Date the Lessee shall pay to the Port Authority a rental
(the “Gate No. 1 Rental”) for the Gate No. 1 Premises at a rate per annum equal
to the Additional Gate Rental Amount in effect for the Adjustment Period in
which the Gate No. 1 Commencement Date shall occur, which Gate No. 1 Rental
shall thereafter be adjusted effective as of the first day of each Adjustment
Period occurring during the remainder of the term of the letting under the
Lease to a rate per annum equal to the Additional Gate Rental Amount in effect
for such Adjustment Period.


 


(2)           Commencing
on the Gate No. 3 Commencement Date the Lessee shall pay to the Port Authority
a rental (the “Gate No. 3 Rental”) for the Gate No. 3 Premises at a rate per
annum equal to the Additional Gate Rental Amount in effect for the Adjustment
Period in which the Gate No. 3 Commencement Date shall occur, which Gate No. 3
Rental shall thereafter be adjusted effective as of the first day of each


 


23

















 


Adjustment Period occurring during the remainder of the term of the
letting under the Lease to a rate per annum equal to the Additional Gate Rental
Amount in effect for such Adjustment Period.


 


(3)           The
Gate No. 1 Rental and the Gate No. 3 Rental hare herein collectively called the
“Additional Gate Rentals”.


 


(d)           (1)           The Building Rental and
the Ground Rental shall be payable by the Lessee in advance in equal monthly
installments on the Effective Date and on the first day of each and every
calendar month thereafter occurring during the balance of the term of the
letting under the Lease.


 


(2)           The
Gate No. 1 Rental shall be payable by the Lessee in advance in equal monthly
installments on the Gate No. 1 Commencement Date and on the first day of each
and every calendar month thereafter occurring during the balance of the term of
the letting under the Lease.


 


(3)           The
Gate No. 3 Rental shall be payable by the Lessee in advance in equal monthly
installments on the Gate No. 3 Commencement Date and on the first day of each
and every calendar month thereafter occurring during the balance of the term of
the letting under the Lease.


 


(4)           If
any annual Building Rental, Ground Rental or Additional Gate Rentals
established hereunder shall be for less than a whole calendar year each monthly
installment payable during such year shall be equal to one-twelfth (1/12th) of
said annual rental.  If any installment
of Building Rental, Ground Rental or Additional Gate Rentals payable hereunder
shall be for less than a full calendar month then the rental payment for the
portion of the month for which such payment is due shall be the monthly
installment prorated on a daily basis using the actual number of days in the
said month.


 


(e)           In
the event the CPI is not available for any Reference Month, the Lessee shall
continue to pay the Ground Rental, the Building Rental and the Additional Gate
Rentals at the annual rates then in effect subject to retroactive adjustment
based upon the adjustment to the Ground Rental, the Building Rental and the
Additional Gate Rentals for such Adjustment Period when the CPI for such
Reference Month becomes available.  The
Lessee hereby agrees to pay to the Port Authority all Ground Rental, Building
Rental and Additional Gate Rentals due and owing to the Port Authority on the
basis of such retroactive adjustments on demand.


 


(f)            In
the event of the change of basis or the discontinuance of the publication by the
United States Department of Labor of the CPI, such other appropriate index or
indexes shall be substituted as may be agreed by the parties hereto as properly
reflecting changes in the value of the current United States money in a manner
similar to that established in the said indexes used in the latest
adjustment.  In the event of the failure
of the parties to so agree, the Port Authority may select and use such index or


 


24

















 


indexes as it deems appropriate, provided, however, that the foregoing
shall not preclude the Lessee from contesting the Port Authority’s selection.


 


(g)           In
no event shall any adjustment in the Ground Rental for any change in the CPI
result in a decrease in the Ground Rental; and in no event shall any adjustment
in the Building Rental for any change in the CPI result in a decrease in the
Building Rental; and in no event shall any adjustment in the Additional Gate
Rental Amount for any change in the CPI result in a decrease in the amount of
the Additional Gate Rental Amount.


 


III.           Additional
Rental


 


(a)           The
Lessee shall pay to the Port Authority on the Additional Payment Date an
Additional Rental equal to the difference obtained by subtracting the Cost of
the Construction Work (but only to the extent that the amounts constituting the
Cost of the Construction Work are properly includable therein and for which the
Certificate meeting all the requirements set forth in paragraphs (b) and (c) of
this Subdivision III has been delivered to the Port Authority on or before the
Additional Rental Payment Date), from the amount of Four Million Dollars and No
Cents ($4,000,000.00), provided, however, in the event that both (x) a
Termination Date shall occur on or before November 30, 2004 and (y) the Lessee
shall have surrendered the Premises to the Port Authority in accordance with
the terms and conditions of Section 26 hereof entitled “Surrender”, then in
such event and only in the event both items (x) and (y) shall have occurred,
the amount of the Additional Rental shall be equal to the difference obtained
by subtracting the Cost of the Construction Work for work performed by the
Lessee during the period from December 1, 2001 to the Termination Date, both
dates inclusive, from an amount equal to the product obtained by multiplying
the amount of Four Million Dollars and No Cents ($4,000,000.00) by a fraction
the numerator of which shall be the number of whole calendar months from
December 1, 2001 to the Termination Date and the denominator of which shall be
the number of whole calendar months from December 1, 2001 to December 1,
2004.  The Lessee shall pay the
Additional Rental to the Port Authority in full on or before the Additional
Rental Payment Date.


 


(b)           The
Lessee shall deliver to the Port Authority on or before the Additional Rental
Payment Date a certificate covering the Cost of the Construction Work meeting
all the requirements set forth in paragraph (c) of this Subdivision III (such
certificate which meets all the requirements set forth in paragraph (c) of this
Subdivision III and which is delivered to the Port Authority on or before the
Additional Rental Payment Date is hereinafter referred to as the
“Certificate”).


 


(c)           The
certificate to be delivered to the Port Authority pursuant to paragraph (b) of
this Subdivision III shall be signed by a responsible fiscal officer of the
Lessee and sworn to before a notary public and further shall:


 


25

















 


(i)            set
forth, in reasonable detail, the amounts paid to specified independent third
party contractors and the amounts of payments made to other specified Persons
for the Cost of the Construction Work performed under each Construction
Application and certify that such amounts constitute portions of the Cost of the
Construction Work in accordance with and as described and defined in this
Section 4;


 


(ii)           set
forth the total cumulative amount of the payments made by the Lessee for the
Cost of the Construction Work during the Investment Period;


 


(iii)          have
attached thereto reproduction copies or duplicate originals of the invoices of
such independent third party contractors and other Persons and an
acknowledgment by such independent contractors and other Persons of the receipt
by them of such amounts and payments;


 


(iv)          certify
that the amounts and payments therein set forth constitute all or a portion of
the Construction Work; that the Construction Work covered by the certificate
has been accomplished and that it has been performed in accordance with all the
terms and provisions of this Lease; and, subject to the concurrence of the Port
Authority, that said Construction Work is in place and has a value of not less
than the amounts set forth therefore in the certificate; and that the work
covered by the certificate was perform by the Lessee during the Investment
Period.


 


(d)           In
addition to the Certificate, the Lessee shall provide the Port Authority with
such further certifications, information and documentation with respect to the
Cost of the Construction Work as the Port Authority may from time to time
require.


 


(e)           The
Lessee shall maintain Books and Records in connection with the Construction
Work and the Cost of the Construction Work in accordance with the terms and
conditions of Section 65 hereof entitled “Books and Records”.  Without limiting the generality of Section
65 hereof, it is hereby agreed that for the purposes of this Section and
Section 65 the Lessee’s Books and Records shall include without limitation all
invoices relating to the Construction Work, all contracts covering each portion
of the Construction Work including but not limited to the Lessee’s contracts
and agreements with its architects, engineers, and construction managers and
other contractors.  It is hereby
understood that the Port Authority shall not be bound by any prior audit or
inspection of the Lessee’s Books and Records.


 


(f)            In
the event that a Port Authority audit shall disclose that the amount of the
Cost of the Construction Work is not the amount set forth in the Certificate,
then the amount of the Additional Rental shall be recalculated based upon the
amount of the Cost of the Construction Work as determined by the Port Authority
audit, and any Additional Rental resulting from such recalculation shall be
immediately payable by the Lessee to the Port Authority upon thirty (30) days
demand and any Additional Rental paid to the Port Authority by the Lessee in
excess of the Additional Rental resulting from such recalculation shall be
credited to the obligations of the Lessee under this Lease.


 


26

















 


(g)           If
the Lessee has included in any portion of the Cost of the Construction Work any
item as having been incurred, but which in the opinion of the Port Authority
was not so incurred, or which in the opinion of the Port Authority if so
incurred is not an item properly chargeable to such element of cost under sound
accounting practice or to the Cost of the Construction Work, or does not
represent an appropriate division of the costs of a particular contract
according to time of performance or delivery, and the parties have been unable
to resolve their differences within ninety (90) days after Port Authority gives
notice to the Lessee objecting to the same, the Port Authority’s decision as to
the nature of the item of construction cost shall be final.


 


IV.           Abatement



 


In the event that the Lessee shall at any time by the provisions of
this Agreement expressly be entitled to abatement of the rentals for the
Premises, then the said abatement shall be computed as follows (it being
understood that there shall be no abatement of such rentals under the Lease for
any portion of the Premises or any portion of the term except as specifically
provided in this Subdivision IV and in no event shall there be any abatement of
the Additional Rental).


 


(a)           Ground
Rental Abatement


 


For each acre of land in the Premises the use of which is denied to the
Lessee:


 


(1)           For
the portion of the term of the letting under the Lease from the Effective Date
through November 30, 2002, both dates inclusive, at the daily rate of $208.02;
and


 


(2)           For
the portion of the term of the letting from December 1, 2002, through the
remainder of the term of the letting at the daily rate of $208.02, as
appropriately adjusted to reflect any and all adjustments in the Ground Rental
pursuant to paragraph (a) of Subdivision II of this Section.


 


(b)           Building
Rental Abatement


 


(1)           For
each square foot of interior space in Terminal 6 exclusive of the Additional
Gates, the use of which is denied to the Lessee:


 


(i)            For the portion of the term of the letting
under the Lease from the Effective Date through November 30, 2002, both dates
inclusive, at a daily rate equal to $.061545.


 


(ii)           For the portion of the term of the letting
from December 1, 2002 throughout the remainder of the term of the letting at
the daily


 


27

















 


rate of $.061545, as appropriately adjusted to reflect any and all
adjustments in the Building Rental pursuant to paragraph (b) of Subdivision II of
this Section.


 


(2)           For
each square foot of each of the Additional Gates, the use of which is denied to
the Lessee:


 


(i)            For the portion of the term of the letting
under the Lease from the Effective Date through November 30, 2002, both dates
inclusive, at a daily rate equal to $.061545.


 


(ii)           For the portion of the term of the letting
from December 1, 2002 throughout the remainder of the term of the letting at
the daily rate of $.061545, as appropriately adjusted to reflect any and all
adjustments in the Additional Gate Rental Amount pursuant to paragraph (a) of
Subdivision I of this Section.


 


(c)           For
the purposes of this Section, all of the interior space shall be measured and
the same shall be ascertained by measuring between the interior plaster surfaces
of the exterior building walls, and no deductions will be made therefrom for
columns, pilasters, projections, partitions, toilets, vertical shafts, elevator
shafts, stairs, fire towers, vents, pipe shafts, meter closets, flues, stacks,
structures or facilities of any kind or anything else located therein.


 


Section 5.              Use of Premises


 


(a)           The
Lessee, in connection with its business of transportation by aircraft, may use
the Premises for the following purposes and for activities reasonably required
for such purposes and for such purposes and activities only:


 


(1)           For
the reservation of space and the sale of tickets for transportation on aircraft
operated by the Lessee.


 


(2)           For
the reservation of space and the sale of tickets for transportation by other
carriers but only as an incident to or in connection with transportation
performed or to be performed by the Lessee or as an incident to or in
connection with the cancellation of such transportation, or for the
accommodation or convenience of the incoming or outbound passengers of the
Lessee at the Airport.  The occasional
reservation of space and the sale of tickets for transportation by other
carriers shall not be deemed to be prohibited by this provision.


 


(3)           For
the clearance, checking and rendering of service to passengers of the Lessee
and for the furnishing of information service to such passengers and the
general public.


 


28

















 


(4)           For
providing rooms or space for the special handling of or the furnishing of
special services to any of its passengers, guests, or invitees, subject to the
provisions of Section 59 hereof entitled “Club Rooms”.


 


(5)           For
the handling of baggage of passengers of the Lessee including baggage and
parcels such passengers decide to send as air cargo.


 


(6)           For
the handling of unclaimed baggage and lost and found articles.


 


(7)           For
the conduct of operations, traffic, communications, reservations and
administrative and executive office functions and activities in connection with
air transportation performed by the Lessee.


 


(8)           For
the preparation, packaging and storage of food, beverages and commissary
supplies to be consumed on aircraft operated by the Lessee.


 


(9)           For
the storage of repair parts, supplies and other personal property owned or
leased by the Lessee and for the performance of minor repairs to personal
property of the Lessee.


 


(10)         For
the storage of such automotive fuel and lubricants as may be approved by the
Port Authority.


 


(11)         For
the operation of a cafeteria for over-the-counter sales to officers and
employees of the Lessee or of any Subsidiary or Affiliate of the Lessee and
their families and to occasional business guests of such officers and employees
(other than passengers of the Lessee), of food, beverages and other merchandise
normally sold in such an establishment at no profit to the Lessee and either
directly by the Lessee or through a Subsidiary thereof or by an independent
contractor who has received a permit from the Port Authority so to do.


 


(12)         For
use as crew quarters to be used by personnel of the Lessee during layovers
between flights and for the establishment of lounges for employees of the
Lessee.


 


(13)         For
the loading and unloading of passengers, baggage, mail, air cargo and
commissary supplies, provided that the use of the Premises for the unloading
and loading of passengers and their baggage from ground transportation vehicles
shall be subject to limitation and restriction, from time to time, as set forth
in Section 58 hereof entitled “Future Airport Transportation Facilities and
Operations Use of Portions of the Premises” and Section 46 hereof entitled
“Restrictions on Use of Passenger Terminal Frontage Roadways-Use of Airport
Taxi Dispatchers and Roadway Frontage Management”.


 


29

















 


(14)         For
the parking and storage of aircraft and ramp equipment operated by the Lessee.


 


(15)         For
the fueling and servicing of aircraft and ramp equipment operated by the Lessee
and for the maintenance of ramp equipment operated by the Lessee.


 


(16)         For
the performance of aircraft maintenance, subject to the limitations imposed by
paragraph (j) of Section 9 hereof entitled “Prohibited Acts”.


 


(17)         For
the training of personnel employed or to be employed by the Lessee or other
Persons engaged in commercial transportation by aircraft, provided, that unless
consented to by the Port Authority, the Lessee shall not engage in the training
of persons employed by others or to be employed by others if the training of
such persons is in competition with any concessionaire, permittee or licensee
of the Port Authority at the Airport (other than another Person engaged in the
business of transportation by aircraft).


 


(18)         For
the temporary storage of baggage, mail and air cargo.


 


(19)         For
any other purpose or activity, in addition to those specified in this Section,
for which the Premises are expressly authorized to be used by any other
provision of this Agreement.


 


(b)           The
loading or unloading on the Premises of all aircraft used principally for cargo
is expressly prohibited.  Further,
notwithstanding any other term or provision of this Lease, including without
limitation, any reference to Handled Airlines, Requesting Airline, Accommodated
Handled Airline or Accommodated Sublessee Airline, it is understood and agreed
that the Lessee is prohibited hereunder from performing any services for any
other Aircraft Operator without the prior written consent of the Port
Authority, which consent the Port Authority shall have no obligation whatsoever
to give.


 


Section 6.              Compliance with
Governmental Requirements


 


(a)           The
Lessee shall promptly comply with, observe and execute all laws and ordinances
and governmental rules, regulations, orders, requirements and similar items,
including without limitation, all Environmental Requirements, now or at any
time during the term of this Agreement which as a matter of law are applicable
to or which affect (i) the Terminal or the groundwater thereunder, (ii) the
operations of the Lessee at the Premises or the Airport, (iii) the occupancy
and use of the Premises and/or (iv) any Hazardous Substance which has migrated
from or from under the Terminal.   The
Lessee shall, in accordance with and subject to the provisions of Section 2
hereof entitled “Construction by the Lessee” or Section 33 hereof entitled
“Other Construction of the Lessee”, as the case shall be, make any and all
structural and non-structural improvements, alterations or repairs of the
Terminal and perform all remediation,


 


30

















 


containment and clean-up of Hazardous Substances required in order to
fully satisfy the compliance obligations set forth herein.


 


(b)           The
Lessee shall procure from all Governmental Authorities having jurisdiction over
the operations of the Lessee hereunder all licenses, certificates, permits or
other authorization which may be necessary for the conduct of such
operations.  “Governmental Authority”
shall not be construed as intending to include The Port Authority of New York
and New Jersey, the lessor under this Agreement.


 


(c)           The
obligation of the Lessee to comply with governmental requirements is provided
herein for the purpose of assuring proper safeguards for the protection of
persons and property on the Terminal. 
Such provision is not to be construed as a submission by the Port
Authority to the application to itself of such requirements or any of them.


 


(d)           Since
the Port Authority has agreed in the Basic Lease to conform to the enactments,
ordinances, resolutions and regulations of the City of New York and its various
departments, boards and bureaus in regard to the construction and maintenance
of buildings and structures and in regard to health and fire protection which
would be applicable if the Port Authority were a private corporation to the
extent that the Port Authority finds it practicable so to do, the Lessee shall
comply with all such enactments, ordinances, resolutions and regulations which
would be applicable to its operations hereunder if the Port Authority were a
private corporation, except in cases where the Port Authority either notifies
the Lessee that it need not comply with or directs it not to comply with any
such enactments, ordinances, resolutions or regulations which are applicable
only because of the Port Authority’s agreement in the Basic Lease.  The Lessee shall, for the Port Authority’s
information, deliver to the Port Authority promptly after receipt of any
notice, warning, summons, or other legal process for the enforcement of any
such enactment, ordinance, resolution or regulation a true copy of the
same.  Any direction by the Port
Authority to the Lessee not to comply with any such enactment, ordinance,
resolution or regulation shall be given only pursuant to a resolution duly
adopted by the Board of Commissioners of the Port Authority or by an authorized
committee of its Board and if any such direction is given by the Port Authority
to the Lessee, the Port Authority, to the extent that it may lawfully do so,
shall indemnify and hold the Lessee harmless from and against all claims,
actions, damages, liabilities, fines, penalties, costs and expenses suffered or
incurred by the Lessee as a result of non-compliance with such enactment,
ordinance, resolution or regulation.


 


(e)           The
Lessee shall have such time within which to comply with the aforesaid laws,
ordinances, rules and regulations as the authorities enforcing the same shall
allow.


 


Section 7.              Rules and
Regulations


 


(a)           The
Lessee covenants and agrees to observe and obey (and to require its officers,
employees, guests, invitees and those doing business with it to


 


31

















 


observe and obey) the existing Rules and Regulations of the Port
Authority, and such reasonable future Rules and Regulations of the Port
Authority (including amendments and supplements thereto) for the government of
the conduct and operations of the Lessee and others on the Premises as may from
time to time during the letting be promulgated by the Port Authority for
reasons of safety, health, noise, sanitation or good order.  The obligation of the Lessee to require such
observance and obedience on the part of its guests, invitees and business
visitors shall obtain only while such Persons are on the Premises.  The Port Authority agrees that except in
cases of emergency, it will give notice to the Lessee of every such future rule
or regulation adopted by it at least ten (10) days before the Lessee shall be
required to comply therewith.


 


(b)           The
use by the Lessee and its officers, employees, guests, invitees, sublessees,
and those doing business with it, of the Public Aircraft Facilities and any and
all other portions of the Airport which it may be entitled to use under this
Lease (other than space leased to the Lessee for its exclusive use) shall be
subject to the Rules and Regulations of the Port Authority in effect as of the
Effective Date, and such reasonable future rules and regulations (including
amendments and supplements to existing Rules and Regulations) as the Port
Authority may from time to time promulgate in the public interest and in the
interest of health, safety, noise, sanitation, good order and the economic and
efficient operation of the Airport, including but not limited to, the number
and type of aircraft which at any particular time may use the Public Aircraft
Facilities and the time or times when such aircraft may use the Public Aircraft
Facilities.  Without limiting the
foregoing, the Port Authority may take into account in adopting such Rules and
Regulations the adequacy, capacity and suitability of (i) aircraft using the
Airport, (ii) passenger handling facilities at the Airport including but not
limited to the AirTrain, (iii) the Public Aircraft Facilities at the Airport,
(iv) the roadways and (v) the parking facilities.  In the event the Port Authority promulgates rules and regulations
pursuant to this paragraph (b), the Port Authority may devise and implement
reasonable procedures including but not limited to, allocations among Aircraft
Operators at the Airport.


 


(c)           If
a copy of the Rules and Regulations is not attached, then the Port Authority
will notify the Lessee thereof either by delivery of a copy, or by making a
copy available at the office of the Secretary of the Port Authority.


 


Section 8.              Various
Obligations of the Lessee


 


(a)           The
Lessee shall conduct its operations hereunder in an orderly and proper manner,
so as not to unreasonably annoy, disturb or be offensive to others at or off
the Airport.  The Lessee shall take all
reasonable measures to eliminate vibrations originating on the Premises (and at
the Terminal if arising out of the operations of the Lessee) tending to damage
any equipment, structure, building or portion of a building which is on the
Premises, or is a part thereof, or is located elsewhere on or off the Airport.


 


32

















 


(b)           The
Lessee shall use its best efforts to conduct all its operations at the Terminal
in a safe and careful manner, following in all respects the best practices of
the air transportation industry in the United States.


 


(c)           The
Port Authority shall have the right to object to the Lessee regarding the
conduct and demeanor of the employees of the Lessee whereupon the Lessee will
take all steps reasonably necessary to remove the cause of the objection.  If requested by the Port Authority the
Lessee shall supply and shall require its employees to wear or carry badges or
other suitable means of identification, which shall be subject to the prior and
continuing approval of the General Manager of the Airport.


 


(d)           The
Lessee shall control all vehicular traffic on the roadways or other areas
within the Terminal or serving the same the use of which is granted to the
Lessee hereunder and shall take all precautions reasonably necessary to promote
the safety of its passengers and all other persons. The Lessee shall employ
such means as may be necessary to direct the movement of vehicular traffic
within the Terminal to prevent traffic congestion on the public roadways
leading to the Terminal.


 


(e)           The
Lessee shall remove from the Airport or otherwise dispose of in a manner
approved by the General Manager of the Airport all garbage, debris and other
waste materials (whether solid or liquid) arising out of its occupancy of the
Premises or out of its operations at the Airport.  Any such garbage, debris and other waste materials (whether solid
or liquid) which may be temporarily stored in the open, shall be kept in
suitable garbage and waste receptacles, the same to be made of metal or other
suitable material, and equipped with tightfitting covers, and to be of a design
safely and properly to contain whatever material may be placed therein.  The Lessee shall use extreme care when
effecting removal of all such waste materials, and shall effect such removal at
such times and by such means as first approved by the Port Authority.  No such garbage, debris or other waste
materials shall be or be permitted to be thrown, discharged or deposited into
or upon the waters at or bounding the Airport.


 


(f)            From
time to time and as often as reasonably required by the Port Authority, the
Lessee shall conduct pressure, water-flow, and other appropriate tests of the
fire extinguishing system and apparatus, fire-alarm and smoke detection systems
and any other fire protection systems which constitute a part of the
Terminal.  The Lessee shall keep in
proper functioning order all fire-fighting equipment, fire-alarm and smoke
detection equipment on the Terminal and the Lessee shall at all times maintain
on the Terminal adequate stocks of fresh, usable chemicals for use in such
systems, equipment and apparatus.  The
Lessee shall notify the Port Authority prior to conducting such tests.  If requested by the Port Authority, the
Lessee shall furnish the Port Authority with a copy of written reports of such
tests.


 


(g)           It
is the intention of the parties hereto that noise caused by aircraft engine
operations shall be held to a minimum considering the nature of the Lessee’s
operations.  To this end the Lessee will
conduct its operations in such a manner as to keep the noise produced by
aircraft engines to a minimum and where appropriate shall employ


 


33

















 


noise arresting and noise reducing devices that are suitable.  Aircraft testing and aircraft run-ups will be
conducted only in such areas as shall meet with the prior and continuing
approval of the Port Authority.  The
obligations assumed by the Lessee under this paragraph (g) shall not diminish,
limit, modify or affect all other obligations of the Lessee with respect to
noise under this Agreement.


 


(h)           In
its use of the Premises, the Lessee shall use its best efforts to minimize jet
or prop blast interference to aircraft operating on or to buildings and
structures now located on or which in the future may be located on areas
adjacent to the Premises.  In the event
the Port Authority determines at any time and from time to time that the Lessee
has not so minimized the jet or prop blast interference, it may serve a notice
on the Lessee to such effect and if the condition is not corrected to the
satisfaction of the Port Authority within thirty (30) days after the service of
said notice, the Lessee hereby covenants and agrees to erect and maintain at
its own expense such structure or structures as may be necessary to minimize
the said jet or prop blast interference, subject, however, to the prior written
approval of the Port Authority as to the type, manner and method of
construction.  The obligations assumed
by the Lessee under this paragraph shall not diminish, limit, modify or affect
all other obligations of the Lessee with respect to interference under this
Agreement.


 


(i)            In
addition to compliance by the Lessee with all laws, ordinances, governmental
rules, regulations and orders now or at any time in effect during the term of
the letting hereunder which as a matter of law are applicable to the operation,
use or maintenance by the Lessee of the Terminal or the operations of the
Lessee under this Agreement (the foregoing not to be construed as a submission
by the Port Authority to the application to itself of such requirements or any
of them), the Lessee agrees that it shall exercise the highest degree of safety
and care and shall conduct all its operations under this Lease, operate and
maintain the Terminal and use the Premises in such manner that there will be at
all times a minimum of air pollution, water pollution or any other type of
pollution and a minimum of noise emanating from, arising out of or resulting
from the operation, use or maintenance of the Terminal by the Lessee and from
the operations of the Lessee under this Agreement.  The Port Authority hereby reserves the right from time to time
and at any time during the term of this Lease to require the Lessee, and the
Lessee agrees to design and construct at its sole cost and expense such
reasonable structures, fences, equipment, devices and other facilities as may
be necessary or appropriate to accomplish the objectives as set forth in the
first sentence of this paragraph.  All
locations, the manner, type and method of construction and the size of any of
the foregoing shall be determined by the Port Authority.  The Lessee shall submit for Port Authority
approval its plans and specifications covering the required work and upon
receiving such approval shall proceed diligently to construct the same.  The obligations assumed by the Lessee under
this paragraph shall continue throughout the term of this Lease and shall not
be limited, affected, impaired or in any manner modified by the fact that the
Port Authority shall have approved any construction application and supporting
plans, specifications and contracts covering construction work and
notwithstanding the incorporation therein of the Port Authority’s
recommendations or requirements and notwithstanding that the Port Authority may
have at any time during


 


34

















 


the term of the Lease consented to or approved any particular procedure
or method of operation which the Lessee may have proposed or the Port Authority
may have itself prescribed the use of any procedure or method.  The agreement of the Lessee to assume the
obligations under this paragraph is a special inducement and consideration to
the Port Authority in entering into this Lease with the Lessee.


 


(j)            The
Lessee shall periodically inspect, clean out and maintain the oil separators
serving the Terminal which are located on the Terminal and the oil separators
located outside the Terminal if they exclusively serve the Terminal.


 


Section 9.              Prohibited Acts


 


(a)           The
Lessee shall commit no unlawful nuisance, waste or injury on the Terminal or at
the Airport, and shall not do or permit to be done anything which may result in
the creation or commission or maintenance of such nuisance, waste or injury on
the Terminal or at the Airport.


 


(b)           The
Lessee shall not create nor permit to be caused or created upon the Terminal
any obnoxious odors or smokes, or noxious gases or vapors.  The creation of exhaust fumes by the
operation of the Lessee’s internal-combustion engines or aircraft engines of
other types or automotive equipment, so long as such engines are maintained and
are being operated in a proper manner, shall not be a violation of this
paragraph.


 


(c)           The
Lessee shall not do or permit to be done anything which may interfere with the
effectiveness or accessibility of the drainage and sewerage system, water
system, communications system, underground fuel system, electrical
fire-protection system, sprinkler system, alarm system, fire hydrants and hoses
and other systems, if any, installed or located on, under, or in the Terminal.


 


(d)           The
Lessee shall not do or permit to be done any act or thing upon the Terminal (1)
which will invalidate or conflict with any fire insurance, extended coverage or
rental insurance policies covering the Terminal or any part thereof, or the
Airport, or any part thereof, or (2) which, in the opinion of the Port
Authority, may constitute an extra-hazardous condition, so as to increase the
risks normally attendant upon the operations contemplated by Section 5 hereof
entitled “Use of Premises”.  The Lessee
shall promptly observe, comply with and execute the provisions of any and all
present and future rules and regulations, requirements, orders and directions of
the National Board of Fire Underwriters and the Fire Insurance Rating
Organization of New York, or of any other board or organization exercising or
which may exercise similar functions, which may pertain or apply to the
operations of the Lessee on the Terminal, and the Lessee shall, subject to and
in accordance with the provisions of Section 33 hereof entitled “Other
Construction by the Lessee”, make any and all structural and non-structural
improvements, alterations or repairs of the Terminal that may be required at
any time hereafter by any such present or future rule, regulation, requirement,
order or direction.  If by reason of any
failure on the part of the Lessee to comply with the provisions of this
paragraph any fire insurance rate, extended coverage or rental


 


35

















 


insurance rate on the Terminal or any part thereof, or on the Airport
or any part thereof, shall at any time be higher than it would be if the
Terminal were properly used for the purposes permitted by Section 5 hereof
entitled “Use of Premises”, then the Lessee shall pay to the Port Authority, as
an item of additional rental, that part of all insurance premiums paid by the
Port Authority which shall have been charged because of such violation or
failure by the Lessee.


 


(e)           The
Lessee shall not dispose of nor permit any one to dispose of any waste material
taken from its aircraft (whether liquid or solid) by means of the toilets,
manholes, sanitary sewers or storm sewers in the Terminal except after
treatment in installations or equipment included in plans and specifications
submitted to and approved by the Port Authority.


 


(f)            The
Lessee shall not keep or store during any 24-hour period flammable liquids
within any enclosed portion of the Terminal(other than in rooms or areas
expressly constructed for the storage of such liquids) in excess of the
Lessee’s working requirements during the said 24-hour period.  Any such liquids having a flash point of
less than 110° F. shall be kept and stored in safety containers of a type
approved by the Underwriters Laboratories or the Factory Mutual Insurance
Association.


 


(g)           (1)           The Lessee shall
prevent access by persons or vehicles (unless duly authorized by the Port
Authority) to the Public Landing Area from the Terminal except for aircraft,
which aircraft shall be equipped with radio receivers tuned to control tower
frequencies and adequately manned in accordance with applicable Port Authority
Rules and Regulations.  Such aircraft
may be towed by a motor vehicle equipped with a radio receiver tuned to the
appropriate control tower frequency and adequately manned or such other means
as may be approved by the Port Authority. 
The Lessee shall control access by its passengers and patrons from and
to aircraft ramp, apron and parking areas on the Terminal and shall maintain
control of its passengers and patrons while they are upon said areas by proper
measures to insure that the highest standards of safety are maintained.


 


(2)           The
Lessee hereby assumes full responsibility for the prevention of access to and
control of persons on the aeronautical operations areas of the Terminal and the
prevention of access to the Public Landing Area (other than authorized persons)
and the Lessee shall furnish adequate security and guard service or such
comparable means as approved by the Port Authority from time to time, on a 24
hour, seven day-a-week basis for the prevention of access to and control of
persons on the aeronautical operations areas of the Terminal and the prevention
of access to the Public Landing Area. 
Without limiting the generality of Sections 6 and 7 hereof, the Lessee
acknowledges and agrees that it shall comply, and shall require and ensure that
all other Aircraft Operators using and/or occupying the Terminal comply, with
all the requirements of FAR 107 and any succeeding or superseding regulations


 


(h)           The
Lessee shall not operate any engine or any item of automotive equipment in any
enclosed space on the Terminal unless such space is adequately


 


36

















 


ventilated and unless such engine is equipped with a proper
spark-arresting device which has been approved by the Port Authority.


 


(i)            The
Lessee shall not operate or cause to be operated aircraft engines in any
portions of the Premises other than for the purpose of taxiing aircraft to and
from the Premises or in connection with authorized aircraft maintenance on the
Premises.


 


(j)            The
Lessee shall not perform any aircraft maintenance on the Terminal except that
emergency aircraft maintenance and transit or turn around aircraft maintenance
shall not be deemed to be prohibited by this provision.


 


(k)           The
Lessee shall not keep or store aviation fuel on the Terminal except that
fueling equipment may be operated on the Premises in accordance with the
provisions of the General Airport Agreement covering the underground fuel
system and with the Port Authority Rules and Regulations pertaining thereto.


 


(l)            The
Lessee shall not overload any floor and shall repair any floor, including
supporting members, and any paved area damaged by overloading.  Nothing in this paragraph or elsewhere in
this Agreement shall be or be construed to be a representation by the Port
Authority of the weight any floor or paved area will bear.


 


(m)          The
Lessee shall not use or permit the use of any structural supporting member of
the buildings or roofs or any part thereof for the storage of any material or
equipment, or hoist, lift, move or support any material or equipment or other
weight or load, by means of said trusses or structural supporting members,
without prior approval of the Port Authority.


 


(n)           The
Lessee shall not use any cleaning materials having a harmful corrosive effect,
on any part of the Terminal.


 


(o)           The
Lessee shall not fuel or defuel any equipment in the enclosed portions of the
Terminal without prior approval of the General Manager of the Airport.


 


(p)           The
Lessee shall not dispose of, release or discharge nor permit anyone to dispose
of, release or discharge any Hazardous Substance on the Terminal or at the
Airport.


 


(q)           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 Terminal or in any
streets, ways and walks adjacent or near the Terminal.


 


(r)            The
Lessee agrees that it will not erect, construct or maintain or otherwise create
or continue any obstacle or so park or store any aircraft or other object on
the Premises so as to create any obstacle that will hamper or interfere with
the free, orderly, unobstructed and uninterrupted passage of vehicles, aircraft
or of the wings or


 


37

















 


other integral part of aircraft of any type, nature or description,
while such vehicle is operating or aircraft is taxiing or being transported or
towed along the Runways, Taxiways and roads outside of and adjacent to the
Premises.


 


Section 10.            Care, Maintenance,
Rebuilding and Repair by the Lessee


 


(a)           The
Lessee shall repair, replace, rebuild and paint all or any part of the Terminal
which may be damaged or destroyed by the acts or omissions of the Lessee or by
those of its officers or employees or of other persons on or at the Terminal
with the Lessee’s consent and shall pay to the Port Authority the costs and
expenses of the Port Authority to repair, replace, rebuild and paint all or any
part of the Airport which may be damaged or destroyed by the acts or omissions
of the Lessee or by those of its officers or employees or of other persons on
or at the Terminal with the Lessee’s consent.


 


(b)           The
Lessee shall, throughout the term of this Lease, assume the entire
responsibility and shall relieve the Port Authority from all responsibility for
all repair, rebuilding and maintenance whatsoever in the Premises, and the
Non-Premises Portion of the Terminal (and otherwise off the Premises as
provided below), whether such repair, rebuilding or maintenance be ordinary or
extraordinary, partial or entire, inside or outside, foreseen or unforeseen,
structural or otherwise, and without limiting the generality of the foregoing,
the Lessee shall:


 


(1)           Keep
at all times in a clean and orderly condition and appearance, the Terminal and
all the Lessee’s fixtures, equipment and personal property which are located in
any part of the Terminal which is open to or visible by the general public;


 


(2)           Remove
all snow and ice and perform all other activities and functions necessary or
proper to make the Premises available for use by the Lessee and to make the
Non-Premises Portion of the Terminal available to other Persons;


 


(3)           Take
good care of the Premises and the Non-Premises Portion of the Terminal and
maintain the same at all times in good condition; perform all necessary
preventive maintenance, including but not limited to painting (the exterior of
the Premises and the Non-Premises Portion of the Terminal and areas visible to
the general public to be painted only in colors which have been approved by the
Port Authority); and make all repairs and replacements, and do all rebuilding,
inside and outside, ordinary and extraordinary, partial and entire, foreseen
and unforeseen, structural or otherwise, which repairs, rebuilding and
replacements by the Lessee shall be in quality and class not inferior to the
original in materials and workmanship.


 


(4)           Provide
and maintain all obstruction lights and similar devices on the Premises and the
Non-Premises Portion of the Terminal, and provide and maintain all fire
protection and safety equipment and all other equipment on the Premises and the
Non-Premises Portion of the Terminal of every kind and nature required by any
law, rule, ordinance, resolution or regulation of the type and nature described
in Section 6


 


38

















 


hereof entitled “Compliance with Governmental Requirements” and Section
7 hereof entitled “Rules and Regulations”. The Lessee shall enter into and keep
in effect throughout the term of the Lease a contract or contracts with a
central station alarm company acceptable to the Port Authority to provide
continuous and automatic surveillance of the fire protection system on the
Premises and the Non-Premises Portion of the Terminal.  The Lessee shall insure that all fire alarm
signals with respect to the Premises and the Non-Premises Portion of the
Terminal shall also be transmitted to the Airport’s police emergency alarm
board or to such other location on the Airport as the General Manager of the
Airport may direct.  The Lessee’s
obligations hereunder shall in no way create any obligation whatsoever on the
part of the Port Authority;


 


(5)           Take
such anti-erosion measures and maintain the landscaping at all times in good
condition, including but not limited to periodic replanting, as the Port
Authority may require, and perform and maintain such other landscaping with
respect to all portions of the Premises and the Non-Premises Portion of the
Terminal not paved or built upon as the Port Authority may require;


 


(6)           Be
responsible for the maintenance and repair of all utility service lines,
including but not limited to, service lines for the supply of water, electric
power and telephone conduits and lines, sanitary sewers and storm sewers,
located upon the Premises and the Non-Premises Portion of the Terminal or
located adjacent to the Premises and the Non-Premises Portion of the Terminal
and exclusively serving the Terminal;


 


(7)           Be
responsible for the maintenance and repair of any damage to the paving or other
surface of the Premises and the Non-Premises Portion of the Terminal caused by
any oil, gasoline, grease, lubricants or other flammable liquids and substances
having a corrosive or detrimental effect thereon;  and


 


(8)           Be
responsible for all paving, lighting, signage, storm drains, culverts, cables,
supporting structures, cleaning and snow removal in connection with existing
and future access roadways which are located off of the Premises and serve the
Terminal exclusively.


 


(c)           In
the event the Lessee fails to commence maintenance, cleaning, repairing,
replacing, rebuilding or painting as required by paragraphs (a) and (b) of this
Section within a period of twenty (20) days after notice from the Port
Authority so to do in the event that the said notice specifies that the
required work to be accomplished by the Lessee includes maintenance and/or
repair other than preventive maintenance; or within a period of one hundred
eighty (180) days if the said notice specifies that the work to be accomplished
by the Lessee involves preventive maintenance only, or fails diligently to
continue to completion the repair, replacement, rebuilding or painting of all
of the Premises and the Non-Premises Portion of the Terminal required to be
repaired, replaced, rebuilt or painted by the Lessee under the terms of this
Agreement, the Port Authority may, at its option, and in addition to any other
remedies which may be available to it, repair, replace, rebuild or paint all or
any part of the Premises and the Non-Premises 


 


39

















 


Portion of the Terminal included in the said notice, and the cost
thereof shall be payable by the Lessee upon demand.


 


(d)           Notwithstanding
the terms and conditions of Section 5 of this Lease entitled “Use of Premises”,
paragraph (d) of Section 8 of this Lease entitled “Various Obligations of the
Lessee” and this Section, it is hereby agreed and understood, the Lessee shall
have no right nor obligation to operate, control, maintain, rebuild or repair
(i) the traffic signaling system located on the roadway frontage of the
Terminal and the roadways located off the Terminal and generally consists of
traffic lights and signals and associated wiring and control panels, or (ii)
the variable message sign system located on the roadway frontage of the
Terminal and the roadways located off the Terminal and generally consists of
message signs, lights, wiring and control panels (which traffic signaling
system and variable message sign system are hereinafter collectively called the
“Traffic Systems”), provided, however, the Lessee shall pay to the Port
Authority as additional rent all costs and expenses to repair, replace and
rebuild all or any portion of the Traffic Systems which may be damaged or
destroyed by the acts or omissions of the Lessee or by those of its officers or
employees or of other Persons on or at the Terminal.  Further, the Port Authority shall not have any obligation
hereunder or otherwise to operate, maintain, control or continue the operation
of the Traffic Systems and may at any time and from time to time discontinue
the operation of any or all of the Traffic Systems and/or disable such Traffic
Systems and/or remove them from the Terminal and from the roadways located off
of the Terminal.  The Port Authority
shall have the right at its sole discretion to modify, replace and substitute
the Traffic Systems with identical or different systems as the Port Authority
shall elect and to operate and control the Traffic Systems, including without
limitation, to determine the content of and to place messages on the variable
message system and to determine the operating mode of the traffic signaling
system.


 


(e)           If
the performance of any of the foregoing repair, maintenance, replacement,
repainting or rebuilding obligations of the Lessee requires work to be
performed near an active taxiway or taxilane or where safety of operations is
involved, the Lessee agrees, unless otherwise permitted by the Port Authority
in writing, that it will, at its own expense, post guards or take such other
appropriate measures as may be directed by the General Manager of the Airport
to insure the safety of the work performed thereat.


 


Section 11.            Insurance


 


(a)           The
Lessee shall, during the term of this Agreement, insure and keep insured to the
extent of 100% of the replacement value thereof, the entire Terminal and all
other buildings, structures, improvements, installations, facilities and
fixtures now or in the future located on the Terminal against all risks of
physical loss or damage (including, but not limited to flood and earthquake
risks), if available, and if not available, then against such hazards and risks
as may now or in the future be included under the Standard Form of Fire
Insurance Policy of the State of New York and also against damage or loss by
windstorm, cyclone, tornado, hail, explosion, riot, civil


 


40

















 


commotion, aircraft, vehicles and smoke, under the Standard Form of
Fire Insurance Policy of the State of New York and the form of extended
coverage endorsement prescribed as of the effective date of the said insurance
by the rating organization having jurisdiction, and if the Port Authority so
requests, also covering contamination hazards and risks and boiler and
machinery hazards and risks in a separate insurance policy or policies or as an
additional coverage endorsement to the aforesaid policies in the form as may
now or in the future be prescribed as of the effective date of said insurance
by the rating organization having jurisdiction and/or the Superintendent of
Insurance of the State of New York and the Lessee shall furthermore provide
additional insurance covering any other peril of loss or damage that the Port
Authority at any time during the term of this Agreement covers by carrier or
self-insurance covered by appropriate reserves at other locations at the
Airport upon five (5) days written notice to the Lessee to such effect.


 


(b)           The
aforesaid insurance coverages and renewals thereof shall insure the Port
Authority, the Lessee and the City of New York, as insureds, as their interests
may appear, and shall provide that the loss, if any, shall be adjusted with and
payable to the Port Authority.


 


(c)           In
the event the Terminal or any part thereof shall be damaged by any casualty
against which insurance is carried pursuant to this Section, the Lessee shall
promptly furnish to the Port Authority such information and data as may be
necessary to enable the Port Authority to adjust the loss.


 


(d)           The
policies or certificates representing insurance covered by this Section shall,
if not already delivered, shall be delivered by the Lessee to the Port
Authority prior to the Effective Date and the policies or certificates
representing the insurance covered by Section 2(c)(12) hereof entitled
“Construction by the Lessee” shall be delivered by the Lessee to the Port
Authority prior to the commencement of any Construction Work and each policy or
certificate delivered shall bear the endorsement of or be accompanied by
evidence of payment of the premium thereon, and also shall contain a valid
provision obligating the insurance company to furnish the Port Authority and
the City of New York ten (10) days’ advance notice of the cancellation,
termination, change or modification of the insurance evidenced by said policy
or certificate.  Renewal policies or
certificates shall be delivered to the Port Authority at least ten (10) days
before the expiration of the insurance which such policies are to renew.


 


(e)           Regardless,
however, of the Persons whose interests are insured, the proceeds of all
policies covered by this Section shall be applied as provided in Section 12
hereof entitled “Damage to or Destruction of the Terminal”; and the word
“insurance” and all other references to insurance in said Section 12 shall be
construed to refer to the insurance which is the subject matter of this
Section, and to refer to such insurance only.


 


(f)            The
insurance covered by this Section and by Section 2(c)(12) hereof entitled
“Construction by the Lessee” shall be written by companies approved by the Port
Authority, the Port Authority covenanting and agreeing not to withhold its


 


41

















 


approval unreasonably.  If at
any time any of the insurance policies shall be or become unsatisfactory to the
Port Authority as to form or substance or if any of the carriers issuing such
policies shall be or become unsatisfactory to the Port Authority, the Lessee
shall promptly obtain a new and satisfactory policy in replacement, the Port
Authority covenanting and agreeing not to act unreasonably hereunder.  If at any time the Port Authority so requests,
a certified copy of each of said policies shall be made available by the Lessee
to the Port Authority for inspection and reproduction at an office of the
Lessee within the Port of New York District.


 


Section
12.            Damage to or
Destruction of the Terminal


 


(a)           Removal
of Debris.  If the Terminal or any
part thereof, shall be damaged by fire, the elements, the public enemy or other
casualty, the Lessee shall promptly remove all debris resulting from such
damage from the Terminal, and to the extent, if any, that the removal of debris
under such circumstances is covered by insurance, the proceeds thereof shall be
made available to and be used by the Lessee for such purpose.


 


(b)           Minor
Damage.  If the Terminal or any part
thereof, shall be damage by fire, the elements, the public enemy or other casualty
but not rendered untenantable or unusable for a period of ninety (90) days, the
Terminal shall be repaired with due diligence in accordance with the plans and
specifications for the Terminal as they existed prior to such damage by and at
the expense of the Lessee and if such damage is covered by insurance the
proceeds thereof shall be made available to and be used by the Lessee for that
purpose.


 


(c)           Major
Damage to or Destruction of the Terminal. 
If the Terminal or any part thereof, shall be destroyed or so damaged by
fire, the elements, the public enemy or other casualty as to be untenantable or
unusable for ninety (90) days, or if within ninety (90) days after such damage
or destruction the Lessee notifies the Port Authority in writing that in the
Lessee’s opinion said Terminal, as the case shall be, will be untenantable or
unusable for at least ninety (90) days then the Lessee shall proceed with due
diligence to make the necessary repairs or replacements to restore the Terminal
in accordance with the plans and specifications for the Terminal as the same
existed prior to such damage or destruction; or with the approval in writing of
the Port Authority make such other repairs, replacements or changes as may be
desired by the Lessee.  If such destruction
or damage was covered by insurance, the proceeds thereof shall be made
available to and used by the Lessee for such restoration.


 


(d)           The
obligation of the Lessee to repair or replace shall be limited to the amount of
the insurance proceeds provided the Lessee has carried insurance to the extent
and in accordance with Section 11 hereof entitled “Insurance”.  Any excess of the proceeds of insurance over
the costs of the restoration shall be retained by the Port Authority.


 


42

















 


(e)           The
parties hereby stipulate that neither the provisions of Section 227 of the Real
Property Law of New York nor those of any other similar statute shall extend or
apply to this Agreement.


 


Section 13.            Indemnity and
Liability Insurance


 


(a)           (1)           The Lessee shall
indemnify and hold harmless the Port Authority, its Commissioners, officers,
employees and representatives, from and against (and shall reimburse the Port
Authority for the Port Authority’s costs and expenses including legal expenses,
whether those of the Port Authority’s Law Department or otherwise, incurred in
connection with the defense of) all claims and demands of third Persons
including, but not limited to, claims and demands for death or personal
injuries, or for property damages, arising out of a breach or default by the
Lessee of 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 other acts or omissions of the Lessee, its officers, employees, guests,
representatives, customers, contractors, invitees or business visitors on the
Terminal, or arising out of the acts or omissions of the Lessee, its officers
and employees elsewhere at the Airport (excepting only claims and demands
arising from the sole negligence of the Port Authority), including claims and
demands of the City of New York from which the Port Authority derives its
rights in the Airport, for indemnification, arising by operation of law or
through agreement of the Port Authority with the said City.


 


(2)           If
so directed, the Lessee shall at its own expense defend any suit based upon any
such claim or demand (even if such 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 provisions of any statutes respecting suits against the Port Authority.


 


(b)           (1)           In addition to the
obligations set forth in paragraph (a) of this Section and all other insurance required
under this Agreement, the Lessee during the term of this Agreement in its own
name as insured and including the Port Authority as an additional insured
including without limitation for premises-operations and completed operations,
shall maintain and pay the premiums on a policy or policies of Commercial
General Liability Insurance, including premises-operations, products, completed
operations, liquor liability and covering bodily injury, including death, and
property damage liability, broadened to include or equivalent separate policies
covering aircraft liability, none of the foregoing to contain care, custody or
control exclusions, and providing for coverage in the limits set forth below,
and Commercial Automobile Liability Insurance covering owned, non-owned and
hired vehicles and automatically covering newly acquired vehicles in not less
than the minimum limit set forth below and in lieu of the foregoing
requirements pertaining to care, custody or control exclusions Baggage Legal
Liability Insurance providing for coverage in not less than the limit set


 


43

















 


forth below.  Each of the said
policy or policies of insurance shall also provide or contain an endorsement
providing that the protections afforded the Lessee thereunder with respect to
any claim or action against the Lessee by a third Person shall pertain and
apply with like effect with respect to any claim or action against the Lessee
by the Port Authority and any claim or action against the Port Authority by the
Lessee as though the Port Authority were a named insured but such endorsement
shall not limit, vary, change, or affect the protection afforded the Port
Authority thereunder as an additional insured. 
In addition, the said policy or policies of Commercial General Liability
Insurance shall also provide or contain a contractual liability endorsement
covering the obligations assumed by the Lessee under paragraph (a) hereof,
Section 1 hereof entitled “Letting”, 
Section 29 hereof entitled “Removal of Property”, Section 30 hereof
entitled “Brokerage”, Section 56 hereof entitled “Environmental Obligations”,
Section 61 hereof entitled “Storage Tanks” and paragraph (d) of Section 62
hereof entitled “Non-Discrimination”.


 


	
   

  	
   

  	
  Minimum
  Limits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commercial General Liability  

  Combined single limit per

  occurrence for death, bodily injury

  and property damage liability: 

  	
   

  	
  $

  	
   100,000,000.00 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commercial Automobile Liability
(covering owned, non-owned and hired vehicles)

  Combined single limit per occurrence

  for death, bodily injury and property

  damage liability: 

  	
   

  	
  $

  	
   25,000,000.00 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Baggage Legal Liability

  	
   

  	
  $

  	
   10,000,000.00

  	
   

  



 


(2)           The
Lessee shall also procure and maintain in effect, or cause to be procured and
maintained in effect, Workers’ Compensation Insurance and Employer’s Liability
Insurance in accordance with and as required by law and including coverage for
asbestos exposure.


 


(3)           In
addition to all other policies of insurance required under this Lease, the
Lessee shall also procure and maintain throughout the term of the letting under
this Lease (including any and all extensions) Business Interruption Insurance
in such amounts as shall be at least sufficient to cover, and applicable to,
all fees, charges and other payments that are payable by the Lessee to the Port
Authority under this Lease for a period of not less than three (3) years for
any business interruption loss or losses in business revenue that occur when
the Terminal or any portion thereof, is unusable or is out of operation due to
a fire or for any other risks or hazards that are normally covered under a
standard form of “All Risk” policy.


 


44

















 


(4)           Without
limiting the provisions hereof, in the event the Lessee maintains the foregoing
insurance in limits greater than aforesaid, the Port Authority shall be
included therein as an additional insured to the full extent of all such
insurance in accordance with the terms and provisions hereof.


 


(c)           Notwithstanding
the foregoing, it is specifically understood and agreed that the Port Authority
shall have the right upon notice to the Lessee given from time to time and at
any time to require the Lessee to increase any or all of the foregoing limits
to commercially reasonable amounts and the Lessee shall promptly comply
therewith and shall promptly submit a certificate or certificates evidencing
the same to the Port Authority.


 


(d)           As
to the insurance required by the provisions of this Section and Section
2(c)(11) hereof entitled “Construction by the Lessee”, a certified copy of each
of the policies or a certificate or certificates evidencing the existence
thereof, or binders, shall be delivered to the Port Authority.  As to insurance required by this Section,
delivery shall be made before the Effective Date and as to insurance required
by Section 2(c)(11) hereof entitled “Construction by the Lessee”, delivery
shall be made at least thirty (30) days prior to the commencement of any
Construction Work.  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. 
Each such copy or certificate shall contain a valid provision or
endorsement that the policy may not be cancelled, terminated, changed or
modified without giving fifteen (15) days’ written advance notice thereof to
the Port Authority.  Each such copy or
certificate shall contain an additional endorsement providing that the
insurance carrier 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.  Any renewal policy shall be delivered to the
Port Authority at least fifteen (15) days prior to the expiration of each
expiring policy, except for any policy expiring after the date of expiration of
the term of this Agreement.  The
aforesaid insurance shall be written by a company or companies approved by the
Port Authority, the Port Authority agreeing not to withhold its approval
unreasonably.  If at any time any of the
insurance policies shall be or become unsatisfactory to the Port Authority as
to the form or substance or if any of the carriers issuing such policies shall
be or become unsatisfactory to the Port Authority, the Lessee shall promptly
obtain a new and satisfactory policy in replacement, the Port Authority
covenanting and agreeing not to act unreasonably hereunder.  If the Port Authority at any time so
requests, a certified copy of each of the policies shall be made available by
the Lessee to the Port Authority for inspection and reproduction at an office
of the Lessee within the Port of New York District.


 


45

















 


Section 14.            Signs


 


(a)           Except
with the prior written approval of the Port Authority, the Lessee shall not
erect, maintain or display any signs or advertising at or on the exterior parts
of the Terminal or in the Terminal so as to be visible from outside the
Terminal or at or on any other portion of the Airport outside the Terminal.  Interior signs affecting public safety and
security shall be in accordance with established Port Authority standards.


 


(b)           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 on the Terminal or elsewhere on the Airport and in connection
therewith shall restore the portion of the Terminal and the Airport affected by
such signs or advertising to the same condition as existing prior to the
installation of such signs and advertising. 
In the event of a failure on the part of the Lessee so to remove,
obliterate or paint out each and every such sign or advertising and so to
restore the Terminal and the Airport, the Port Authority may perform the
necessary work and the Lessee shall pay the cost thereof to the Port Authority
on demand.


 


Section
15.            Obstruction Lights


 


The Lessee shall install, maintain and operate at its own expense such
obstruction lights on the Terminal as the Federal Aviation Administration may
direct or as the General Manager of the Airport may reasonably direct, and
shall energize such lights daily for a period commencing thirty (30) minutes
before sunset and ending thirty (30) minutes after sunrise (as sunset and
sunrise may vary from day to day throughout the year) and for such other period
as may be directed or requested by the control tower of the Airport.


 


Section 16.            Additional Rent and
Charges


 


If the Port Authority has paid any sum or has incurred any obligations
or expenses (including without limitation payments to third Persons and
internal Port Authority costs and expenses) which the Lessee has agreed to pay
or reimburse the Port Authority for or if the Port Authority is required or
elects to pay any sum or sums or incurs any obligations or expense (including
without limitation payments to third Persons and internal Port Authority costs
and expenses)  by reason of the failure,
neglect or refusal of the Lessee to perform or one or more of the conditions,
covenants or agreements contained in this Agreement or as a result of an act or
omission of the Lessee contrary to the said conditions, covenants and
agreements, the Lessee agrees to pay the sum or sums so paid or the expense 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 rent as set forth in Section 4 hereof entitled “Rental”.


 


46

















 


Section
17.            Rights of Entry
Reserved


 


(a)           The
Port Authority, by its officers, employees, agents, representatives and contractors
shall have the right at all reasonable times 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 otherwise.


 


(b)           Without
limiting the generality of the foregoing, the Port Authority, by its officers,
employees, agents, representatives, and contractors, and furnishers of utilities
and other services, shall have the right, for its own benefit, for the benefit
of the Lessee, or for the benefit of others than the Lessee at the Airport, to
maintain existing and future utility, mechanical, electrical and other systems
and to enter upon the Terminal at all reasonable times to make such repairs,
replacements or alterations 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 or under the Terminal new systems or parts thereof, and to use the
Terminal for access to other parts of the Airport otherwise not conveniently
accessible; provided, however, that in the exercise of such rights of access,
repair, alteration or new construction the Port Authority shall not
unreasonably interfere with the use and occupancy of the Terminal by the
Lessee.


 


(c)           (1)           Further, without
limiting the generality of this Section, the Port Authority, by its officers,
employees, agents, representatives and contractors and furnishers of service
shall have the right, for its own benefit, for the benefit of the Lessee, or
for the benefit of others than the Lessee at the Airport to maintain the
portions of the Distribution Portion of the System, the Traffic Systems and the
Cogeneration Facility located under or on the Terminal and to enter upon the
Terminal at all times to make such repairs, replacements or alterations to the
Distribution Portion of the System, the Traffic Systems and the Cogeneration
Facility as may, in the opinion of the Port Authority, be deemed necessary or
desirable and, from time to time to construct or install over, in or under the
Terminal additions or extensions to said Distribution Portion of the System,
the Traffic Systems and the Cogeneration Facility; provided, however, that in
the exercise of such rights of access, repair, alteration or new construction
the Port Authority shall not unreasonably interfere with the use and occupancy
of the Premises by the Lessee pursuant to the provisions of this Agreement.


 


(2)           Neither
the Distribution Portion of the System, the AirTrain, the Traffic Systems or
the Cogeneration Facility nor any part of any of the foregoing shall be or be
deemed to be a part of the Premises under the Lease.


 


(d)           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 and other systems, the foregoing to
include without limitation the Distribution Portion of the System, the
AirTrain, the Traffic Systems and the Cogeneration Facility, and thus shall
interfere with the inspection, maintenance or


 


47

















 


repair of any such system, the Lessee shall move such property, as directed
by the Port Authority, in order that the access may be had to the system or
part thereof for its inspection, maintenance or repair, and, if the Lessee
shall fail to so move such property after direction from the Port Authority to
do so, the Port Authority may move it and the Lessee hereby agrees to pay the
cost of such moving upon demand.


 


(e)           Nothing
in this Section shall or shall be construed to impose upon the Port Authority
any obligations so to construct or maintain or to make repairs, replacements,
alterations or additions, or shall create any liability for any failure so to
do.  The Lessee is and shall be in
exclusive control and possession of the Premises and the Port Authority shall
not in any event be liable for any injury or damage to any property or to any
Person happening on or about the Premises nor for any injury or damage to the
Premises nor to any property of the Lessee or of any other Person located in or
thereon (other than those occasioned by the affirmative acts of the Port Authority,
its employees, agents and representatives).


 


(f)            At
any time and from time to time during ordinary business hours within the six
(6) months immediately preceding the expiration of the letting, the Port
Authority, for and by its agents and employees, whether or not accompanied by
prospective lessees, occupiers or users of the Premises and/or the Terminal,
shall have the right to enter thereon for the purpose of exhibiting and viewing
all parts of the same.


 


(g)           If,
during the last month of the letting, the Lessee shall have removed all its
property from the Premises, the Port Authority may immediately enter and alter,
renovate and redecorate the Premises and if, during the last month of the
letting, the Lessee shall have removed substantially all its property from the
Premises, the Port Authority, upon receipt of the Lessee’s written approval,
may immediately enter and alter, renovate and redecorate the Premises.


 


(h)           The
exercise of any or all of the foregoing rights by the Port Authority or others
shall not be or be construed to be an eviction of the Lessee nor be made the
grounds for any abatement of rental nor any claim or demand for damages,
consequential or otherwise.


 


Section 18.            Condemnation


 


(a)           In
any action or other proceeding by any governmental agency or agencies for the
taking for a public use of any interest in all or 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 a “Taking”), 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 (except the possible claim to an award for loss
of the Lessee’s removable fixtures), it being understood and agreed between the
Port Authority and the Lessee that the Port Authority shall be entitled to all


 


48

















 


compensation or awards made or to be made or paid, and all such
consideration or rental, free of any claim or right of the Lessee.


 


(b)           In
the event that all or any portion of the Premises is required by the Port
Authority to comply with any present or future governmental law, rule,
regulation, requirement, order or direction, the Port Authority may by notice
given to the Lessee terminate the letting with respect to all or such portion
of the Premises so required.  If the
Port Authority so elects to terminate all or such portion of the Premises so
required it shall give the Lessee written notice to such effect.  Such termination shall be effective on the
date specified in the notice.  The
Lessee hereby agrees to deliver possession of all or such portion of the
Premises so required upon the effective date of such termination in the same
condition as that required for the delivery of the Premises upon the date originally
fixed by this Agreement for the expiration of the term of the letting.  No Taking by or conveyance to any
governmental authority as described in paragraph (a) of this Section, nor any
delivery by the Lessee nor Taking by the Port Authority pursuant to this
paragraph, shall be or be construed to be an eviction of the Lessee or a breach
of this Agreement or to be made the basis of any claim by the Lessee against
the Port Authority for damages, consequential or otherwise.


 


(c)           In
the event that the Taking covers the entire Premises, or in the event that the
letting is terminated with respect to the entire Premises pursuant to paragraph
(b) of this Section, then this Agreement shall, as of the date possession is
taken by such agency or agencies from the Port Authority, or as of the
effective date of such termination, cease and determine in the same manner and
with the same effect as if the date were the original date of expiration
hereof.


 


(d)           In
the event that the Taking covers a part only of the Premises, or in the event
that the letting is terminated pursuant to paragraph (b) of this Section with
respect to a part only of the Premises, then the letting as to such part shall,
as of the date possession thereof is taken by such agency or agencies, or as of
the effective date of such termination, cease and determine in the same manner
and with the same effect as if the term of the letting had on that date
expired, and the rentals shall be abated as hereinbefore provided in Section 4
hereof.


 


(e)           In
the event that the Taking covers only a Material Part (as hereinafter defined)
of the Premises, then the Lessee and the Port Authority shall each have an
option exercisable by notice given within ten (l0) days after the effective
date of such Taking to terminate the letting hereunder with respect to the
Premises not taken, as of the date of such Taking, and such termination shall
be effective as of the date of such Taking were the original date of expiration
hereof.  If the letting of the entire
Premises is not terminated, the settlement or abatement of rentals after the
date possession is taken by the body having a superior power of eminent domain
shall be in accordance with Section 4 hereof.


 


49

















 


(f)            As
used in this Section with reference to the Premises “Material Part” shall mean
such a part of the Premises that the Lessee cannot continue to carry on its
normal operations hereunder without using such part.


 


Section
19.            Assignment and
Sublease


 


(a)           Except
as set forth in paragraph (c) of this Section, the Lessee covenants and agrees
that it will not sell, convey, transfer, mortgage, pledge or assign this
Agreement or any part thereof, or any rights created thereby or the letting
thereunder or any part thereof without the prior written consent of the Port
Authority.


 


(b)           (1)           The Lessee shall not
sublet the Premises or any part thereof, without the prior written consent of
the Port Authority.


 


(2)           (i)            “Affiliated
Scheduled Aircraft Operator” shall mean a corporation that is a Scheduled
Aircraft Operator and all of the stock of such Scheduled Aircraft Operator is
owned by the Lessee.


 


(ii)           Notwithstanding any provision of this Lease
and in addition thereto, and without the requirement for any permit, consent to
sublease or other use agreement from the Port Authority, the Port Authority
hereby grants its consent to the use of the Premises by an Affiliated Scheduled
Aircraft Operator, such use being without payment of the Port Authority fees
for such use, in accordance with the terms and conditions of the Lease for so
long as the Affiliated Scheduled Aircraft Operator is a wholly-owned subsidiary
of the Lessee by virtue of the fact that the Lessee is the absolute and
unconditional owner of all the issued and outstanding capital stock of said
Affiliated Scheduled Aircraft Operator. 
In the event said Affiliated Scheduled Aircraft Operator shall cease to
be a wholly-owned subsidiary of the Lessee, the Lessee shall immediately so
inform the Port Authority and thereafter a document or documents shall be
prepared by the Port Authority and sent to the Lessee for execution by the
Lessee and said Affiliated Scheduled Aircraft Operator which document(s) shall
include, among other things, the right of said Affiliated Scheduled Aircraft
Operator to continue to use the Premises on the terms and conditions of the
Lease, and the joint and several obligation of the Lessee and said Affiliated
Scheduled Aircraft Operator to pay to the Port Authority the then appropriate
Port Authority fees therefore.


 


(iii)        It is specifically understood and agreed that
any sublease or other agreement or arrangement (hereinafter called the
“Affiliated Scheduled Aircraft Operator Arrangement”) covering an Affiliated
Scheduled Aircraft Operator’s use and/or occupancy of the Premises shall be for
a term expiring no later than the day before the expiration date of this
Agreement and shall provide that the portion of the Premises to be used by the
Affiliated Scheduled Aircraft Operator shall be used solely for the purposes set
forth in Section 5 hereof.  Each
Affiliated Scheduled Aircraft Operator Arrangement shall


 


50

















 


also provide, in accordance with Section 49 hereof, that the term of
the Affiliated Scheduled Aircraft Operator Arrangement shall immediately
terminate and Affiliated Scheduled Aircraft Operator shall become a tenant at
sufferance in the event of a termination of the term of the Lease and the
Lessee becomes a holdover tenant on a month-to-month periodical tenancy
pursuant to said Section 49 or otherwise.


 


(iv)        Without limiting any rights or remedies of the
Port Authority or obligations of an Affiliated Scheduled Aircraft Operator, the
Lessee hereby assumes all risks and responsibilities for each Affiliated Scheduled
Aircraft Operator’s operations at the Airport including without limitation the
payment of fees and charges payable by said Affiliated Scheduled Aircraft
Operator to the Port Authority and the Lessee hereby agrees that all acts and
omissions of said Affiliated Scheduled Aircraft Operator at the Airport shall
be and be deemed to be acts and omissions of the Lessee.  Without limiting the generality of the
foregoing or any other term or provision of this Agreement, the failure of an
Affiliated Scheduled Aircraft Operator to comply with any agreement, term,
covenant or condition of the Lease shall be and be deemed to be a failure of
the Lessee to have complied with such agreement, term, covenant or condition
and further the Lessee shall indemnify and hold harmless the Port Authority,
its Commissioners, officers, employees and representatives, from and against
(and shall reimburse the Port Authority for the Port Authority’s costs and
expenses, whether those of the Port Authority’s Law Department or otherwise, including
legal expenses incurred in connection with the defense of) all claims and
demands of third Persons including but not limited to claims and demands for
death or personal injuries, or for property damages, arising out of a breach or
default of any term or provision of this Agreement by each Affiliated Scheduled
Aircraft Operator, or out of the use or occupancy of the Premises by each
Affiliated Scheduled Aircraft Operator or by others with its consent, or out of
any other acts or omissions of each Affiliated Scheduled Aircraft Operator, its
officers, employees, guests, representatives, customers, contractors, invitees
or business visitors on the Premises, or arising out of the acts or omissions
of each Affiliated Scheduled Aircraft Operator, its officers and employees
elsewhere at the Airport, including claims and demands of the City of New York,
from which the Port Authority derives its rights in the Airport, for
indemnification, arising by operation of law or through agreement of the Port
Authority with the said City.  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.


 


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(c)           If
without the prior written consent of the Port Authority, the Lessee assigns,
sells, conveys, transfers, mortgages, pledges or sublets in violation of
paragraphs (a) or (b) of this Section or if the Premises are occupied by
anybody other than the Lessee, the Port Authority may collect rent from any
assignee, sublessee or anyone who claims a right under this Agreement or
letting or who occupies the Premises, and the Port Authority shall apply the
net amount collected to the rental herein reserved; but no such collection
shall be deemed a waiver by the Port Authority of the covenants contained in
paragraphs (a) and (b) of this Section or an acceptance by the Port Authority
of any such assignee, sublessee, claimant or occupant as Lessee, nor a release
of the Lessee by the Port Authority from the further performance by the Lessee
of the covenants contained herein.


 


(d)           Any
consent granted by the Port Authority to any assignment or subletting to any
sublease pursuant to the provisions hereof shall not be construed or deemed to
release, relieve or discharge any succeeding assignee, successor or transferee
of the Lessee or any other Person claiming any right, title or interest in this
Agreement from the requirement of obtaining the prior written consent of the
Port Authority in the event it wishes to sell, convey, transfer, mortgage,
pledge, sublet or assign this Agreement or any part thereof, or any rights
created thereby or the letting hereunder or any part thereof, or any rights
created thereby without such prior written consent of the Port Authority.


 


(e)           The
Port Authority shall not assign or otherwise transfer this Lease or any of its
rights hereunder (i) to any private Person without written consent duly
executed by the Lessee; or (ii) to the City of New York, unless the City of New
York at the time of such assignment or transfer assumes the obligations of the
Port Authority under this Lease.


 


(f)            The
Lessee shall not use or permit any Person to use the Premises or any portion
thereof for any purpose other than the purposes stated in Section 5 hereof
entitled “Use of Premises”.  Except as
provided in this Agreement or otherwise permitted in writing by the Port
Authority, the Lessee shall not permit the Premises to be used or occupied by
any Person other than its own officers, employees, passengers, contractors and
representatives.


 


Section
20.            Termination by the
Port Authority


 


(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


 


52

















 


any state thereof, or consent to the appointment of a receiver,
trustee, or liquidator of all or substantially all of its property; or


 


(2)           By
order or decree of a court the Lessee shall be adjudged bankrupt or an order
shall be made approving a petition filed by any of its creditors or 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 any state thereof, provided that if any such
judgment, order or degree is stayed or vacated within sixty (60) days after the
entry thereof, any notice of cancellation shall be and become null, void and of
no effect; or


 


(3)           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
having jurisdiction, a receiver, trustee, or liquidator shall take possession
or control of all or substantially all of the property of the Lessee, and such
possession or control shall continue in effect for a period of sixty (60) days;
or


 


(4)           The
Lessee shall voluntarily abandon, desert or vacate the Premises or discontinue
its operations at the Airport, or after exhausting or abandoning any right of
further appeal, the Lessee because of an act or omission of the Lessee, shall
be prevented for a period of thirty (30) days by action of any Governmental
Agency other than the Port Authority having jurisdiction thereof, from
conducting its operations at the Airport; or


 


(5)           Any
lien is filed against the Terminal because of any act or omission of the Lessee
and shall not be removed, discharged or bonded within thirty (30) days after
the Lessee has received notice thereof; or


 


(6)           The
letting hereunder or the interest or estate of the Lessee under this Agreement
shall be transferred directly by the Lessee or shall pass to or devolve upon,
by operation of law or otherwise, any other Person, firm or corporation; or


 


(7)           A
petition under any part of the federal bankruptcy laws or an action under any
present or future insolvency law or statute shall be filed against the Lessee
and shall not be dismissed within ninety (90) days after the filing thereof; or


 


(8)           If
a corporation, shall, without the prior written approval of the Port Authority,
become a possessor or merged corporation in a merger, a constituent corporation
in a consolidation, or a corporation in dissolution; or


 


(9)           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 shall continue in
its failure to pay rentals or to make any other payments required hereunder for
a period of twenty (20) days after receipt of notice by it from the Port
Authority to make such payments; or


 


53

















 


(10)         The
Lessee shall fail to keep, perform and observe each and every other promise,
covenant and agreement set forth in this Agreement on its part to be kept,
performed, or observed, within thirty (30) days after receipt of notice of
default thereunder from the Port Authority (except where fulfillment of its
obligation requires activity over a period of time, and the Lessee shall have
commenced to perform whatever may be required for fulfillment within thirty
(30) days after receipt of notice and continues such performance without
interruption except for causes beyond its control);


then upon the occurrence of any such event or at any time thereafter
during the continuance thereof, the Port Authority may upon twenty (20) days’
notice terminate the rights of the Lessee hereunder and 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)           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.


 


(c)           No
failure by the Port Authority to insist upon the strict performance of any
agreement, term, covenant or condition of the Lease or to exercise any right or
remedy consequent upon a breach or default thereof, and no extension, supplement
or amendment of the Lease during or after a breach thereof, unless expressly
stated to be a waiver, and no acceptance by the Port Authority of rentals,
fees, charges or other payments in whole or in part after or during the
continuance of any such breach or default, shall constitute a waiver of any
such breach or default of such agreement, term, covenant or condition.  No agreement, term, covenant or condition of
the Lease to be performed or complied with by the Lessee, and no breach or
default thereof, shall be waived, altered or modified except by a written
instrument executed by the Port Authority. 
No waiver by the Port Authority of any default or breach on the part of
the Lessee in performance of any agreement, term, covenant or condition of this
Lease shall affect or alter the Lease, but each and every agreement, term,
covenant and condition thereof shall continue in full force and effect with
respect to any other then existing or subsequent breach or default thereof.


 


Section
21.            Rights of Re-entry


 


The Port Authority shall, as an additional remedy upon the giving of a
notice of termination as provided in Section 20 hereof entitled “Termination by
the Port Authority” or any other Section hereof, have the right to re-enter the
Premises and every part thereof upon the effective date of termination without
further notice of any kind, and may regain and resume possession either with or
without the institution of summary or any other legal proceedings or
otherwise.  Such re-entry, or regaining
or resumption of possession, however, shall not in any manner affect, alter or
diminish any of the obligations of the Lessee under this Agreement, and shall
in no event constitute an acceptance of surrender.


 


54

















 


Section
22.            Waiver of
Redemption


 


The Lessee hereby waives any and all rights to recover or regain
possession of the Premises and all rights of redemption, granted by or under
any present or future law in the event it is evicted or dispossessed for any
cause, or in the event the Port Authority obtains possession of the Premises in
any lawful manner.


 


Section
23.            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 Section 20 hereof entitled “Termination by
the Port Authority”, or the interest of the Lessee canceled 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 Section 21
hereof entitled “Right of Re-entry”, all the obligations of the Lessee under
this Agreement shall survive such termination or cancellation, or re-entry,
regaining or resumption of possession and shall remain in full force and effect
for the full term or the letting under this Agreement, and the amount or
amounts of damages or deficiency shall become due and payable 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.  The Port
Authority may maintain separate actions each month to recover the damage or
deficiency then due or at its option and at any time may sue to recover the
full deficiency less the proper discount, for the entire unexpired term.


 


(b)           The
amount of damages for rentals for the period of time subsequent to termination
or cancellation (or re-entry, regaining or resumption of possession) shall be
the sum of the following:


 


(1)           The amount of the total of all annual
Building Rental, less the installments thereof payable prior to the effective
date of termination except that the credit to be allowed for the installments
payable on the first day of the month in which the termination is effective
shall be prorated for the part of the month the letting remains in effect on
the basis of the actual number of days in said month; and


 


(2)           The amount of the total of all Ground
Rental, less the installments thereof payable prior to the effective date of
termination except that the credit to be allowed for the installments payable
on the first day of the month in which the termination is effective shall be
prorated for the part of the month the letting remains in effect on the basis
of the actual number of days in said month; and


 


(3)           The amount of the Additional Rental payable
subsequent to the day on which the termination is effective; and


 


55



















(4)           The amount of the total of all Additional
Gate Rentals, less the installments thereof payable prior to the effective date
of termination except that the credit to be allowed for the installments
payable on the first day of the month in which the termination is effective
shall be prorated for the part of the month the letting remains in effect on
the basis of the actual number of days in said month; and


 


(5)           On account of the Lessee’s obligations to
pay the Cost of Assumable Maintenance and Repair set forth in Section 53 hereof
entitled “Assumption of Maintenance and Repair of the Terminal by the Port
Authority”, an amount equal to the total sum of the Capital Cost under said
Section 53 hereof less the amount thereof payable prior to the effective date of
termination; and


 


(6)           On account of the Lessee’s obligations to
pay the Costs of the Condition Survey set forth in Section 54 hereof entitled
“Joint Periodic Condition Survey”, an amount equal to the Costs of the
Condition Survey under said Section 54 hereof less the amount thereof payable
prior to the effective date of termination; and


 


(7)           An amount equal to all expenses reasonably
incurred by the Port Authority in connection with such termination,
cancellation, re-entry, regaining or resumption of possession, the restoration
of the Premises (on failure of the Lessee to have restored), the reletting of
the Premises, the care and maintenance of the Terminal during any period of
vacancy of the Premises, the foregoing to include without limitation, legal expenses
(including but not limited to the cost to the Port Authority of in-house legal
services), brokerage fees and commissions, repairing and altering the Premises
and putting the Premises in order (such as but not limited to cleaning and
decorating the Premises).


 


Section 24.            Reletting by the Port Authority


 


The Port Authority upon termination or cancellation pursuant to Section
20 hereof entitled “Termination by the Port Authority”, or upon any re-entry,
regaining or resumption of possession pursuant to Section 21 hereof entitled
“Right of Re-entry”, may occupy the Premises or may relet the Premises, and
shall have the right to permit any Persons, firm or corporation to enter upon
the Premises and use the same.  Such
reletting may be of part only 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 the same as or
different from those set forth in this Agreement.  The Port Authority shall also, upon termination or cancellation
pursuant to the said Section 20, or upon its re-entry, regaining or resumption
of possession pursuant to the said Section 21, have the right to repair or to
make structural or other changes in the Premises, including changes which alter
the character of the Premises and the suitability thereof for the purpose 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 of the


 


56

















 


Port Authority 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 in connection with 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 expenses, costs and disbursements incurred or paid by the
Port Authority in connection therewith. 
No such reletting shall be or be construed to be an acceptance of a
surrender.


 


Section 25.            Remedies to be Non-Exclusive


 


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 to the Lessee at law or in equity, and the
exercise of any remedy, or the existence herein of other remedies or
indemnities shall not prevent the exercise of any other remedy.


 


Section 26.            Surrender


 


The Lessee covenants and agrees to yield and deliver peaceably to the
Port Authority possession of the Premises on the date of cessation of the
letting, whether such cessation be by termination, expiration or otherwise,
promptly and in good condition.


 


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 so 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.


 


Section 28.            Effect of Basic Lease


 


(a)           The
letting shall, in any event, terminate with the termination or expiration of
the Basic Lease with the City of New York which covers the Premises, such
termination to be effective on such date and to have the same effect as if the
term of the letting had on that date expired. 
The rights of the Port Authority in the Premises are those granted to it
by the Basic Lease, and no greater rights are granted or intended to be granted
to the Lessee than the Port Authority has power thereunder to grant.


 


(b)           The
Port Authority covenants that, during the term of this Agreement, the Port
Authority will not take any action which would amount to or have the effect of
canceling, surrendering or terminating the Basic Lease prior to the date


 


57

















 


specified in the Basic Lease
for its expiration or would in any manner deprive the Lessee of any of its
rights, licenses or privileges under this Agreement.


 


(c)           Nothing
herein contained shall prevent the Port Authority from entering into an
agreement with the City of New York pursuant to which the Basic Lease is
surrendered, cancelled or terminated provided that the City of New York, at the
time of such agreement, assumes in writing the obligations of the Port
Authority under this Agreement.


 


(d)           Nothing
contained in this Agreement shall be deemed a waiver by the Lessee of any of
its rights, licenses or privileges under this Agreement in the event that the
Basic Lease should be surrendered, cancelled or terminated prior to the date
specified in the Basic Lease for its expiration.


 


Section 29.            Removal of Property


 


(a)           Except
as set forth in paragraph (b) of this Section, all personal property (including
trade fixtures) installed by the Lessee in or on the Terminal, shall be deemed
to be and remain the property of the Lessee (which personal property exclusive
of the Operating Terminal Property, as hereinafter defined, is hereinafter
called the “Lessee’s Personal Property”). 
All of the Lessee’s Personal Property, provided that the Lessee shall
install suitable replacements therefor if such property is necessary to operate
the Terminal in accordance with the terms and provisions hereof, may at the
Lessee’s option be removed by the Lessee from the Terminal at any time during
the term of the letting hereunder. 
Furthermore, notwithstanding the previous sentence, all of the Lessee’s
Personal Property shall, unless otherwise agreed in writing by the parties
hereto, be removed by the Lessee on or before the expiration or other
termination of the term of the letting hereunder. Any of the Lessee’s Personal
Property, except for the Existing Tanks (as defined in Section 61 hereof entitled
“Storage Tanks”), remaining on the Terminal thereafter shall be deemed
abandoned by the Lessee.  Without
limiting any other term or provision of this Agreement, the Lessee shall
indemnify and hold harmless the Port Authority, its Commissioners, officers,
agents, employees and contractors from all claims of third Persons arising out
of the Port Authority’s removal and disposition of property so abandoned by the
Lessee, including claims for conversion, claims for loss of or damage to the
Lessee’s Personal Property, claims for injury to Persons (including death), and
claims for any other damages, consequential or otherwise.


 


(b)           
Notwithstanding the foregoing or any term or condition set forth in Section 14
of this Agreement to the contrary, the Lessee shall not remove from the
Terminal any jet bridges, baggage handling systems or equipment, counters,
scales, lounge furniture or signs which are generic to the Terminal (all of the
foregoing property being herein referred to at the “Operating Terminal Property”),
whether or not installed by the Lessee, except with the prior written approval
of the Port Authority and in accordance with any requirements set forth in such
approval.


 


58

















 


Section 30.            Brokerage


 


Each party represents and warrants to the other that no real estate
broker has been concerned on its behalf in the negotiation of this Agreement
and that there is no real estate broker who is or may be entitled to be paid a
commission in connection therewith.  Each party shall indemnify and save harmless the other party of
and from any claim for commission or brokerage made by any and all Persons,
firms or corporations whatsoever for services rendered on behalf of the indemnifying
party in connection with the negotiation and execution of this Agreement.


 


Section 31.            Limitation of Rights and Privileges
Granted


 


(a)           No
greater rights or privileges with respect to the use of the Premises or any
part thereof are granted or intended to be granted to the Lessee by this
Agreement, or by any provision thereof, than the rights and privileges
expressly and specifically granted hereby.


 


(b)           The
Premises are let to the Lessee and the Lessee takes the same subject to all the
following: (i) easements, restrictions, reservations, covenants and agreements,
if any, to which the Premises are subject, rights of the public in and to any
public street, (ii) rights, if any, of any enterprise, public or private which
is engaged in furnishing heating, lighting, power, telegraph, telephone, steam,
or transportation services and of the City and State of New York and (iii)
permits, licenses, regulations and restrictions, if any, of the United States,
the City of New York or State of New York or other Governmental Authority.


 


Section 32.            Notices


 


Except where expressly required or permitted herein to be oral, all
notices, directions, requests, consents and approvals required to be given to
or by either party shall be in writing, and all such notices and requests shall
be personally delivered to the duly designated officer or representative of
such party or delivered to the office of such officer or representative during
regular business hours, or forwarded to him or to the party at such address by
certified or registered mail.  The
Lessee shall from time to time designate in writing an office within the Port
of New York District and an officer or representative whose regular place of
business is at such office upon whom notices and requests may be served.  Until further notice, the Port Authority
hereby designates its Executive Director, and the Lessee designates George
Sauer, Vice President Corporate Real Estate as their officers upon whom notices
and requests may be served, and the Port Authority designates its office at 225
Park Avenue South, New York, New York 10003, and the Lessee designates its
office at 118-29 Queens Boulevard, Forest Hills, New York 11375, as their
respective offices where notices and requests may be served.  If mailed, the notices herein required to be
served shall be deemed effective and served as of the date of the certified or
registered mailing thereof.


 


59

















 


Section 33.            Other Construction by the Lessee


 


(a)           The
Lessee shall not erect any structures, make any improvements or do any other
construction work on the Terminal or alter, modify, or make additions or
improvements to any structure now existing or built at any time during the
letting, or install any fixture (other than trade fixtures, removable without
material damage to the freehold, any such damage to be immediately repaired by
the Lessee) without the prior written approval of the Port Authority.  In the event any construction, improvement,
alteration, modification or addition, is made without such prior written approval
of the Port Authority, then upon reasonable notice so to do, the Lessee will
remove the same, or at the option of the Port Authority cause the same to be
changed to the satisfaction of the Port Authority.  In case of any failure on the part of the Lessee to comply with
such notice, the Port Authority may effect the removal or change and the Lessee
shall pay the cost thereof to the Port Authority.  In addition all Construction Work shall be performed in accordance
with the terms and conditions of Section 2 hereof.


 


(b)           Without
limiting the generality of the foregoing paragraph the Lessee acknowledges and
agrees that all Notes and their associated reference lines set forth on Exhibit
1.1 to the Lease shall not constitute or be deemed to constitute or imply that
approval of the Port Authority will be granted to any proposed construction by
the Lessee nor shall the same grant or be deemed to grant any right or
permission to the Lessee now or in the future to erect any structures, make any
improvements or do any other construction work in the Terminal, including but
not limited to paving, or to alter, modify or make additions, improvements or
repairs to or replacements of, any structure now existing or built at any time
during the letting or install any fixtures on the Terminal, including but not
limited to paving, and that the provisions of the foregoing paragraph of this
Section shall be read and construed as if there were no Notes on Exhibit 1.1
and their associated reference lines, which were placed on such Exhibit solely
and exclusively for the benefit of the Port Authority.


 


(c)           Notwithstanding
the obligation of maintenance imposed upon the Lessee by the provisions of
Section 10 hereof, the Lessee shall not make any repairs or replacements
(except emergency repairs or replacements) unless and until it has first
obtained an approved Port Authority alteration application for such repairs or
replacements which shall then be performed in full accordance with the terms of
said alteration application.


 


Section 34.            Place of Payments


 


All payments required of the Lessee by this Agreement shall be made to
the Port Authority, P.O. Box 17309, Newark, New Jersey 07194, or to such other
address, office or location as may be substituted therefor by the Port
Authority by notice to the Lessee from time to time.


 


60

















 


Section 35.            Construction and Application of Terms


 


(a)           The
Section and paragraph headings, if any, in this Agreement, 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.


 


(b)           Unless
otherwise expressly specified, the terms, provisions and obligations contained
in the Exhibits and Schedules attached hereto, whether there set out in full or
as amendments of, or supplements to provisions elsewhere in the Agreement
stated, shall have the same force and effect as if herein set forth in full.


 


(c)           If
any clause, provision or section of this Agreement shall be ruled invalid by any
court of competent jurisdiction, the invalidity of such clause, provision or
section shall not affect any of the remaining provisions hereof.


 


(d)           The
fact that certain of the terms and provisions hereunder are expressly stated to
survive the expiration or termination of the letting hereunder does not mean
nor shall be construed to mean that those provisions hereunder which are not
expressly stated to survive shall terminate or expire on the expiration or
termination of the letting hereunder and do not survive such termination or
expiration.


 


(e)           The
parties agree that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be applicable to the
interpretations of this Agreement or any amendments, addenda or supplements
hereto or any Exhibits or Schedules hereto.


 


Section 36.            Non-liability of Individuals


 


No Commissioner, director, officer, agent or employee of either party
shall be charged personally or held contractually liable by or to the other
party under any term or provision of this Agreement or of any supplement,
modification or amendment to this Agreement or because of any breach thereof,
or because of its or their execution or attempted execution.


 


Section 37.            Abatement


 


If the Port Authority shall, for safety or other reasons, prohibit the
use of the Public Landing Area at the Airport or of any substantial part
thereof for foreign or domestic scheduled air transport operations for a period
covering more than sixty (60) consecutive days and the Lessee shall thereby be
prevented from conducting those operations at the Airport enumerated in Section
5 hereof entitled “Use of Premises”, then upon the occurrence of such event,
the Lessee at its option shall be entitled to abatement of rental during such
period of prohibition and prevention. 
In the event that the Lessee shall exercise such option the Lessee shall
be deemed to have released and discharged the Port Authority of and from all
claims and rights which the Lessee may have hereunder


 


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arising out of or consequent
upon such closing and the subsequent interrupted use of such Public Landing
Area or part thereof during the period of prohibition.


 


Section 38.            Services to the Lessee


 


Except as provided in this Section 38, the Port Authority shall not be
obligated to perform or furnish any services or utilities whatsoever in
connection with this Lease or the use and occupancy of the Terminal.


 


(a)           The
Port Authority shall sell, furnish and supply to the Lessee for use on the
Terminal and the Lessee agrees to take from the Port Authority and pay for
electricity of the same voltage, phase and cycle as supplied to the Terminal by
the public utility in the vicinity, but limited however, to serve a maximum of
the installed transformer capacity serving each portion of the Terminal on the
Effective Date, at the same charge which would be made by such public utility
for the same quantity under the same conditions and in the same service
classification but in no event less than an amount that would reimburse the
Port Authority for its cost of obtaining and supplying electricity to the
Lessee hereunder; charges shall be payable by the Lessee when billed and the
quantity of electricity consumed shall be measured by the meter or meters
installed for the purpose; provided, 
however, that if for any reason any meter or meters fail to record the
consumption of electricity, the consumption during the period such meter or meters
are out of service will be considered to be the same as the consumption for a
like period either immediately before or after the interruption as elected by
the Port Authority.  The Port Authority
shall not discontinue the supply of electricity except upon fifteen (15) days’
notice to the Lessee and unless a supply of electricity of the same voltage,
phase and cycle (subject to the KVA limitation aforesaid) shall be available
from another supplier and upon any such discontinuance the Lessee shall be at
liberty to contract or otherwise arrange for the supply of such current after
the expiration of said fifteen (15) days from any other Person, firm or
corporation.  The Port Authority shall
install the appropriate meters.


 


(b)           The
Port Authority agrees to sell, furnish and supply to the Lessee for use on the
Terminal cold water (of the character furnished by the City of New York) in
reasonable quantities through existing pipes, mains and fittings and the Lessee
agrees to take such water from the Port Authority and to pay the Port Authority
therefor an amount equal to that which would be charged by the municipality or
other supplier of the same (whether or not representing a charge for water or
other services measured by water consumption) for the same quantity, used under
the same conditions and in the same service classification plus the cost to the
Port Authority of supplying such water which shall not be less than ten percent
(10%) nor in excess of fifty percent (50%) of the amount charged.  The charge therefor shall be payable by the
Lessee when billed and the quantity of water consumed shall be measured by the
meter or meters installed for the purpose; provided, however, that if for any
reason, any meter or meters fail to record the consumption of water, the
consumption during the period such meter or meters are out of service will be
considered to be the same as the consumption for a like period immediately
before or after the interruption, as elected by the Port Authority.  The Port


 


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Authority shall install the
appropriate meters.  In the event meters
are not installed to measure the consumption of water under high pressure, the
quantity of such water used by the Lessee will be based upon equitable estimates
of consumption, which estimates shall be deemed binding on the Lessee.


 


(c)           The
Lessee shall pay to the Port Authority such of the existing and future charges
for sewerage services furnished by the City of New York as are presently or may
hereafter be imposed or assessed against the Port Authority in respect of the
Terminal or its use and occupancy thereof. 
In the event that the City or the State of New York is now furnishing
services with or without charge therefor, which are beneficial to the Lessee in
its use and occupancy of the Premises, and shall hereafter impose charges or
increase existing charges for such services, the Lessee agrees to pay to the
Port Authority such of the charges or the increase in charges as may be imposed
or assessed against the Port Authority in respect to the Terminal or its use
and occupancy thereof.


 


(d)           In
the event the Port Authority shall provide extermination service for the
enclosed areas of the Terminal, the Lessee agrees to utilize the same and to
pay its pro rata share of the reasonable cost thereof upon demand. This
paragraph does not impose any obligation on the Port Authority to furnish such
service.


 


(e)           The
Port Authority shall not be obligated to perform or furnish any other services
whatsoever in connection with the Terminal or any services at any time while
the Lessee shall be in default hereunder after the period, if any, herein
granted to cure such default shall have expired.


 


(f)            The
Port Authority shall be under no obligation to supply services if and to the
extent and during any period that the supplying of any such service 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.


 


(g)           No
failure, delay or interruption in supplying agreed services (whether or not a
separate charge is made therefor) shall be or be construed to be an eviction of
the Lessee or grounds for any diminution or abatement of rental, or (unless
resulting from the negligence or wilful failure of the Port Authority) shall be
grounds for any claim by the Lessee for damages, consequential or otherwise.


 


Section 39.            Hot Water and Chilled Water Requirements


 


(a)           (1)           The Port Authority has
entered into agreements consisting of an Energy Purchase Agreement, dated as of
April 28, 1993, a Construction and Operations Agreement, dated as of April 28,
1993, and an Agreement of Lease, dated as of April 28, 1993, (all of the
foregoing Agreements hereinafter as the same may be supplemented, amended and
extended from time to time collectively and individually


 


63

















 


called the “Cogeneration
Agreement”) with KIAC Partners, a New York general partnership (hereinafter
called “KIAC”), for the construction, installation and operation of a
cogeneration facility at the Airport which includes portions of the central
heating and refrigeration facility previously operated by the Port Authority at
the Airport and which cogeneration facility produces electricity, hot water
(hereinafter called “Hot Water”) and chilled water (hereinafter called “Chilled
Water”) and which cogeneration facility is hereinafter called the “Cogeneration
Facility”.  The Cogeneration Facility
shall include a thermal distribution system (the “TDS”) including distribution
lines extending to the Terminal as provided in paragraph (f) below.


 


(2)           The
Lessee acknowledges that it has received a copy of the Cogeneration Agreement
and agrees that the supply by KIAC of Hot Water and Chilled Water to the
Terminal is subject to all of the terms and provisions of the Cogeneration Agreement.  The Lessee agrees that the Port Authority
may grant waivers, consents and approvals to KIAC from time to time and the
Port Authority and KIAC may, except to the extent provided in paragraph (i)
below, supplement, amend or extend the Cogeneration Agreement from time to time
and that the Lessee shall be subject to any such waivers, consents and
approvals and supplements, amendments, and extensions as part of the
Cogeneration Agreement.  Copies of any
such supplements, amendments and extensions will be made available to the
Lessee upon request by the Lessee therefor.


 


(b)           (1)           The Cogeneration
Agreement provides, among other things, that the Port Authority will purchase
from KIAC for resale to the Lessee, and the Lessee hereby agrees that it will
accept and purchase from the Port Authority subject to all of the terms and
conditions of the Cogeneration Agreement, for use on the Terminal, to the
extent the same is delivered by KIAC to the Port Authority and by the Port
Authority to the Lessee, all of the Lessee’s requirements at the Terminal for
Hot Water and Chilled Water (excluding requirements exclusively for aircraft
and loading bridges leading to aircraft); and the Lessee hereby agrees to pay
the Port Authority therefor as follows:


 


(i)            The Lessee acknowledges and agrees that the
charge to the Lessee by the Port Authority for the Lessee’s consumption of Hot
Water and Chilled Water at the Terminal and Chilled Water makeup water and
chemical treatment of makeup water (due to system leakage at the Terminal or
otherwise) shall be the sum of (A) the amount payable by the Port Authority to
KIAC therefor pursuant to the Cogeneration Agreement, plus (B) Five Percent
(5%) of the foregoing and plus (C) all applicable taxes.


 


(ii)           The Lessee acknowledges that pursuant to the
Cogeneration Agreement KIAC will furnish the Port Authority with measurements
of the Lessee’s consumption of (A) Hot Water based upon energy drawn by the
Lessee from KIAC’s Hot Water distribution lines, (B) Chilled Water based upon
the energy absorbed from the Lessee by KIAC’s Chilled Water distribution lines
and (C) Chilled Water makeup water and chemical treatment of makeup water
consumed on the Terminal, and the Lessee agrees that the


 


64

















 


provisions of
the Cogeneration Agreement with respect to the accuracy of such measurements,
the determination of such measurements in the event of inaccurate registration
by metering devices, and the use of estimates in the event of the failure of
such metering devices shall all be applicable to the Lessee under this
Agreement as though set forth in full herein.


 


(iii)          The Lessee acknowledges that the Cogeneration
Agreement provides that KIAC shall provide estimated bills to the Port
Authority for consumption of Hot Water and Chilled Water on a monthly basis
commencing approximately ten (10) days after the Cogeneration Effective Date
for the first calendar month or portion thereof and on or about the tenth
(10th) day of the month for each calendar month thereafter.  KIAC is then to render a final bill with
respect to each estimated bill approximately ten (10) days after the conclusion
of the said month together with the estimated bill for the then current month.


 


(iv)          Notwithstanding such arrangement between KIAC
and the Port Authority, the Port Authority shall, with respect to each calendar
year or fraction thereof, establish estimated unit rates, subject to change
from time to time by the Port Authority, for the consumption on the Terminal of
Hot Water and Chilled Water and shall render an estimated bill to the Lessee
for the consumption at the Terminal at such estimated rates monthly on the last
day of the calendar month following each full or partial calendar month during
the term hereof which bill shall be payable on receipt.


 


(v)           As soon as practicable after the expiration
of each calendar year, the Port Authority shall determine the amounts payable
by the Lessee in accordance with the provisions of subparagraphs (i), (ii) and
(iii) of this paragraph (b)(1).  A
corrected billing based upon such determination shall thereupon be rendered by
the Port Authority to the Lessee and if any monies are due to the Port
Authority they shall be promptly paid by the Lessee and if any monies are due
to the Lessee they shall be credited to it. 
In the event the term of this Agreement expires or is sooner terminated
on a date other than the last day of a calendar year, the Port Authority shall
have no obligation to immediately make the computations as hereinabove provided
which would determine the amounts payable by the Lessee in accordance with
subparagraphs (i), (ii) and (iii) of this paragraph (b)(1) for the period
during said year when this Agreement was in effect.  In the event this Agreement expires on a day other than the last
day of a calendar month and the actual consumption of and charges to the Lessee
for such portion of the calendar month are not available, the charge to the
Lessee shall be equitably prorated. 
Said computations shall be made subsequent to the end of the calendar
year as hereinabove provided, and if any monies are due to the Port Authority
they shall be paid by the Lessee and if any monies are due to the Lessee they
shall be paid to it by the Port Authority less such amounts, if any, then due
and owing to the Port Authority from the Lessee.


 


65

















 


(vi)          The Port Authority shall render a bill to the
Lessee from time to time for the Lessee’s Chilled Water distribution gallonage
which shall be payable upon receipt. 
The charge therefor shall be based on KIAC’s charge to the Port
Authority for makeup water and chemical treatment of makeup water and shall be
determined in accordance with subparagraphs (i) and (ii) of this paragraph
(b)(1).


 


(vii)         In the event that the Lessee disputes any item
of an estimated or final bill, the Lessee shall promptly pay the bill in full
and the Port Authority shall make any necessary adjustments only after
resolution of such dispute.


 


(2)           The
Lessee agrees that in order that KIAC or any successor thereto may maintain the
status of the Cogeneration Facility as a “qualifying cogeneration facility”
under applicable Federal laws, rules and regulations (“QF Status”) including
the Public Utility Regulatory Policies Act of 1978 as the same may be amended
and any successor statute thereto, the Lessee shall, at all times it is
operating at the Terminal for the purposes permitted in this Agreement,
purchase from the Port Authority and use on an annual basis a minimum amount of
thermal energy contained in Hot Water and Chilled Water produced by use of
steam from the Cogeneration Facility equivalent to the lesser of (1) an amount
that, together with all thermal energy contained in Hot Water and Chilled Water
purchased and used by the Port Authority and all other lessees of premises in
the Central Terminal Area, is sufficient to maintain the QF Status of the
Cogeneration Facility and (2) the product of (x) 167,379 mm BTUs of thermal
energy, which is one-third of the use of thermal energy contained in Hot Water
and Chilled Water in the Central Terminal Area of the Port Authority and the
lessees of premises in the Central Terminal Area in the year ending December
31, 1989, and (y) a fraction, the numerator of which is the amount of the use
of thermal energy contained in Hot Water and Chilled Water at the Terminal  in the most recent complete calendar year
preceding the applicable date of determination and the denominator of which is
the amount of all use in the Central Terminal Area of thermal energy contained
in Hot Water and Chilled Water in such calendar year.


 


(3)           It
is agreed that during or subsequent to the expiration of this Agreement no
charge to or payment by the Lessee with respect to Hot Water, Chilled Water or
Chilled Water distribution gallonage shall be included in, affect, or change in
any way the calculation and determination of Port Authority costs or charges
under any other agreement between the Lessee and the Port Authority at the
Airport and any such Port Authority cost or charge shall be calculated and
determined as if no charge to or payment by the Lessee with respect to Hot
Water, Chilled Water or Chilled Water distribution gallonage had been incurred.


 


(c)           THE
LESSEE HEREBY WAIVES AND RELINQUISHES for itself, its successors and assigns
any right it may have, and further agrees that it, its successors and assigns
shall have no right, to manufacture or produce, to cause to be manufactured or
produced, or to purchase or receive from any third party, Hot Water or


 


66

















 


Chilled Water for use on the
Terminal or to use any other manner of air cooling or air heating at the
Terminal except to purchase, receive and use Hot Water and Chilled Water from
the Port Authority pursuant to this Agreement.


 


(d)           There
shall be no obligation to the Lessee by either KIAC or the Port Authority to
furnish the goods and services covered by this Section at any time (i) while
any component necessary therefor shall be prohibited or rationed by any
federal, state or municipal, law, rule, regulation, requirement, order or
direction or while 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, (ii)
while the same are curtailed or stopped because of the need to repair, replace,
rebuild or alter the Cogeneration Facility, (iii) during the continuance of any
event of Force Majeure, as such term is defined in the Cogeneration Agreement
or (iv) that the Lessee shall be in default under this Agreement after the
period, if any, herein granted to cure such default shall have expired.  No failure, delay or interruption in
supplying said goods and services shall be or be construed to be an eviction of
the Lessee or grounds for the diminution or abatement of rentals, fees or other
charges, nor shall any such failure, delay or interruption be grounds for any
claim by the Lessee for damages, consequential or otherwise, against the Port
Authority or KIAC.


 


(e)           Without
limiting any other provision of this Section, any supply of Hot Water or
Chilled Water to the Terminal from the Cogeneration Facility shall be limited
by the safe and efficient operating capacity of the Cogeneration Facility as
determined by KIAC and as approved by the Port Authority.


 


(f)            (1)           The Lessee shall
install all machinery, equipment and facilities, including heat exchangers,
required to be installed in the Terminal in order to utilize Hot Water and
Chilled Water to be distributed and shall tie into the TDS in the mechanical
equipment rooms constructed by the Lessee on the Terminal.


 


(2)           The
Lessee hereby agrees that the Port Authority, KIAC and the contractors or
suppliers of either of them shall have the right to enter upon the Terminal to
install, operate and maintain any part of the Cogeneration Facility located
thereon including but not limited to the TDS and any heat exchangers installed
by the Port Authority or KIAC.


 


(g)           In
the event the Cogeneration Agreement is terminated and the facilities for the
production of Hot Water and Chilled Water at the Airport exist and are, in the
opinion of the Port Authority, economically operable, the Port Authority itself
or pursuant to agreement with a contractor or permittee shall supply Hot Water
and Chilled Water to the Terminal and the Lessee shall take and pay therefor at
the same charge to the Lessee which would be applicable as if the Cogeneration
Agreement had been in full force and effect, provided,  however, that notwithstanding any other
provision of this Section, the charge therefor to the Lessee shall in no event
be less than an amount that would reimburse the Port Authority for its capital
and operating costs in connection therewith determined in accordance with the
Port Authority’s normal accounting practice.


 


67

















 


In addition, the Port Authority
may, in its discretion, make or consent to arrangements on one or more
occasions with a third party or parties to succeed to KIAC’s operation of all
or any part of the Cogeneration Facility and the Lessee shall continue to be
obligated to purchase Hot Water and Chilled Water from the Port Authority
pursuant to this Agreement, at the rates provided for in the Cogeneration Agreement.


 


(h)           Neither
the Port Authority nor KIAC shall have any liability to the Lessee for any
facilities installed by the Lessee on the Terminal in connection with the use
of Hot Water and Chilled Water hereunder or for any investment made in
connection with the use of Hot Water and Chilled Water.


 


(i)            The
Port Authority shall have the right to grant waivers, consents and approvals
with respect to the Cogeneration Agreement and to enter into amendments,
supplements or extensions of the Cogeneration Agreement with KIAC or any
similar agreement with any successor operator of the Cogeneration Facility or
other provider of Hot Water and Chilled Water at the Airport, provided,
however, that the Port Authority will not enter into any amendment, supplement
or extension of the Cogeneration Agreement which will result in a change in the
formula used to calculate the Hot Water and Chilled Water rates payable by the
Lessee which change results in an increase in the rates payable by the Lessee
pursuant to such formula (the Lessee hereby acknowledging that such formula
may, according to its terms, provide for such rates to be adjusted from time to
time) without the consent of the lessees (including the Port Authority as and
to the extent that the Port Authority uses Hot Water and Chilled Water) of
premises that purchased and used at least Fifty-one percent (51%) of the
aggregate Hot Water and Chilled Water purchased and used in the Central
Terminal Area during the last full calendar year preceding the effective date
of such amendment, supplement or extension.


 


Section 40.            General Airport Agreement


 


It is recognized that the General Airport Agreement and the principles
and formula set forth therein for the calculation of flight fees, including the
costs recovery accounting principles, have by agreement or policy been the
basis for determining flight fees payable by various Aircraft Operators at the
Airport in addition to the Aircraft Operators who are the actual signatory
lessees to the General Airport Agreement. 
In the event of the expiration and non-extension or non-renewal of the
General Airport Agreement, the same formula, accounting principles and costs
recovery methodology now set forth in the General Airport Agreement for the
calculation of flight fees shall continue to be utilized for the calculation of
flight fees at the Airport for the Lessee until such time as the General
Airport Agreement is formally replaced by a new agreement or agreements or by a
new policy or policies.  The Port
Authority has advised the Lessee that it is the intention of the Port Authority
that with respect to the formula, accounting principles and the costs recovery
methodology for the calculation of flight fees upon the expiration and
non-extension or non-renewal of the General Airport Agreement all Aircraft
Operators at the Airport which are similarly situated will be treated in a
similar manner.


 


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Section 41.            Federal Airport Aid


 


The Port Authority has applied for and received a grant or grants of
money from the Administrator of the Federal Aviation Administration pursuant to
the Airport and Airways Development Act of 1970, as the same has been amended
and supplemented or superseded by similar federal legislation, and under prior
federal statutes which said Act superseded and the Port Authority may in the
future apply for and receive further such grants.  In connection therewith the Port Authority has undertaken and may
in the future undertake certain obligations respecting its operation of the
Airport and the activities of its contractors, lessees and permittees
thereon.  The performance by the Lessee
of the covenants and obligations contained in this Lease is therefore a special
consideration and inducement to the making of this Agreement by the Port
Authority, and the Lessee further covenants and agrees that if the
Administrator of the Federal Aviation Administration or any other governmental
officer or body having jurisdiction over the enforcement of the obligations of
the Port Authority in connection with Federal Airport Aid shall make any
orders, recommendations or suggestions respecting the performance by the Lessee
of its covenants and obligations under this Agreement, the Lessee will promptly
comply therewith at the time or times, when and to the extent that the Port
Authority may direct.


 


Section 42.            Requesting Airlines at the Airport


 


(a)           If
a Scheduled Aircraft Operator advises the Lessee that it would like to be
accommodated by the Lessee at the Terminal (any such Scheduled Aircraft Operator
being hereinafter called a “Requesting Airline”), the Lessee in furtherance of
the public interest of having the Terminal fully and most effectively utilized
shall use its best efforts to accommodate the request of said Requesting
Airline.  If the Lessee fails to reach
agreement with said Requesting Airline for its accommodation, the Lessee shall
advise the Port Authority to such effect. 
Thereafter, the Port Authority shall make a determination as to whether
the Lessee should accommodate the Requesting Airline as requested and if so,
whether there are any limitations on the nature, extent, cost, duration and
extent of such accommodation. 
Determinations of the Port Authority shall not be arbitrary or capricious.  Such determinations of the Port Authority
would take into consideration the then existing utilization of the Terminal and
the necessity for the flights, schedules, flight times, operations, operating
practices and aircraft equipment of the Requesting Airline to be compatible
with those of the Lessee, as well as the need for labor harmony.  The Lessee agrees to comply with such
determinations of the Port Authority made in accordance with this Section.


 


(b)           Any
arrangement between the Lessee and the Requesting Airline made in accordance
with any of the foregoing provisions shall be submitted by the Lessee to the
Port Authority for its consent, which will be in the form of a consent
agreement prepared by the Port Authority and to be executed by the Lessee, the
Requesting Airline and the Port Authority.


 


69

















 


(c)           The
foregoing shall not be deemed to abrogate, change or affect any restrictions,
limitations or prohibitions on assignment, subletting or use of the Premises by
others under this Lease or the use or occupancy of the Non-Premises portion of
the Terminal and shall not in any manner affect, waive or change any of the
provisions thereof.


 


Section 43.            Additional Rights of the Port Authority
a to Portions of the Premises


 


(a)           It
is hereby agreed that for the purpose of this Section the term the “Lessee’s
Commencement Basic Schedule” shall be and mean a “Revenue Seats Daily Average”
(as said term is defined in paragraph (e) hereof) of 8,748.


 


(b)           Commencing
with calendar year 2003 and for each and every calendar year thereafter, the
Port Authority may ascertain the Revenue Seats Daily Average of the Lessee for
the Airport for the preceding calendar year in accordance with the provisions
of paragraph (e) hereof, which Revenue Seats Daily Average shall be the
Lessee’s Basic Schedule for the preceding calendar year and shall be referred
to as such.  Thus, for example, in the
case of the first calculation which would be based on the calendar year 2002
experience, said Revenue Seats Daily Average shall be called the “Lessee’s
Basic Schedule for 2002”.


 


(c)           (1)           As of January 1, 2003
and as of January 1 of each succeeding calendar year (i) in the event that the
Lessee’s Basic Schedule for the immediately preceding calendar year for the
Airport is less than sixty percent (60%) of the Lessee’s Commencement Basic
Schedule or (ii) in the event that because of reasons beyond the control of the
Lessee the Lessee’s Basic Schedule for the immediately preceding two calendar
years is less than sixty percent (60%) of the Lessee’s Commencement Basic
Schedule, then in either of such events and without limiting each and every
other right the Port Authority has under this Agreement or otherwise, the Port
Authority shall have the right, upon six (6) months’ written notice to the
Lessee, to require the Lessee and the Lessee hereby agrees to make available
Accommodations (as hereinafter defined) at the Premises as directed by the Port
Authority in the amount and to the extent set forth in paragraph (f) hereof to
Scheduled Aircraft Operators.  The
Lessee shall make such Accommodations available from time to time during the
entire period commencing on the effective date set forth in the aforesaid
notice and ending when the Lessee’s Basic Schedule for a calendar year,
determined in accordance with the foregoing shall have been sixty percent (60%)
or more of the Lessee’s Commencement Basic Schedule (hereinafter called a
“Period of Underutilization”).  The term
“Accommodations” shall mean aircraft ramp and gate position capacity and related
passenger terminal facilities including, but not limited to passenger
ticketing, passenger check-in, baggage handling and flight information systems,
passenger lounge and waiting areas and appropriate signage and public
identification.  Such Accommodations may
be accomplished by the Lessee by making available and providing non-exclusive
use of gate positions and other related facilities to Scheduled Aircraft
Operators pursuant to a Handling Agreement between the Lessee and any such
Scheduled Aircraft Operator (hereinafter called a “Accommodated Handled
Airline”).  Each such Handling


 


70

















 


Agreement shall be subject to
the prior and continuing approval of the Port Authority and the execution among
the Port Authority, the Lessee, and the Accommodated Handled Airline of a form
of consent agreement prepared by the Port Authority.  Moreover, and without limiting the foregoing, the Lessee will at
all times keep the Port Authority informed and advised and will consult with
the Port Authority from time to time as to all aspects of its accommodation of
Scheduled Aircraft Operators hereunder.


 


(2)           It
is understood furthermore that the Accommodations contemplated hereunder may
involve the use of subleases of exclusive or preferential areas of the Premises
in addition to or in lieu of Handling Agreements.  Any sublease with a Scheduled Aircraft Operator (hereinafter
called a “Accommodated Sublessee Airline”) will similarly be subject to the
prior and continuing approval of the Port Authority and the execution of a
consent agreement prepared by the Port Authority, and executed by the Port
Authority, the Lessee and the Accommodated Sublessee Airline.


 


(3)           Nothing
contained herein shall in any way affect the discretion of the Port Authority
in granting or withholding its consent to a Handling Agreement or a sublease
with a Accommodated Sublessee Airline, proposed by the Lessee or directed by
the Port Authority whether or not during a Period of Underutilization, and such
consent may contain such terms and conditions including but not limited to such
financial or other conditions which may include a fixed charge or a charge
based upon a percentage of the Lessee’s gross receipts arising therefrom, as
the Port Authority may, at that time, elect, and all provisions of the Lease
requiring the prior written consent or approval of the Port Authority.


 


(4)           Notwithstanding
anything to the contrary contained herein the Lessee understands and agrees
that the Lessee shall not perform any services and functions pursuant to any
Handling Agreement or sublease with a Accommodated Handled Airline or a
Accommodated Sublessee Airline with respect to which the Port Authority has
specifically withheld consent and approval in the consent agreement to such
Handling Agreement or sublease.  The
Accommodated Handled Airline and the Accommodated Sublessee Airline may either
perform said services and functions themselves or use the services of the
authorized service organization, including but not limited to in-flight
caterers, aircraft fuelers, and ramp handlers performing such services or
functions at the Airport.  The Lessee
however may make the necessary arrangements with the authorized service
organization performing such services and functions performed for the
Accommodated Handled Airline or the Accommodated Sublessee Airline.


 


(5)           The
Lessee shall furnish to the Port Authority from time to time such itemization,
details and information pertaining to the Handling Agreements and subleases as
the Port Authority may from time to time request.


 


(6)           The
Lessee agrees that all Handling Agreements and subleases shall be at reasonable
and at non-discriminatory rates, fees and charges, which rates, fees and
charges shall be based upon the recovery by the Lessee of a pro rata share 


 


71

















 


of the Lessee’s costs of (i)
rental, operation and maintenance of the Premises, (ii) the services provided
to the Accommodated Handled Airline or the Accommodated Sublessee Airline and
(iii) the Lessee’s investment in the Premises not otherwise included in the
above, provided, however, that it is understood and agreed that the following
shall not be a reason for the Lessee to refuse a sublease or Handling Agreement
or to impose any conditions or limitations on operations in connection
therewith under this Section: (aa) possible or potential labor disharmony with
a Accommodated Handled Airline or Accommodated Sublessee Airline, (bb)
compatibility of schedules and operations between the Lessee or another user or
occupant of the Premises and a Accommodated Handled Airline or Accommodated
Sublessee Airline, or (cc) competitive nature of the routes, schedules or type
of air transportation service to be provided by a Accommodated Handled Airline
or Accommodated Sublessee Airline, provided, further, however, that with
respect to item (aa) above if, after notice from the Port Authority to provide
Accommodations to a specific Scheduled Aircraft Operator, the Lessee shall, in
good faith, believe that the operations of such specific Scheduled Aircraft
Operator on the Premises would cause such significant, immediate and
unremediable labor disharmony which would seriously affect the operations of
the Lessee then, upon request by the Lessee to the Port Authority setting forth
in specific detail satisfactory to the Port Authority the nature of the
anticipated labor disharmony and requesting that the Lessee not be obligated
under this Section to provide Accommodations for such specific Scheduled Aircraft
Operator, the Port Authority shall, in good faith, consider the Lessee’s
request and if the Port Authority finds that the labor disharmony described by
the Lessee is reasonably likely to result if the Lessee were to provide
Accommodations to such Scheduled Aircraft Operator on the Premises then the
Port Authority shall notify the Lessee that the Port Authority’s discretion to
provide Accommodations to such Scheduled Aircraft Operator is rescinded.  The Lessee’s obligation to provide
accommodations to Scheduled Aircraft Operators shall be effective on the date
set forth in a notice from the Port Authority to such effect, as
aforesaid.  Upon such notice the Lessee
shall use its best efforts to secure an arrangement with a Scheduled Aircraft
Operator as directed by the Port Authority for Accommodations in the Premises
and shall in good faith negotiate with any such Scheduled Aircraft Operator as
the Port Authority shall direct for Accommodations in the Premises, all in
accordance herewith.


 


(d)           The
failure of the Port Authority to exercise its rights under this Section during
any year in which it may have such a right, shall not affect, waive or limit
its right to exercise said rights in any subsequent year.


 


(e)           (1)           In the event the Port
Authority decides to ascertain the Revenue Seats Daily Average of the Lessee
for the preceding calendar year it shall do so as follows: based upon the
Official Airlines Guide (herein called the “Guide”), or in the event that the
Guide shall not list the Lessee’s schedules, then based upon the generally
accepted United States aviation industry standard published airline schedule
reference which shall include the Lessee’s published schedules, the Port
Authority shall ascertain the total number of revenue seats that were accommodated
on the aircraft equipment scheduled to have been used by the Lessee on its
published aircraft arrivals at the Airport as set forth in the Guide during two
specified calendar weeks (Sunday through Saturday),


 


72

















 


the first of which weeks is the
one during which the fifteenth (15th) day of February of the prior calendar
year fell and the second being the one during which the fifteenth (15th) day of
August of the said prior calendar year fell (said week of February together
with said week of August being hereinafter collectively called the “Measuring
Period”), and shall total the said number of revenue seats which are
hereinafter called the “Total Revenue Seats” of the Lessee.  In determining the Total Revenue Seats of
the Lessee, the Total Revenue Seats as defined above of those Accommodated
Handled Airlines, if any, of the Lessee who were Accommodated Handled Airlines
as of the date of such determination and Accommodated Sublessee Airlines at the
Premises who were Accommodated Sublessee Airlines on the date of such
determination, with respect to the aircraft of the Accommodated Handled
Airlines and aircraft of the Accommodated Sublessee Airlines operating at the
Premises, shall be included.


 


(2)           In
making said determination, the Port Authority shall use the aircraft
configurations as supplied by the Lessee for the Measuring Period in question
with respect to the number of revenue seats that can be accommodated on the
particular aircraft equipment scheduled to be used by the Lessee at the
Airport. The Total Revenue Seats of the Lessee shall then be divided by
fourteen, the resulting quotient being herein called the “Revenue Seats Daily
Average” of the Lessee.


 


	
  (f)

  	
   

  	
  Percentage of the Lessee’s

  Basic Schedule Compared

  To the Lessee’s Commence-

  ment Basic Schedule:

  	
   

  	
  Number of
  Gate Positions

  the Port Authority

  May require at the Premises:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  70%

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
  60%

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
  50%

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  40%

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
  30%

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
  20%

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
  10%

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
  0%

  	
   

  	
  11

  	
   

  



 


Section 44.            Force Majeure


 


Neither the Port Authority nor the Lessee shall be deemed to be in
violation of this Agreement if it is prevented from performing any of its
obligations hereunder by reason of strikes, boycotts, labor disputes,
embargoes, shortages of material, acts of God, acts of the public enemy, acts
of superior governmental authority, weather conditions, tides, riots,
rebellion, sabotage or any other circumstances for which it is not responsible
and which are not within its control; provided, however, that this provision
shall not apply to failures by the Lessee to pay the rentals specified in
Section 4 hereof entitled “Rental” and shall not apply to any other charges or
money payments; and, provided, further, that this provision shall not prevent
either party from exercising its


 


73

















 


right of termination under
Section 20 hereof entitled “Termination by the Port Authority” and Section 49
entitled “Lessee’s Financial Condition - Limitation of Lease Term - Triggering
Events” and shall not prevent the Lessee from exercising its right to an
abatement of rental under Section 37 hereof entitled “Abatement”.


 


Section 45.            Ingress and Egress


 


(a)           The
Lessee, its officers, employees, passengers, patrons, invitees, contractors,
suppliers of material and furnishers of services, shall have the right of
ingress and egress between the Premises and the city streets outside the
Airport over such highways at the Airport as may be made available from time to
time by the Port Authority for use by the public, provided, however, that the
Lessee hereby expressly understands and agrees that the Lessee shall have no
right of ingress and egress or access hereunder or otherwise for its employees,
customers, patrons, invitees and their baggage between the Premises and the
city streets or public ways outside the Airport by means of any mode of
transportation or any vehicle which may be limited or restricted in accordance
with Section 46 hereof, it being understood that access to the Premises for
emergency response for reasons of safety or health shall not be deemed a breach
hereof. Such right shall be exercised in common with others having rights of
passage within the Airport.


 


(b)           The
Lessee shall have the right of ingress and egress between the Premises and the Public
Landing Area at the Airport, by means of existing taxiways to be used in common
with others having rights of passage thereon, provided, however, that the Port
Authority may from time to time substitute other reasonably equivalent means of
ingress and egress.


 


(c)           The
use of all roadways and taxiways shall be subject to the Rules and Regulations
of the Port Authority which are now in effect or which may hereafter be
promulgated for the safe and efficient operation of the Airport.  In addition to the rights of closure granted
above, the Port Authority may, at any time, temporarily or permanently close,
or consent to or request the closing of, any such roadway, taxiway and any
other area at the Airport presently or hereafter used as such, so long as a reasonably
equivalent means of ingress and egress remains available to the Lessee.  The Lessee hereby releases and discharges
the Port Authority, and all municipalities and other governmental authorities,
and their respective successors and assigns of and from any and all claims,
demands or causes of action which the Lessee may now or at any time hereafter
have against any of the foregoing, arising or alleged to arise out of the
closing of any way or other area, whether within or outside the Airport provided
a reasonably equivalent means of access is available.  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 streets, ways and walks near the Premises.


 


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Section
46.            Restrictions on Use
of Passenger Terminal Frontage Roadways – Use of Airport Taxi Dispatchers and
Roadways Frontage Management


 


(a)           The
Lessee understands that the Port Authority presently has in effect and has
planned various physical improvements and policies concerning and affecting the
use of vehicular roadways in the Central Terminal Area (“CTA”) of the Airport
for the limitation and control of traffic thereon including the limitation and
control of vehicular traffic on the Terminal and vehicular traffic moving
between the Air Terminal Highways, as designated from time to time by the Port
Authority in the CTA of the Airport, and the vehicular roadways on the Terminal
connecting to the said Air Terminal Highways. 
These improvements and policies, both in existence and planned,
generally include the following:


 


(1)           Restrictions
on the use of roadways in the CTA as set forth in Section 68 hereof entitled
“Ground Transportation Within the Central Terminal Area” and Section 67 hereof
entitled “Ground Transportation.”


 


(2)           The
use of airport taxi dispatching services (as generally set forth in paragraph
(b) hereof) where the Port Authority, either itself or through its contractor,
utilizes at passenger terminals under the control of the Port Authority and
makes available to passenger terminals at the Airport operated by others, the
services of taxi dispatchers to assist in the expeditious and orderly flow of
taxicabs to and from passenger terminals at the Airport.


 


(3)           The
use of a central taxi holding and dispatching system for the Airport in
conjunction with the use of taxi dispatchers at the passenger terminals at the
Airport.


 


(4)           The
designation of specified portions of the vehicular roadways on the Terminal for
limited use exclusively by certain types of ground transportation vehicles
and/or certain types of ground transportation carriers for the loading and
unloading of passengers and their baggage.


 


(5)           The
planning and construction of improvements to increase the capacity of roadway
frontages at the passenger terminals.


 


(b)           The
Lessee agrees to restrict from the Terminal during the time period or time
periods, as may be specified by the Port Authority from time to time (each such
period being herein referred to as a “Taxi Dispatcher Period”), all taxicabs
except those taxicabs which are discharging passengers at the Terminal and
those taxicabs which are requested by a taxi dispatcher stationed on the
Terminal and dispatched through the airport central taxi holding and
dispatching facility (herein called the “Airport Central Taxi Stack”) to the
Terminal.  Further, during any Taxi
Dispatcher Period the Lessee agrees to take and accept from the Port Authority,
and permit the stationing at an appropriate location or locations on the
Terminal, of a taxi dispatcher or taxi dispatchers


 


75

















 


and the establishment of a
taxicab waiting line on the Terminal of such number of vehicles as shall be
specified by the Port Authority from time to time.  A taxi dispatcher or taxi dispatchers when located on the
Terminal shall provide the sole and exclusive dispatch of taxicabs to the
Lessee’s passengers and others desiring the use of a taxicab from the Terminal
and shall perform such other duties and functions in connection therewith as
may be specified by the Port Authority from time to time.  The Lessee agrees to permit the Port
Authority to install on the Terminal such fixtures, equipment and improvements
including, but not limited to, taxi dispatcher shelters, telephones, radio
transceiver and transponder receiving devices as may be necessary or reasonably
desired by the Port Authority in connection with the activities and operations
of the taxi dispatchers.  The Lessee
understands and agrees that all expenses of the Port Authority associated with
the implementation and operation of the taxi dispatchers on the Airport
including, but not limited to, the taxi dispatchers on the Terminal and the
construction, maintenance and operation of the Airport Central Taxi Stack shall
be included in and payable through the aircraft flight fees at the Airport and
will be accorded the same cost recovery treatment as the Air Terminal Highway
is accorded for such purposes under the General Airport Agreement and the
calculation of other fees and charges under other existing agreements and
policies at the Airport, and under any agreements which may be entered into and
any policies which may be implemented, in the future, including agreements and
policies to replace such existing agreements and policies or the General
Airport Agreement.


 


(c)           In
connection with and furtherance of the Port Authority’s policies concerning
ground transportation on the Airport, the operation of the Consolidated
Counters as set forth in Section 66 entitled “Ground Transportation Services”,
the operation of taxi dispatchers and the Airport Central Taxi Stack as set
forth in this Section, and the provisions governing ground transportation
within the Central Terminal Area as set forth in Section 68 hereof entitled
“Ground Transportation within the Central Terminal Area”, the Lessee hereby
agrees that, from time to time, the Port Authority may designate and specify
appropriate areas of roadways and curbs located on the Terminal, for the
purpose of segregated and exclusive use by separate categories of vehicles,
including but not limited to buses, taxicabs, private automobiles and other
vehicles, and use by separate categories of ground transportation carriers (including
but not limited to Port Authority permittees) as may be designated by the Port
Authority, from time to time, for the purpose of loading and unloading
passengers and their baggage.  The
Lessee shall prohibit the operation of all other types of vehicular traffic on
the roadways on the Terminal used for the loading and unloading of passengers
and their baggage and shall prohibit parking or stopping except in the areas
designated as aforesaid.  Designated
areas shall be clearly indicated by the Lessee by appropriate signing and
marking on the Terminal as shall be directed or approved from time to time by
the Port Authority.  The Lessee shall
permit the Port Authority to install on the Terminal such fixtures, equipment
and improvements, including, but not limited to transponder receiving devices
and other vehicular tracking and monitoring devices; and the Lessee shall,
through the use of appropriate and sufficient means including, but not limited
to, removing unauthorized parked vehicles from the Terminal, security guards
and other personnel stationed on the Terminal in the area of the said roadways,
require that the limitations and restrictions


 


76

















 


established hereunder by the
Port Authority on the use of the said roadways are complied with and enforced
during any Taxi Dispatcher Period and at other times as may be directed by the
Port Authority (which compliance and enforcement may be directed on a 24-hour
basis).


 


(d)           The
Lessee understands that the proper limitation and control of traffic on
passenger terminal frontage roads has an impact on the proper and efficient
operation of the Air Terminal Highway system of the Airport and the Lessee
agrees, for so long as the same is made available by the Port Authority, to
either accept from the Port Authority or from the Port Authority contractor
providing the service of limiting and controlling traffic on passenger terminal
frontage roads from time to time and to pay for the frontage management
services at the rate and in a manner which shall be applicable uniformly
throughout the Airport or to provide substantially similar services itself.


 


(e)           The
Lessee understands that the Port Authority considers the provisions of this
Section and the use of the Lessee’s passenger terminal roadway areas of the
utmost importance to the efficient operation of the Air Terminal Highway on the
Airport and to the fulfillment of the Port Authority’s governmental function to
provide, maintain, develop, and operate the Airport; that the efficient use and
operation of the Air Terminal Highway requires that the Lessee, in the
operation and use of its passenger terminal facilities under this Lease shall
utilize and cooperate fully in all respects in the operation and implementation
of the provisions of this Section to the end that the Air Terminal Highway,
including ingress thereto and egress therefrom, will operate in the most
efficient manner; and that the Port Authority does not by this Lease intend to
enter into any agreement, understanding, or commitment which will interfere
with, limit, restrict, hinder, or prevent in any way, the efficient
development, implementation and operation of the Air Terminal Highway and the
rights and discretion of the Port Authority with respect thereto.


 


(f)            The
Port Authority has advised the Lessee that it is the intention of the Port
Authority that all Aircraft Operators which are similarly situated will be
treated in a similar manner with respect to the payment, operation and use of
the taxi dispatchers and the Airport Central Taxi Stack as generally set forth
in paragraph (b) above and with respect to the separation, designation and use
of specific areas of roadways and curbs in the Terminal for exclusive use by
separate categories of vehicles and ground transportation carriers as generally
set forth in paragraph (c) above.


 


Section 47.            Maintenance Employees


 


The Lessee shall at all times during the term of this Agreement on a
twenty-four hour, seven-day a week basis maintain sufficient qualified
personnel at the Airport including but not limited to licensed electricians and
plumbers, who shall be qualified to perform the maintenance obligations of the
Lessee under this Agreement and particularly be able to respond to all
emergencies.


 


77

















 


Section 48.            Quiet Enjoyment


 


The Port Authority covenants and agrees that as long as the Port
Authority remains the lessee of the Airport the Lessee, upon paying all rentals
hereunder and performing all the covenants, conditions and provisions of this
Agreement on its part to be performed, shall and may peacefully and quietly
have and enjoy the Premises free of any act or acts of the Port Authority
except as expressly agreed upon in this Agreement.


 


Section 49.            Lessee’s Financial Condition –
Limitation of Term Lease – Triggering Events


 


(a)           If
any one or more of the Triggering Events listed in the exhibit annexed hereto,
hereby made a part hereof and marked “Exhibit 49.1” (hereinafter called
“Exhibit 49.1”), shall occur, then:


 


(1)           with
respect to the Triggering Event listed in paragraph (1) of Subdivision II of
Exhibit 49.1, seven (7) days following the occurrence of such Triggering Event;
or


 


(2)           with
respect to the Triggering Event listed in paragraph (3) of Subdivision II of
Exhibit 49.1, ten (10) business days following the occurrence of any such
Triggering Event;


 


the term of this Agreement and the letting hereunder shall be deemed
terminated, and the Lessee shall thereafter be a hold-over tenant, on a
month-to-month periodical basis, of the Port Authority.  Termination hereunder shall be and operate
as a conditional limitation.  In the
event any court of competent jurisdiction shall not give full and complete
effect to this termination provision and its operation as a conditional
limitation, the Lessee and the Port Authority agree, as a condition of this
Agreement, and not merely as a covenant, that this Agreement and the stated
term of the letting hereunder shall nonetheless, from and after the effective
date of termination provided above, be deemed to have expired.


 


(b)           Without
limiting this Section or any term or provision hereof, and without limiting any
term or provision of Exhibit 49.1, the Lessee agrees that:


 


(1)           It
shall meet with representatives of the Port Authority as described below and
provide to said representatives the information described below during such
scheduled meetings and at any other time as requested by the Port Authority;
and


 


(2)           If
requested by the Port Authority, the Lessee shall deliver to the Port
Authority, (a) as soon as available, but not later than forty-five (45) days
after the close of each fiscal quarter, the consolidated profit-and-loss
statement of the Lessee or of the Lessee’s parent company which shall fairly
and substantially reflect the Lessee’s financial and operating condition for
such fiscal quarter, to be accompanied by a schedule


 


78

















 


setting forth for each fiscal
quarter the Lessee’s enplanement load factor, available seat miles (ASM),
revenue passenger miles (RPM), cost per ASM and yield per RPM, each certified
by a responsible officer of the Lessee as accurate and complete, (b) within
five (5) days after filing with the Department of Transportation, a copy of
each Form 41 and (c) within five (5) days after the same becomes available, but
not later than ninety (90) days after the close of each of its fiscal years, a
complete copy of the Lessee’s Annual Report or equivalent which shall fairly
and substantially reflect the Lessee’s financial and operating condition for
such fiscal year, which shall include consolidated financial statements of the
Lessee which shall include the consolidated balance sheet of the Lessee as of
the close of such year, and the consolidated statement of operations and
statement of changes in financial position of the Lessee for such year,
certified by an independent certified public accountant.


 


(c)           There
shall be an annual meeting with representatives of the Port Authority and with
the chief operating officer or principal financial officer of the Lessee on the
last business day of the month of April, or on such other day as may, from time
to time, be agreed upon by the Lessee and the Port Authority to review the
financial and operating performance of the Lessee.  The foregoing provisions with respect to the said meetings on the
last business day of the month of April shall be subject to the Lessee’s right
to reschedule by sending to the Port Authority a written notice prior to the
first day of said month setting forth four (4) alternative business days within
said month of April.  The Port Authority
shall notify the Lessee of its selection of the day for the next annual meeting
within ten (10) days of its receipt of the said notice of the Lessee, if
any.  The review shall include but not
be limited to the furnishing of the following information regarding the Lessee
to the Port Authority by the Lessee and the discussion of same:


 


(1)           Financial
data including without limitation Form 41 filings with the Department of
Transportation and any other statement which will reflect the financial and
operating condition of the Lessee.


 


(2)           Monthly
traffic data including passengers, aircraft departures, available seat miles
and revenue passenger miles.


 


(3)           Monthly
load factors and any performance indicator filed with the United States
Department of Transportation including, without limitation, on-time performance
and customer complaints received.


 


(d)           It
is the position of the Lessee that all or portions of the information it has
agreed to furnish the Port Authority hereunder is of a confidential
nature.  The Port Authority agrees that,
unless required to do so pursuant to any legal obligations imposed upon the
Port Authority requiring public disclosure of information, or pursuant to
freedom of information policy adopted or which may be adopted by its
Commissioners, it shall not deliberately convey the same to any private Person.


 


(e)           The
Lessee shall submit to the Port Authority a statement at any time during the
term of the letting signed by the Treasurer of the Lessee notifying the


 


79

















 


Port Authority that a
Triggering Event or Triggering Events listed in Exhibit 49.1 has or have
occurred and the date of the occurrence thereof, provided, however, that
failure to give any such notice shall not affect the occurrence of any
Triggering Event or the consequences thereof hereunder.


 


(f)            If
the Lessee has, by notice, advised the Port Authority that it reasonably
believes that any of the Triggering Events which are listed in Exhibit 49.1
hereof and constitute events which would result in termination pursuant to this
Section either are anticipated to occur within forty-five (45) days of said
notice, or has or have already occurred, or if in fact any Triggering Event or
Triggering Events has or have occurred, or the Port Authority believes that the
same has or have occurred without receipt of any notice from the Lessee, as
aforesaid, then:


 


(1)           the
Lessee may, at any time prior to the termination of the letting, by notice,
request that the Port Authority waive the occurrence of one or more of the
Triggering Events, and the effect thereof hereunder, for a period of time to be
determined by the Port Authority and to be contained in a letter agreement to
be prepared by the Port Authority and executed by the Port Authority, which
shall be effective upon its execution by the Lessee; or


 


(2)           the
Port Authority may, at any time prior to the termination of the letting, in its
sole discretion and without a prior request from the Lessee, waive the
occurrence of one or more of the Triggering Events, and the effect thereof
hereunder, for a period of time to be determined by the Port Authority and to
be set forth in a notice from the Port Authority to the Lessee.  Service of a notice hereunder shall not in
and of itself imply or be deemed to imply that a Triggering Event has occurred.


 


(3)           The
Port Authority shall have no obligation to take either of the above two actions
in paragraphs (f) (1) and (f)(2) above.


 


(g)           Although
it is hereby specifically acknowledged and agreed that the aforesaid
month-to-month periodical tenancy described in paragraph (a) above of this
Section, if any should occur hereunder, is terminable by either party in
accordance with law and that the following provision shall have no effect
whatsoever on the right of either party to so terminate.  It is further understood that if four (4)
consecutive calendar quarters have elapsed after a Triggering Event has
occurred during which time the Lessee is in occupancy of the Premises as a
month-to-month tenant, and during such period none of the Triggering Events
listed in Exhibit 49.1 have occurred or continue to occur, the Lessee is not in
default in the payment of rental or any other provision of its month-to-month
tenancy and neither the Port Authority nor the Lessee has terminated the
month-to-month tenancy by notice to the other, then upon request by either
party to the other, the parties will enter into a supplementary agreement to be
prepared by the Port Authority and to be promptly executed by the parties
hereto which would provide for the re-establishment of a tenancy between the
Port Authority and the Lessee on a fixed term basis in accordance with all of
the terms and provisions of this Lease, and upon said


 


80

















 


execution the Lease, as the
same may theretofore have been supplemented, amended or extended, shall have
the fixed term stated in the Lease.


 


Section 50.            This Section has Been Intentionally Left
Blank


 


Section 51.            This Section has Been Intentionally Left
Blank


 


Section 52.            Purchase of Property


 


The Port Authority shall have the option from time to time exercisable
by notice to the Lessee effective on the expiration or earlier termination of
the letting of the Premises hereunder, or any part thereof, to purchase all, or
such part as the Port Authority elects, of the Lessee’s Personal Property
(including trade fixtures but excluding ground vehicles) including without
limiting the generality of the foregoing any system for handling baggage, any
counters, and any passenger loading bridges, as and to the extent any of the
foregoing are personal property, which may at the time of the giving of such
notice have been installed or placed on the Terminal.  In the event the Port Authority exercises its option to make a
purchase, the Port Authority shall pay to the Lessee a sum equal to the
reasonable value of the Lessee’s Personal Property (including trade fixtures)
purchased.  The Lessee hereby agrees
that it shall use reasonable commercial efforts so that on the effective date
of the purchase and sale none of the aforesaid items shall be subject to any
lien, security interest or other encumbrance, and if after the Lessee having
used such reasonable commercial efforts any such property remains subject to
any lien, security interest or other encumbrance the reasonable value of such
property shall be reduced to properly reflect such lien, security interest or
other encumbrance. Upon request of the Port Authority the Lessee will execute a
bill of sale or such other document of conveyance as the Port Authority may
request to transfer title to the aforesaid items to the Port Authority
(including a warranty of title to the Port Authority) and the Port Authority
shall pay the purchase price.  Further,
the Lessee shall from time to time execute such other documentation as the Port
Authority may require and prepare evidencing the option of the Port Authority,
as herein provided, to purchase the aforesaid personal property, including
without limitation, security agreements and filings pursuant to the Uniform
Commercial Code.


 


Section 53.            Assumption of Maintenance and Repair of
the Terminal by the Port Authority


 


(a)           The
following terms when used in this Agreement shall have the respective meanings
given below:


 


(1)           “Assumable
Maintenance and Repair” shall mean the obligation of the Lessee to clean,
maintain, perform janitorial services and perform structural and non-structural
improvements, repairs and rebuilding at the Terminal as such obligations are
set forth in:


 


81

















 


(i)            paragraphs (a) and (b) of Section 10 hereof
entitled “Care, Maintenance, Rebuilding and Repair by the Lessee”; and


 


(ii)           Section 6 hereof entitled “Compliance with
Governmental Requirements” insofar as laws, ordinances and governmental rules,
regulations, orders, requirements and directions require structural and
non-structural improvements, alterations or repairs of the Terminal.


 


(2)           The
“Cost of Assumable Maintenance and Repair” shall, for each calendar year,
consist of the sum of the “Operation and Maintenance Cost” and the “Annual
Capital Cost” which shall both be determined as follows:


 


(i)            The Port Authority will determine the total
of all costs incurred or accrued during each calendar year in connection with
the Assumable Maintenance and Repair in accordance with normal Port Authority
accounting practice and as follows:  The
Port Authority will apportion Assumable Maintenance and Repair performed
between “operation and maintenance” and “capital work”.  The cost of operation and maintenance is
hereinafter called the “Operation and Maintenance Cost” and the cost of the
capital work is hereinafter called the “Capital Cost”.


 


(A)          Operation and Maintenance Cost for each
calendar year shall consist of the following expenditures for, in connection
with, or related to operation and maintenance:


 


(aa)         On-the-job payroll costs of employees and
supervisory personnel (including Airport supervisors, foreman and clerks),
including, but not limited to, contributions to any retirement system or the
cost of or participation in any pension plans or the like, social security, old
age, survivor’s, disability and unemployment insurance and other insurance costs,
sick leave pay, holiday, vacation, authorized absence and severance pay, other
employee fringe benefits and any other payments made or costs incurred whether
pursuant to law or by Port Authority policy to or with respect to said
employees and personnel;


 


(bb)         The cost (including rental charges) of
materials, equipment, supplies and utilities (including but not limited to,
electricity, water and phone);


 


(cc)         Payments to contractors and any other third
Persons, firms or corporations for work performed or services rendered;


 


(dd)         The
cost of any performance bond or bonds;


 


(ee)         The
cost of insurance;


 


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(ff)           Any other direct costs as charged under the
Port Authority’s normal accounting practice;


 


(gg)         Twenty-five percent (25%) of the sum of all of
the foregoing items (aa) through (ff).


 


(B)           Capital
Cost for each calendar year shall consist of the following expenditures, for,
in connection with, or related to capital work:


 


(aa)         On-the-job payroll costs of employees and
supervisory personnel (including Airport supervisors, foremen and clerks)
including but not limited to, contributions to any retirement system or the
cost of or participation in any pension plans or the like, social security, old
age, survivor’s, disability and unemployment insurance and other insurance
costs, sick leave pay, holiday, vacation, authorized absence and severance pay,
other employee fringe benefits and any other payments made or costs incurred
whether pursuant to law or by Port Authority policy to or with respect to said
employees and personnel;


 


(bb)         The cost (including rental charges) of
materials, supplies, equipment and utilities (including but not limited to
electricity, water and phone);


 


(cc)         Payments to contractors and any other third
Persons, firms or corporations for work performed or services rendered;


 


(dd)         The
cost of any performance bond or bonds;


 


(ee)         The
cost of any insurance;


 


(ff)           Payments to independent consultants,
architects and engineers engaged or retained by the Port Authority;


 


(gg)         Any other direct costs as charged under the
Port Authority’s normal accounting practice;


 


(hh).        Financial expense on the foregoing computed in
accordance with Port Authority accounting practice;


 


(ii)           Ten percent (10%) of the sum of all the
foregoing items (aa) through (hh).


 


(C)           “Annual
Capital Cost” shall mean the total of all annual amounts based upon the
amortization of the Capital Cost for each calendar year over the shorter of the
weighted average period of the useful life of the capital work for each
calendar year, or the remaining term of this Agreement as determined by the
Port


 


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Authority.  Each annual amount shall be determined on
the basis of an equal annual payment method. 
The rate used in determining the Annual Capital Cost for all of the
annual amounts shall be for each successive calendar year an annual percentage
rate equal to the sum of (i) the average of all the weekly indices of the Bond
Buyer Revenue Bond Index as reported in the publication “The Bond Buyer” for
the 52-week period in the immediately preceding calendar year and (ii) three
percentage points. For purposes of example and illustration only, The Bond
Buyer Revenue Bond Index for the week ending August 2, 2001 was 5.40% as set
forth in the table entitled “Bond Buyer Indices” on page 37 of The Bond Buyer,
Vol. 337 No. 31195, New York, N.Y., dated August 3, 2001.  In the event that The Bond Buyer or its
weekly Bond Buyer Revenue Bond Index shall be discontinued during the term of
the letting hereunder, a comparable substitute for such Index shall be mutually
agreed upon in writing by the Lessee and the Port Authority within thirty (30)
days after discontinuance.  In the event
that the Port Authority and the Lessee shall fail to agree upon such a
substitute within the time hereinabove specified then upon notice of either
party such dispute shall be disposed of by arbitration in accordance with the
then existing rules of the American Arbitration Association or any successor
association.  One half of the cost of
said arbitration shall be borne by the Port Authority and the other half of
said cost shall be borne by the Lessee.


 


(b)           Commencement
of Performance of Assumable Maintenance and Repair


 


(1)           The
“Assumable Maintenance and Repair Date” shall be the date, from time to time,
determined as follows:


 


(i)            The Port Authority may at any time and from
time to time during the term of this Agreement advise the Lessee, by notice, of
one or more deficiencies in the performance by the Lessee of the Assumable
Maintenance and Repair, or in any portion, or portions, thereof.  Such notice shall specify the aforesaid
deficiencies in reasonable detail.  In
such notice the Port Authority shall also advise the Lessee of what reasonable
period of time shall be afforded the Lessee to cure such deficiencies and the
Port Authority shall advise the Lessee therein when and where its
representatives may meet with representatives of the Port Authority to discuss
the foregoing.  The Port Authority will
consider the response, if any, of representatives of the Lessee, as given at
the aforesaid meeting, or during such period for a further response from the
Lessee, as the Port Authority may, in its sole discretion, afford the Lessee.  The Port Authority may, after the occurrence
of the above, advise the Lessee, by notice, that it has elected not, at that
time, to assume the performance of the Assumable


 


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Maintenance
and Repair.  The Port Authority, in its
sole discretion, may condition such an election on such terms as it chooses to
include in the notice, including the taking of certain remedial or other
actions by the Lessee to the continuing satisfaction of the Port Authority.  The fact that the Port Authority may
previously have given a notice under this subparagraph but has subsequently
elected on one or more occasions not to assume the performance of the Assumable
Maintenance and Repair or having on one or more occasions assumed the Assumable
Maintenance and Repair and thereafter returned the said obligations to the
Lessee pursuant to the provisions hereof, shall not be deemed to limit the
right of the Port Authority to, at any time, give another notice of one or more
deficiencies pursuant to this subparagraph or notice pursuant to paragraph
(b)(1)(ii) below.


 


(ii)           The Port Authority may at any time and from
time to time during the term of this Agreement, but only after the issuance of
a notice described above and giving the opportunity to cure as provided above,
advise the Lessee, by notice, that commencing on a date to be specified in such
notice, which shall be not less than ninety (90) days after the giving thereof,
the Port Authority will perform the Assumable Maintenance and Repair.  Such date as the same may be established
from time to time shall be the “Assumable Maintenance and Repair Date”.


 


(c)           Performance
of the Assumable Maintenance and Repair


 


(1)           The
Port Authority shall perform the Assumable Maintenance and Repair from and
after the Assumable Maintenance and Repair Date with the Cost of Assumable
Maintenance and Repair to be paid by the Lessee as provided in paragraph (d)
below.


 


(2)           The
Lessee and the Port Authority each acknowledge and agree that the rights and
obligations of the Port Authority and the Lessee hereunder are limited to the
performance of all of the Assumable Maintenance and Repair by the Port
Authority and not of particular portions thereof.


 


(3)           The
Lessee shall give its full cooperation to the Port Authority so as to better
enable the Port Authority and its contractors to perform the Assumable
Maintenance and Repair and the Port Authority and its employees, agents and
contractors shall have the right to enter the Terminal at all reasonable times
to perform the Assumable Maintenance and Repair.


 


(d)           Payment
for the Assumable Maintenance and Repair


 


The Cost of the Assumable Maintenance and Repair shall be payable by
the Lessee from and after the Assumable Maintenance and Repair Date as follows:


 


(1)           The
Port Authority shall establish monthly interim billing rates.  Such billing rates shall be based upon
determinations by the Port Authority of its estimate of the Cost of the
Assumable Maintenance and Repair for the calendar year or; for the portion of
the calendar year in which the Assumable Maintenance and Repair Date, if less
than a calendar year, shall occur or for the portion of the calendar year
during which the term of this Agreement shall expire, if less than a calendar
year.  Such determinations shall be
based upon the prior calendar year’s experience, if any, and upon other such
reasonable basis as the Port Authority shall select. The Port Authority may


 


85

















 


prospectively revise its
billing rates during any calendar year. 
The Lessee shall pay current billings they are received.


 


(2)           As
soon as practicable after the expiration of each calendar year, the Port
Authority shall determine the actual Cost of the Assumable Maintenance and
Repair for the preceding calendar year and shall determine the amounts payable
by the Lessee.  In the event the
Assumable Maintenance and Repair Date does not fall on the first day of a
calendar year or in the event the term of this Agreement expires on a day other
than the last day of a calendar year the Annual Capital Cost for said calendar
year shall be prorated based on the number of days during said calendar year
during which the Port Authority provides the Assumable Maintenance and
Repair.  Corrected billings based upon
such determination shall thereupon be rendered by the Port Authority to the
Lessee and if any monies are due to the Port Authority they shall be promptly
paid by the Lessee and if any monies are due to the Lessee they shall be
credited to it.


 


(e)           Limitation
of Port Authority Obligations and No Waiver of Rights of Port  Authority


 


(1)           The
right and obligation of the Port Authority to perform the Assumable Maintenance
and Repair shall not release, waive or affect the obligations of the Lessee
with respect thereto set forth in any provision of this Agreement, nor limit,
waive or effect any rights of termination with respect thereto, including but
not limited to, the right of the Port Authority to terminate this Agreement,
whether before or after the occurrence of the Assumable Maintenance and Repair
Date pursuant to Section 20 hereof entitled “Termination by the Port
Authority”.


 


(2)           The
Port Authority shall not be obligated to the Lessee to furnish the Assumable
Maintenance and Repair at any time while the Lessee shall be in default under
this Agreement (except for the Lessee’s default in performing the Assumable
Maintenance and Repair).


 


(3)           No
failure, delay or interruption in performing the Assumable Maintenance and
Repair by the Port Authority shall be or be construed to be an eviction of the
Lessee or grounds for the diminution or abatement of rentals, fees, or other
charges, or (unless resulting from the negligence or wilful failure of the Port
Authority) shall be grounds for any claims by the Lessee for damages, consequential
or otherwise.


 


(4)           The
Port Authority shall be under no obligation to perform the Assumable
Maintenance and Repair if and to the extent that during any period such
performance shall be prohibited, limited 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.  Furthermore, the obligation of the Port Authority to perform the
Assumable Maintenance and Repair shall be deemed limited and modified during
any period that


 


86

















 


repair or rebuilding of the
Terminal is required pursuant to Section 10 hereof entitled “Care, Maintenance,
Rebuilding and Repair by the Lessee” or Section 12 hereof “Damage to or
Destruction of the Terminal”.


 


(f)            Return
of the Assumable Maintenance and Repair to the Lessee


 


(1)           At
any time and from time to time after the Port Authority may have exercised its
rights under this Section to perform the Assumable Maintenance and Repair the
Port Authority shall have the right, upon notice to the Lessee to return the
obligation to perform the Assumable Maintenance and Repair to the Lessee
commencing on a date to be specified in such notice which date shall be not
less than thirty (30) nor more than ninety (90) days from the giving of such
notice.  Such date shall be the “Return
Date of the Assumable Maintenance and Repair”. 
From and after the Return Date of the Assumable Maintenance and Repair
the Lessee shall perform the Assumable Maintenance and Repair pursuant to and
in accordance with all the terms and provisions of the Lease including, but not
limited to, this Section.


 


(2)           From
and after the Return Date of Assumable Maintenance and Repair the Lessee shall
continue to pay the Cost of Assumable Maintenance and Repair, it being
understood, that nothing herein shall release or be deemed to release the
Lessee from the payment to the Port Authority of the Cost of Assumable
Maintenance and Repair including that portion thereof consisting of the Annual
Capital Cost in accordance with paragraph (d) hereof arising prior to the
Return Date of the Assumable Maintenance and Repair; nor shall anything herein
require the Port Authority to make any calculation or determination with
respect to the Cost of Assumable Maintenance and Repair prior to the time
specified therefor in paragraph (d) hereof.


 


Section 54.            Joint Periodic Condition Survey


 


In addition to and without limiting, Section 6 hereof entitled
“Compliance with Governmental Requirements”, Section 7 hereof entitled “Rules
and Regulations”, Section 8 hereof entitled “Various Obligations of the
Lessee”, Section 9 hereof entitled “Prohibited Acts”, Section 10 hereof
entitled “Care, Maintenance, Rebuilding and Repair by the Lessee”, Section 11
hereof entitled “Insurance”, Section 12 hereof entitled “Damage to or
Destruction of Terminal”, Section 15 hereof entitled “Obstruction Lights”,
Section 16 hereof entitled “Additional Rent and Charges”, Section 17 hereof
entitled “Rights of Entry Reserved”, Section 26 hereof entitled “Surrender”,
Section 53 hereof entitled “Assumption of Maintenance and Repair of the
Terminal by the Port Authority”, Section 56 entitled “Environmental
Obligations” and Section 61 entitled “Storage Tanks” or any other term,
provision, covenant or condition of this Agreement, the Lessee and the Port
Authority hereby agree that, in addition to any other inspection of the
Terminal which may be made under any other Section of this Agreement or
otherwise, a Condition Survey (as hereinafter defined) of the Terminal shall be
conducted by the Condition Survey Contractor (as hereinafter defined) at the
time period specified below subject to and in accordance with the following
terms and conditions:


 


87

















 


(a)           As
used herein the following terms shall have the following meanings:


 


(1)           “Condition
Survey” shall mean an inspection by the Condition Survey Contractor of the
Terminal, including without limitation the then current state of cleaning,
maintenance, janitorial services, painting, structural and nonstructural
conditions, surface and subsurface conditions, environmental conditions,
lighting of building areas, ramp and apron areas, and the condition of
utilities and utility systems, fire-fighting and fire protection equipment and
systems, communications and communications systems, antipollution systems and
devices, fuel facilities and systems, and the Lessee’s fixtures, equipment and
personal property, and also including the items mentioned or covered by
Sections 6, 7, 8, 9, 10, 11, 12, 15, 16, 17, 26, 53, 56 and 61 of this
Agreement;





(2)           “Condition
Survey Contract” shall mean and refer to a contract awarded to a Condition
Survey Contractor, or entered into between the Port Authority and a Condition
Survey Contractor, for the performance by such Condition Survey Contractor of a
Condition Survey at any of the applicable times as specified in subparagraph
(b) hereof;


 


(3)           
“Condition Survey Contractor” shall mean and refer to the contractor to whom
the Condition Survey Contract is awarded pursuant to subparagraph (b) hereof
which Condition Survey Contractor shall be an independent and reputable
engineering firm, licensed or authorized to do business in the State of New
York;


 


(4)           “Condition
Survey Report” shall mean the report prepared by the Condition Survey
Contractor under its Condition Survey Contract after its completion of the
Condition Survey work under its Condition Survey Contract including without
limitation any and all recommendations for repair, maintenance, rebuilding and
cleaning of all items or areas covered by the Condition Survey;


 


(5)           “Costs
of the Condition Survey” shall mean and include with respect to each Condition
Survey all amounts paid and expenses incurred by the Port Authority, including
all interest, costs, damages and penalties, in accordance with the provisions
of Section 16 entitled “Additional Rent and Charges” for, relating to or in
connection with Condition Survey work to be performed under the Condition
Survey Contract;


 


(6)           “Report
Date” shall mean the date of the Port Authority’s written notice to the Lessee
by which the Port Authority delivers to the Lessee the Condition Survey Report.


 


(b)           No
earlier than sixty (60) days preceding the last day of the month which
constitutes the twelfth month preceding the Expiration Date, the Port Authority
may advise the Lessee of a proposed Condition Survey Contract (which may
include all or particular portions of the items described in paragraph (a)(i)
above) and including the


 


88

















 


name of the proposed Condition
Survey Contractor who will perform a Condition Survey and the proposed scope of
the proposed Condition Survey Contract and the proposed fee structure of the
contract.  Within thirty (30) days after
the Port Authority’s notice to the Lessee, the Lessee shall advise the Port Authority
in writing of its concurrence or objection to the proposed Condition Survey
Contract.  In the event the Lessee fails
to respond during the said time period, said nonresponse shall be deemed a
concurrence and the Port Authority shall proceed with the said Condition Survey
Contract for purposes of performing a Condition Survey.  In the event the Lessee notifies the Port
Authority of its objections to the proposed Condition Survey Contract or
Condition Survey Contractor, the parties hereby agree to consult with each
other in good faith to resolve such dispute. 
If such resolution is not reached within a reasonable period of time not
to exceed thirty (30) days, then the Port Authority, if it so elects, shall
make a determination as to the issue or issues in dispute.  The parties hereby agree that the Port
Authority’s determination of said issues, including the Condition Survey
Contract and the Condition Survey Contractor shall be final.


 


(c)           It
is hereby expressly understood and agreed that the selection of each Condition
Survey Contractor for the purposes of a Condition Survey and including the
award of any Condition Survey Contract to such Condition Survey Contractor
shall be subject to and consistent with the Port Authority’s policies and
practices for the selection and award of similar contracts and the Port
Authority shall have as full a right to require the use of competitive bidding
and award, or other basis of award, for any such Condition Survey Contract as
if the work on such contract were being performed solely for the Port
Authority; and further that the Condition Survey Contract shall contain terms
and conditions which are standard to Port Authority contracts or consistent
with such standard provisions.


 


(d)           With
respect to each Condition Survey, all Costs of the Condition Survey shall be
shared equally between the Port Authority and the Lessee.  Accordingly, the Lessee hereby agrees to pay
to the Port Authority fifty percent (50%) of the Costs of the Condition Survey
with respect to each Condition Survey as follows:


 


(1)           The
Lessee shall pay to or reimburse the Port Authority for the Costs of the
Condition Survey as follows: The Port Authority shall after the completion of
the Condition Survey work under a Condition Survey Contract and, if it elects,
also from time to time during the course of the performance of the Condition
Survey work under such Condition Survey Contract, submit to the Lessee a
certificate or certificates setting forth the Costs of the Condition Survey at
the date of each such certificate. 
Within thirty (30) days after the delivery of each such certificate, the
Lessee shall pay to the Port Authority an amount representing fifty percent
(50%) of said Costs of the Condition Survey as such amount is set forth in said
certificate.  Upon its final
determination of the Costs of the Condition Survey, the Port Authority shall
submit to the Lessee a certificate marked “Final” setting forth the final
determination of the Costs of the Condition Survey with respect to each
Condition Survey Contract as reduced by any previous payment with respect to
such Condition Survey Contract, and the Lessee shall and hereby agrees to pay
to the Port Authority within thirty (30) days of such certificate


 


89

















 


an amount representing fifty
percent (50%) of said Costs of the Condition Survey as such amount is set forth
in said certificate; provided, however, that neither the foregoing nor any
certificate delivered by the Port Authority, nor any payment made by the Lessee
shall waive, affect, or impair any right of the Port Authority of review and
audit with respect to the Costs of the Condition Survey and with respect to
each Condition Survey Contract and provided, further, however, that in the
event any such review or audit by the Port Authority requires an adjustment of
the Costs of the Condition Survey the Lessee shall be promptly credited with or
shall pay to the Port Authority all amounts required by such adjustment.


 


(2)           Without
limiting any of the terms and provisions of Section 16 hereof entitled
“Additional Rent and Charges”, any and all amounts required to be paid by the
Lessee under this Section 54 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 part of the rent as set forth in Section 4 hereof
entitled “Rental”.


 


(e)           The
Lessee hereby agrees to and shall commence within ninety (90) days after the
Report Date all items and all action required or recommended to be taken as set
forth in each Contract Condition Survey Report that are necessary or required
to meet the Lessee’s maintenance or repair or any other of its obligations, duties
or responsibilities under this Agreement and the written notice of the Port
Authority delivering said Report, unless the Port Authority expressly advises
the Lessee to the contrary as to any particular item(s), and the Lessee shall
diligently continue the same to completion; provided, however, that any and all
items, action or work related to or affecting or involving fire safety, health,
structural integrity, life safety, security and other emergency response
systems shall be promptly commenced.


 


(f)            The
Lessee hereby agrees that the Condition Survey Contractor shall have all rights
of entry to the Terminal during all reasonable times, and upon reasonable
advance notice, as appropriate or required to perform or complete the Condition
Survey and the Condition Survey Report under the Condition Survey Contract.


 


(g)           It
is expressly understood and agreed that neither the provisions of this Section
including without limitation the right of the Port Authority to have the Lessee
perform and complete the work required by the Condition Survey Report, the
obligation of the Lessee so to perform and complete such work, or any such
performance thereof by the Lessee, any failure of the parties to select a
Condition Survey Contractor, any failure of any Condition Survey Contractor to
perform and complete a Condition Survey Contract, nor any failure by the Lessee
or the Port Authority to pay the Costs of the Condition Survey with respect to
any Condition Survey Contract, or any portion thereof, shall or shall be deemed
to release, waive, affect, restrict or impair any of the obligations, duties,
responsibilities or liabilities of the Lessee under any term, provision,
covenant or condition of this Agreement nor to limit, waive, affect, restrict
or impair any right or remedy of the Port Authority including without
limitation any right of the Port Authority to terminate the letting hereunder
whether before or after the Report Date. 
Without


 


90

















 


limiting the foregoing, it is expressly
understood and agreed that the Lessee shall not postpone or delay any action,
maintenance, rebuilding or repair or other item or thing required to be taken
by the Lessee under any other section of this Agreement.


 


(h)           
Notwithstanding anything to the contrary, the Port Authority shall have the
right, exercisable in its sole and complete discretion, to exclude from the
scope of a Condition Survey with respect to any Condition Survey Contract those
items covered by Section 53 hereof for or during such period or periods, if
any, when the Port Authority has elected to exercise its rights under Section
53 hereof to perform the Assumable Maintenance and Repair.


 


Section 55.            Condition of the Terminal


 


(a)           The
Lessee accepts the Premises in its “as is” condition and the Port Authority
shall not have any responsibility for any work or installation to the Terminal
to make the same usable by the Lessee, to place it in any particular condition
or to reimburse the Lessee for any work or installation as may be made by or on
behalf of the Lessee, the Lessee having exclusive responsibility
therefore.  The Lessee hereby
acknowledges that it has not relied upon any representation or statement of the
Port Authority or its Commissioners, officers, employees or agents as to the
condition of the Terminal.  The Lessee,
prior to any portion of the Terminal becoming a part of the Premises hereunder,
thoroughly examined or shall examine, as the case shall be, such portion of the
Terminal and determined it to be suitable for the Lessee’s operations under the
Lease.


 


(b)           
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 or improper for the conduct
of the Lessee’s operations hereunder so that there is possibility of injury or
damage to life or property.  It is hereby
understood and agreed that whenever reference is made in this Agreement to the
condition of the Premises as of the commencement of the term thereof, the same
shall be deemed to mean the condition of the Premises as of the Effective Date,
and as to the improvements made and the alternation work performed during the
term of this Agreement, in the condition existing after the completion of the
same.


 


Section 56.            Environmental Obligations


 


(a)           For
the purposes of this Lease, the following terms shall have the respective
meaning provided below:


 


(1)           “Condition
Exceptions” shall mean the following:


 


(i)            The remediation or removal of the Existing
Condition;


 


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(ii)           The remediation or removal of Hazardous
Substances in the soil or ground water in, on or under the Premises caused by
the sole acts or omissions of the Port Authority on or after the Effective
Date;


 


(iii)          Fines and penalties arising out of the
Existing Condition if the fines and penalties are imposed due to the failure to
have remediated or removed the Existing Condition; and


 


(iv)          Migrated Hazardous Substances


 


(2)           “Analyzed
Item” shall mean with respect to the ground water each of and “Analyzed Items”
shall mean with respect to the ground water all of the constituents for which
the ground water samples described in Exhibit I were tested and “Analyzed Item”
shall mean with respect to soil each of and “Analyzed Items” shall mean with
respect to soil all of the constituents for which the soil samples described in
Exhibit I were tested.


 


(3)           “Exhibit
I” shall mean the Initial Environmental Report and all Remediation Completion
Reports, if any.


 


(4)           “Existing
Condition” shall mean the levels of Analyzed Items in the soil and ground water
for all portions of the Premises as derived by applying the methodology set
forth in paragraph (i) below to the test results in the Initial Environmental
Survey, as such test results may be superceded and supplemented by the test
results in each Remediation Completion Report in accordance with the provisions
of paragraph (l) of this Section


 


(5)           “Initial
Environmental Report” shall mean the report attached hereto, hereby made a part
hereof and marked “Exhibit I” entitled “John F. Kennedy International Airport
Terminal 6 Baseline Subsurface Investigation” and dated October, 1999.


 


(6)           “Migrated
Hazardous Substance” shall mean (i) any Hazardous Substance that has migrated
onto the Premises from outside the Premises and (ii) any Hazardous Substance
that has migrated onto the Premises from outside of the Premises, provided,
however, a Migrated Hazardous Substance shall in no event include any Hazardous
Substance that has migrated as a result of or in connection with the any act or
omission, including without limitation non-negligent acts and omissions, of the
Lessee or of Persons other than the Lessee which use, occupy or are on the
Premises with the consent of the Lessee.


 


(7)           “Remediation
Completion Report” shall have the meaning set forth in paragraph (l) of this
Section.


 


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(b)           (1)           Without limiting the
generality of any of the other terms and provisions of this Lease and subject
to the terms and provisions of paragraph (b)(2) below, the Lessee hereby
expressly agrees to assume all responsibility for, relieve the Port Authority
from, and reimburse the Port Authority for, any and all risks, claims,
penalties, costs and expenses of any kind whatsoever caused by, arising out of
or in connection with, the condition of the Premises whether any aspect of such
condition existed prior to, on or after the Effective Date, including without
limitation all Environmental Requirements and all Environmental Damages and to
indemnify and hold harmless the Port Authority for all such risks, claims,
penalties, responsibilities, costs and expenses.


 


(2)           It
is hereby agreed and understood that except as set forth in paragraphs (j), (p)
and (q) of this Section the Lessee shall not be responsible for the Condition
Exceptions.


 


(c)           Without
limiting the Lessee’s obligations elsewhere under this Agreement to comply with
all laws, ordinances, governmental rules, regulations and orders which were or
at any time are in effect during the term of the letting under this Agreement,
the Lessee understands and agrees that, except with respect to the Condition
Exceptions which the Lessee is not responsible for pursuant to paragraph (b)(2)
of this Section, it shall be obligated, at its cost and expense, to comply with
and relieve the Port Authority from compliance with all Environmental
Requirements which are applicable to or which affect (i) the Premises with the
exception only of Migrated Hazardous Substances, (ii) the operations of, or
work performed by, the Lessee or others with the consent of the Lessee at the
Premises or the Lessee’s operations at the Airport, (iii) the occupancy and use
of the Premises by the Lessee or by others with its consent or (iv) any
Hazardous Substance which has migrated from the Premises with the exception
only of Migrated Hazardous Substances. 
Nothing in the foregoing shall be construed as a submission by the Port
Authority to the application to itself of any Environmental Requirements;
provided, however, that no immunity or exemption of the Port Authority from any
Environmental Requirements shall excuse compliance or be grounds for
noncompliance on the part of the Lessee. 
Without limiting the generality of the foregoing and as part of the
Lessee’s fulfillment of the foregoing obligations, the Lessee shall be
responsible, at its sole cost and expense and subject to the direction of the
Port Authority, for:


 


(1)           the
preparation of and submission to all applicable Governmental Authorities of any
notice, negative declaration, remedial action workplan, no further action
letter, remediation agreement or any other documentation or information;


 


(2)           the
obtaining of any surety bond or the giving of any other financial assurances;
and


 


(3)           complying
with the provisions of all Environmental Requirements becoming effective on or
relating to the termination, expiration or


 


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surrender of the letting of the
Premises or of any portion thereof under this Agreement, or on the closure or
transfer of the Lessee’s operations at the Premises.


 


(d)           In
addition to and without limiting the generality of the obligations of the
Lessee set forth above and elsewhere in this Agreement, the Lessee shall, at
its sole cost and expense and in accordance with and subject to the provisions
of Section 33 of this Agreement, upon notice from the Port Authority, promptly
take all actions to:


 


(1)           completely
remove and remediate all Hazardous Substances in, on and under the Premises and
at the Airport resulting from or in connection with the use and occupancy of
the Premises by the Lessee or any Affiliate of the Lessee or which have been or
permitted to be disposed of, released, discharged or otherwise placed in, on or
under the Airport by the Lessee or any Affiliate of the Lessee or which have
been disposed of, released, discharged or otherwise placed in, on or under the
Premises during the term of the letting of the Premises under this Agreement or
during the term of any previous agreement between the Lessee or any Affiliate
of the Lessee and the Port Authority covering the Lessee’s or any such
Affiliate’s use and/or occupancy of the Premises or any portion thereof;


 


(2)           except
with respect to the Condition Exceptions which the Lessee is not responsible
for pursuant to paragraph (b)(2) of this Section, remove and remediate all
Hazardous Substances in, on or under the Premises or which have migrated from
or from under the Premises to any other property which any Governmental
Authority or any Environmental Requirement or any violation thereof require to
be remediated or removed; and


 


(3)           except
with respect to the Condition Exceptions which the Lessee is not responsible
for pursuant to paragraph (b)(2) of this Section, remove and remediate all
Hazardous Substances in, on or under the Premises or which have migrated from
or from under the Premises necessary to mitigate any Environmental Damages.


 


(e)           The
obligations set forth in paragraphs (c) and (d) of this Section shall include
but not be limited to the investigation of the environmental condition of the
area to be remediated, the preparation of feasibility studies, reports and
remedial plans and the performance of any removal, remediation, containment,
operation, maintenance, monitoring or restoration work and shall be performed
in a good, safe and workmanlike manner. 
The Lessee shall promptly provide the Port Authority with copies of all
test results and reports generated in connection with such obligations.  Promptly upon completion of such
investigation and remediation, the Lessee shall seal or cap all monitoring
wells and test holes, remove all associated equipment and restore the
remediated property.


 


(f)            Without
limiting the Port Authority’s remedies under this Agreement or at law or in
equity the Port Authority shall have the right during and after the term of the
letting of the Premises under this Agreement to such equitable relief,
including restraining injunctions and declaratory judgments, to enforce
compliance by the


 


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Lessee of its environmental
obligations under this Agreement including without limitation all the Lessee’s
obligations under this Section.  In the
event that the Lessee fails to comply with or perform any of such obligations,
the Port authority (subject to the application of the provisions of Section
20(a)(10) to the extent such application would not result in the violation of
any Environmental Requirement by the Port Authority or by the Lessee) at any
time during or subsequent to the termination, expiration or surrender of the
letting of the Premises or any portion thereof may elect (but shall not be
required) to perform such obligations and upon demand the Lessee shall pay to
the Port Authority as additional rent its costs thereof, including all overhead
costs as determined by the Port Authority. 
For the purposes of this paragraph, the term “cost” shall be as defined
in Section 16 of this Agreement.


 


(g)           Without
limiting any other of the Lessee’s obligations under the Lease and except with
respect to the Condition Exceptions which the Lessee is not responsible for
pursuant to paragraph (b)(2) of this Section, the Lessee shall provide the
General Manager of the Airport at the cost and expense of the Lessee with such
information, documentation, records, correspondence, notices, reports, tests,
results, and certifications and any other information as the Port Authority
shall request in connection with any Environmental Requirements or
Environmental Damages and the Lessee shall promptly acknowledge, swear to, sign
or otherwise fully execute the same. 
The Lessee agrees that any of the foregoing may be filed by the Port
Authority with the appropriate Governmental Authority on behalf of the Lessee
at the Lessee’s cost and expense. 
Further, the Lessee agrees unless directed otherwise by the Port
Authority, to provide the General Manager of the Airport with copies of all
information, documentation, records, correspondence, notices, certifications,
reports, test results and all other submissions provided by the Lessee to a
Governmental Authority and by a Governmental Authority to the Lessee within ten
(10) business days that the same are made available to or received by the
Lessee with respect to any Environmental Requirements or any Environmental
Damages.


 


(h)           (1)           Without limiting the
generality of any provision of this Agreement, in the event that any Environmental
Requirement sets forth more than one compliance standard, the Lessee agrees
that the standard or standards to be applied in connection with any obligation
it may have under this Agreement with respect to said Environmental Requirement
shall be that which requires or permits the lowest level of a Hazardous
Substance; provided, however, in the event such lowest level of a Hazardous
Substance requires or allows the imposition of any restriction of any nature
whatsoever upon the use or occupancy of the Premises or any other portion of
the Airport or upon any operations or activities conducted or to be conducted
on the Premises or the Airport or upon the transfer of the Premises or the
Airport, then the Lessee shall remediate to such a level so that there is no
such restriction placed upon the use and occupancy of the Premises or the
Airport or upon any operations or activities conducted or to be conducted on
the Premises or the Airport.


 


(2)           The
Lessee further agrees that, notwithstanding the terms and conditions of
paragraph (h)(1) above, the Port Authority shall have the right at any


 


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time and from time to time,
acting in its sole discretion and without any obligation whatsoever to the
Lessee or otherwise to do so, to designate any level or levels or standard or
standards of remediation permitted or required under any Environmental
Requirement, and such designation shall be binding upon the Lessee with respect
to its obligations under this Agreement with respect to Environmental
Requirements.


 


(3)           Nothing
in this paragraph (h) shall require or be construed to require the Lessee to
remediate any Analyzed Item below the Existing Condition except as otherwise
required by or as set forth in this Agreement including without limitation as
required by or as set forth in paragraphs (j), (p) and (q) of this Section.


 


(i)            The
methodology to be used for the purpose of this Section to determine for any
Existing Condition the level of an Analyzed Item at any location in, on or
under the Premises shall be for ground water straight line interpolation
methodology utilizing principles of hydrogeologic interpretation, and for soil,
the EPA geostatistical software system applicable at any particular time and,
notwithstanding any other evidence to the contrary including, without
limitation, anything contained in the reports constituting a part of Exhibit I,
the Existing Condition as so determined shall set forth and constitute for all
purposes as between the Lessee and the Port Authority the levels of the
Analyzed Items in the soil and ground water in, on and under the Premises,
except, however, for each location from which soil and/or water samples have
been taken and the tests results thereof constitute a part of the Existing Condition,
for each Analyzed Item that was tested at such location and the test result for
such Analyzed Item is a part of the Existing Condition, the level of such
Analyzed Item at such location shall be the test result of such Analyzed Item
at such location.


 


(j)            (1)           It is expressly
understood and agreed that the proper handling, delivery, treatment, storage,
transportation, disposal and depositing (all of the foregoing being hereinafter
collectively called “Disposal”), whether on or off the Airport, of any soil,
dirt, sand, silt, water, asbestos, lead, PCB’s, demolition or construction
debris or other matter (hereinafter collectively called the “Matter”)
excavated, disturbed or removed by the Lessee (or by any contractor or
contractors of the Lessee) at, from or under the Premises (or any other area of
the Airport ) at any time or times and regardless of the nature or composition
of such Matter, including without limitation, any and all Disposal of said
Matter in connection with the performance of the Lessee’s Construction Work (as
defined Section 2 of this Lease) or the repair, replacement or rebuilding of
the Premises as required under Section 10 of this Agreement, and any and all
remediation and Disposal of said Matter and any and all other remediation and
Disposal (whether soil, upper aquifer or otherwise) necessary, required or
appropriate as a result of, caused by, incidental to or triggered by such
excavation, disturbance or removal of the Matter or arising therefrom, and the
taking or doing of any and all other action or actions necessary, required or
appropriate in connection therewith, shall be the sole and complete
responsibility of the Lessee including, without limitation, all costs and
expenses thereof and any and all Environmental Damages, Environmental
Requirements, claims, penalties and other expenses relating thereto.  The foregoing obligations of the Lessee
shall obtain and apply with full force and effect irrespective of the nature or
source of any


 


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contaminant, pollutant,
chemical, waste or other substance or whether any of the same is Hazardous
Substance or whether any of the same is at a level or levels above or below the
level or levels of any of the Analyzed Items constituting the Existing
Condition or whether there has or has not been any decrease or increase in such
level or levels.  The Lessee shall
perform all of the foregoing in accordance with and subject to all the terms,
provisions, covenants and conditions of this Agreement.


 


(2)           Without
limiting the generality of any other term or condition of this Agreement, title
to any Matter on the Premises or the Airport excavated or removed by the Lessee
and not used at the Premises shall vest in the Lessee upon the excavation or
removal thereof and all such Matter shall be delivered and deposited by the
Lessee at the Lessee’s sole cost and expense to a location off the Airport in
accordance with the terms and conditions of this Agreement and all
Environmental Requirements.  The entire
proceeds, if any, of the sale or other disposition of the Matter shall belong
to the Lessee.


 


(3)           In
the event the Lessee discovers any Hazardous Substance in, on or under the
Premises, the Lessee in reporting such Hazardous Substance shall direct such
report to the attention of such individual at the subject Governmental
Authority as the Facility Manager shall require in order to assure consistency
in the environmental management of the Airport, provided, however,
notwithstanding the foregoing in no event shall the Lessee be required by this
paragraph (j)(3) to violate any Environmental Requirement.


 


(4)           Promptly
upon final disposition of any Hazardous Substance from the Premises or the
Airport, the Lessee shall submit to the Port Authority a “Certification of Final
Disposal” stating the type and amount of material disposed, the method of
disposal and the owner and location of the disposal facility.  The format of such certification shall
follow the requirements, if any, of governmental agencies having jurisdiction
as if the Port Authority were a private organization and the name of the Port
Authority shall not appear on any certificate or other document as a generator
or owner of such material.


 


(k)           Without
limiting the foregoing and without limiting the generality of the provisions of
Section 17 of this Lease and subject to and in accordance with said Section 17,
the Port Authority and its designees, shall have the right but not the
obligation to enter upon the Premises upon forty-eight (48) hours’ notice to the
Lessee to conduct testing and related activities from existing wells, if any,
to make additional wells and borings and to conduct testing and related
activities therefrom and to perform such activities as shall be necessary to
remediate the Existing Condition, and including but not limited to conducting
pumping operations from said wells.  In
the exercise of the foregoing rights the Port Authority and its designees shall
not unreasonably interfere with the use and occupancy of the Terminal by the
Lessee.


 


(l)            After
any Person performs any remediation on the Premises, such Person, may but shall
not be obligated to, sample and test the soil and/or aquifer of the


 


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Premises or portions thereof
and set forth the results of such samplings and tests in a report.  Any such report and test results shall be
referred to for purposes of this Agreement as a “Remediation Completion
Report”.  Upon delivery of a Remediation
Completion Report to the Lessee and the Port Authority, such Remediation
Completion Report shall (A) supersede and replace the existing Exhibit I or the
applicable portions thereof if such test or tests results and report are of
samples of Analyzed Items taken from the same well or boring or a new well or
boring which is immediately adjacent to such well or boring and shall (B)
supplement the existing Exhibit I or the applicable portions thereof if the
test or tests results and report would not supersede any test or tests results
and reports in the existing Exhibit I as aforesaid, provided, however, that
said samples and testing shall produce a fair and representative sampling of
the Premises, shall be analyzed by a New York State approved independent
laboratory, and that said sampling and testing were performed in accordance
with a methodology approved by the Port Authority.


 


(m)          Without
limiting the generality of the provisions of Section 10 of the Lease, the
Lessee agrees to protect and maintain the wells referred to Exhibit I and
paragraph (k) of this Section and shall repair any damage thereto not caused by
the activities of the Port Authority, or its designee(s), if any, or any prior
occupant of the Terminal.


 


(n)           Without
limiting the generality of any other term or provision of this Lease, all of
the obligations of the Lessee under this Section shall survive the expiration
or earlier termination of the letting of the Premises or any portion thereof.


 


(o)           The
terms and conditions of this Section are intended to allocate the obligations
and responsibilities between the Lessee and the Port Authority, and nothing in
this Section or elsewhere in this Lease shall, or shall be deemed to, limit,
modify waive or otherwise alter the rights, claims and remedies which the Port
Authority or the Lessee may have against third parties at law, equity or
otherwise.


 


(p)           (1)           Notwithstanding any
other term or provision of this Agreement, the Existing Condition shall in no
event include any Hazardous Substance whose presence in, on or under the
Premises was caused by or resulted from the use and occupancy of the Premises
by the Lessee or by any Affiliate of the Lessee, or the performance of any work
by any of them, or the acts or omissions of the Lessee, its officers, agents or
employees, or the acts or omissions of any Affiliate of the Lessee or of any
sublessees or others who occupied the Premises with the permission of the
Lessee or with the permission of an Affiliate of the Lessee or their officers,
agents or employees.


 


(2)           The
Lessee shall be responsible for the remediation and removal of the Existing
Condition and fines and penalties arising out of in whole or in part if the
Terminal is not at any time accessible for remediation, removal or cleanup by
any prior occupant of the Terminal or by the Port Authority or its designees or
others due to any act or omission, interruption, obstruction or hindrance by
the Lessee or any of its agents, contractors or representatives, sublessees or
subusers, including but not limited to,


 


98

















 


any refusal or failure by the
Lessee or any of its agents, contractors or representatives, sublessees or
subusers to grant or allow full and complete access to the Terminal or any
portion of either to any prior occupant of the Terminal, the Port Authority or
its designees.  Neither said access nor
any such work by any prior occupant of the Terminal, the Port Authority or its
designees nor any approval or consent granted to any prior occupant of the
Terminal or any designee of the Port Authority to perform such work shall
result in or entitle the Lessee to any abatement, reduction, diminution or
suspension of any of the rentals or charges under this Lease.


 


(q)           Notwithstanding
any other term or condition of this Agreement, it is hereby understood and agreed
that the Lessee’s obligations under this Agreement shall not be nor be deemed
to be affected in any way whatsoever if the Existing Condition or any portion
thereof, is or will be remediated or removed by the Lessee in whole or in part
in the fulfillment of any of the Lessee’s obligations under this Agreement,
whether due to the fact the Lessee cannot remediate or remove one or more
Hazardous Substances for which it is responsible to remediate or remove without
remediating or removing one or more Analyzed Items for which it is not
responsible for remediating or removing or due to cost or expedience or for any
other reason, and in no event shall the Port Authority have any responsibility
for such remediation or removal, including without limitation, any obligation
to share in the cost of such remediation or removal.


 


(r)            The
Port Authority has advised the Lessee that it is the intention of the Port
Authority with respect to the application of pollution prevention programs,
“best management practices plans” and other voluntary programs adopted and
agreements made by the Port Authority with any governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states and political subdivisions thereof constituting Environmental
Requirements that the Port Authority will treat the Lessee in a similar manner
as similarly situated persons at the Airport.


 


(s)           Upon
the cessation of the letting hereunder or any portion thereof, whether such
cessation be by termination, expiration or otherwise, no level of any Analyzed
Item shall exceed the level of such Analyzed Item as set forth in the Existing
Condition (the amount of the increase, if any, of each and every Analyzed Item
above the Existing Condition being hereinafter collectively called “Analyzed
Item Increases”).  The Lessee covenants
and agrees on or before the cessation of the letting or any portion thereof and
subject to the provisions of Section 33 hereof, to remove and/or remediate all
Analyzed Item Increases down to the Existing Condition.


 


(t)            (1)           Without limiting any
other term or provision hereof, all the obligations of the Lessee under this
Section shall survive the expiration or termination of the letting of the
Premises hereunder, provided, however, the Lessee shall not be responsible for
any Hazardous Substances in, on, under or about the Premises which the Lessee
can prove occurred after the date that the Lessee shall have surrendered the
Premises to the Port Authority and were not due to the acts or omissions of the
Lessee.


 


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(2)           Between
the eighth (8th) and sixth (6th) months immediately preceding the expiration of
the letting hereunder and within three (3) months after the effective date of
the termination thereof, as the case shall be, the Lessee shall at its sole
cost and expense and subject to the terms and provisions of Section 33 hereof
entitled “Other Construction by the Lessee”, sample and test the soil and
groundwater in, on and under the Premises in accordance with such standards,
methods, protocol and procedures as shall be required by the Port Authority in
it sole discretion after consultation with the Lessee in not less than 100
locations as specified by the Port Authority after consultation with the Lessee
(such sampling and testing of the soil and groundwater is hereinafter referred
to as the “Exit Baseline”).  All such
sampling, testing and the preparation of any associated report shall be
performed by a New York State approved independent consultant and laboratory.


 


(3)           It
is hereby understood and agreed that the Exit Baseline and the test results
therefrom may be used by the Lessee to evidence that a Hazardous Substance in,
on or under the Premises occurred after the date that the Lessee shall have surrendered
the Premises to the Port Authority


 


Section 57.            Late Charges


 


If the Lessee should fail to pay any amount required to be paid by the
Lessee under this Agreement when due to the Port Authority, including without
limitation any payment of 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, bill or otherwise) a late
charge with respect to each such unpaid amount for each late charge period
(hereinbelow described) during the entirety of which such amount remains
unpaid, each such late charge not to exceed an amount equal to eight tenths of
one percent of such unpaid amount for each late charge period.  There shall be twenty-four late charge
periods on a calendar year basis; each late charge period shall be for a period
of at least fifteen (15) calendar days except one late charge period each
calendar year may be for a period of less than fifteen (but not less than thirteen)
calendar days.  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.  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 of 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 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.  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 Section 20 hereof entitled “Termination by
the Port Authority” or (ii) any obligations of the Lessee under this Agreement.  In the event that any late charge imposed
pursuant to


 


100

















 


this Section shall exceed a
legal maximum such late charges payable under this Agreement shall be payable
instead at such legal maximum.


 


Section 58.            Future Airport Transportation Facilities
and Operations Use of Portions of the Terminal


 


(a)           The
Lessee understands that the Port Authority is constructing certain ground
transportation facilities at the Airport including, but not limited to, a light
rail passenger distribution system (“AirTrain”).  It is presently contemplated that the AirTrain will generally
include a rail transportation system circulating around the Central terminal
Area of the Airport generally aligned along the roadway frontage of the
passenger terminal buildings and with stations to serve the passenger terminal
buildings in the CTA at various locations. 
At the discretion of the Port Authority, stations may be located to
serve one or more passenger terminal buildings in the CTA, Airport parking
areas, rent-a-car facilities, other areas of the Airport and off Airport
transit systems.  The Port Authority
expects to complete the planning and design for the AirTrain and upon
completion of such planning and design, to implement the construction of the
AirTrain and after the completion of such construction, to maintain and operate
the AirTrain for the accommodation and transportation of persons desiring to
use the same, and their baggage.  The
Port Authority will keep the Lessee advised from time to time of the progress
of the planning, design and construction of the AirTrain, particularly as it
relates to the terminal hereunder.  The
Lessee acknowledges and agrees that the AirTrain is intended to be a benefit and
enhancement to the Airport and to the Lessee’s operations thereon.


 


(b)           (1)           The Lessee understands
that the construction and operation of the AirTrain may require the location on
the terminal of a passenger station (including pedestrian access between it and
the passenger terminal building) and, in addition, requires the use of a
portion or portions of the Terminal for and in connection with the
construction, maintenance or operation of other portions of the AirTrain.  The Lessee agrees that it shall make
available to the Port Authority upon demand such use for or in connection with
the construction, maintenance and operation of the AirTrain for such purposes
as may be required or be appropriate therefor and, where such portion of the
AirTrain exclusively serves the Terminal, the same shall be made available by
the Lessee without abatement of rental or charges hereunder or any payments by
the Port Authority to the Lessee therefor. 
Where such portion of the AirTrain does not exclusively serve the
Premises then the rental hereunder shall be abated in accordance with the
rental abatement provisions of this Lease.


 


(2)           Without
limiting the terms and provisions of paragraph (b)(1) above, the Lessee shall
comply with the provisions of Section 2 hereof entitled “Construction by the
Lessee” with respect to the coordination of the AirTrain with the Construction
Work as set forth in said Section 2.


 


(c)           The
Lessee understands that the Port Authority considers the construction,
operation and maintenance of the AirTrain of the utmost importance to the


 


101

















 


efficient operation of the
Airport and to the fulfillment of the Port Authority’s governmental function to
provide, maintain, develop and operate the Airport; that the efficient use and
operation of the AirTrain will require that the Lessee in the operation and use
of its passenger terminal facilities under this Lease shall utilize and
cooperate in the operation of the AirTrain to the end that the AirTrain shall
be utilized to the fullest extent possible so that its advantages and
efficiencies can be fully realized; and that the Port Authority does not by
this Lease intend to enter into any agreement, understanding or commitment
which will interfere with, limit, restrict, hinder or prevent in any way the
development, construction, maintenance, operation or efficient use of the
AirTrain.


 


(d)           The
Lessee also understands and acknowledges that the cost of planning, design,
construction, maintenance and operation of the AirTrain will be accorded the
same cost recovery treatment as the similar elements of the Air Terminal
Highway is accorded in the General Airport Agreement for calculation of the
flight fees under the General Airport Agreement and the same cost recovery
treatment as the Air Terminal Highway is accorded for the calculation of other
fees and charges under other existing agreements and policies at the Airport,
and under any agreements which may be entered into in the future including
agreements to replace such existing agreement(s) or the General Airport Agreement.


 


(e)           The
Port Authority has also advised the Lessee that it is the intention of the Port
Authority that with respect to the maintenance, operation, use and payment for
the AirTrain all Aircraft Operators at the Airport which are similarly situated
will be treated in a similar manner including the treatment of the cost, if
any, of each in connecting its airport terminal facility to the AirTrain.


 


(f)            Without
limiting any other provisions of this Section the Lessee understands and agrees
that changes and modifications to certain provisions of the Lease including,
but not limited to, Section 45 hereof entitled “Ingress and Egress”, and
Section 68 hereof entitled “Ground Transportation Within the Central Terminal
Area” and Section 46 hereof entitled “Restrictions on Use of Passenger Terminal
Frontage Roadways - Use of Airport Taxi Dispatchers and Roadway Frontage
Management”, may be required or appropriate to conform the provisions of these
Sections to the operation of the AirTrain and the Lessee agrees that upon the
presentation to it of a form of supplemental agreement to this Lease which
includes such modifications it will execute and return the same to the Port
Authority.  The Port Authority and the
Lessee agree that each will consult with the other, from time to time, and will
provide information to the other, from time to time, with respect to the study,
planning, design, construction, maintenance and operation of the AirTrain and
its interconnection with the Lessee’s passenger terminal facilities at the
Premises.


 


Section 59.            Club Rooms


 


In the event the Lessee provides any rooms or space for the special
handling of or the furnishing of special services to any of its passengers,
guests or invitees it shall furnish such rooms or space at its expense and
without cost to the Port


 


102

















 


Authority.  The Lessee agrees that any food, alcoholic
or non-alcoholic beverages and similar items sold or furnished to the Lessee’s
passengers, guests or invitees shall be obtained by the Lessee from a
Restaurant Operator who has been authorized by the Port Authority to operate
establishments for the sale of food, alcoholic and non-alcoholic beverages and
similar items for consumption in passenger terminal facilities at the
Airport.  All monies paid or payable to
a Restaurant Operator for such sales shall be included in the Gross Receipts of
such Restaurant Operator.  In the event
the Lessee wishes to use its own personnel for serving food, alcoholic or
non-alcoholic beverages and similar items it may do so; provided that the food,
alcoholic and non-alcoholic beverages are obtained by the Lessee from a Person
who has been issued a permit by the Port Authority granting such Person
permission to provide such food and beverages and provided that monies paid
therefor, in that event, shall not be included in the Gross Receipts of such
Person.  If the Lessee uses its own
personnel for serving food, alcoholic or non-alcoholic beverages and similar
items, the Lessee will not be obligated to pay a fee to the Port Authority
which would be greater than the fee that would be retained by the Port
Authority if the food, alcoholic or non-alcoholic beverages and similar items
were served by a Restaurant Operator.


 


Section 60.            Lessee’s Service Standards


 


Subject to and without limiting or affecting any other term or
provision of the Lease, the Lessee agrees to provide services at the Terminal
for the benefit of the traveling public in a manner consistent with generally
accepted airline industry standards for airport terminals and will cooperate
with the Port Authority and other airlines serving the traveling public at the
Airport in maintaining these standards through organized airport service
improvement working groups.


 


Section 61.            Storage Tanks


 


The Lessee shall not use any of the underground or above ground storage
tanks installed in the Premises on the Effective Date and its or their
appurtenances, pipes, lines, fixtures and other related equipment (which tanks
and appurtenances, pipes, lines, fixtures and equipment are hereinafter
collectively called the “Existing Tanks” and singularly called an “Existing
Tank”).  In the event that
notwithstanding the foregoing the Lessee shall use any of the Existing Tanks,
then such use shall be subject to all of the following terms and conditions:


 


(a)           Each
Existing Tank used by the Lessee and all underground storage tanks and all
above ground storage tanks installed in the Premises during the term of the
letting hereunder or during the letting or use of the Premises by the Lessee
under any previous agreement, and its or their appurtenances, pipes, lines,
fixtures and other related equipment are hereinafter collectively called the
“Lessee’s Tanks” and singularly called a “Lessee Tank”.  Notwithstanding any other facts or
circumstances the contrary including without limitation any vesting of title to
the Lessee’s Tanks in the City of New York pursuant to any construction or
alteration application or otherwise, the Lessee


 


103

















 


hereby agrees that title and
ownership of the Lessee’s Tanks shall be and remain in the Lessee, that all
Lessee’s Tanks shall be registered by the Lessee in the name of the Lessee as
operator and owner and that the Lessee shall have full and sole responsibility
for all the Lessee’s Tanks, and shall release and relieve the Port Authority
from all costs and responsibility for the Lessee’s Tanks.  The Port Authority has made no
representations or warranties with respect to the Lessee’s Tanks or their
location and shall assume no responsibility for the Lessee’s Tanks.  All Lessee’s Tanks installed by the Lessee
shall be installed pursuant to the terms and conditions of the Lease including
without limitation Section 33 hereof entitled “Other Construction by the
Lessee” and nothing in this Section shall or shall be deemed to be permission
or authorization to install any Lessee’s Tanks.


 


(b)           Without
limiting the generality of any of the provisions of the Lease, the Lessee
agrees that it shall be solely responsible for maintaining, testing and
repairing the Lessee’s Tanks.  The
Lessee shall not perform any servicing, repair or non-routine maintenance to
the Lessee’s Tanks without the prior written approval of the Port
Authority.  In addition, the Lessee, at
its sole cost and expense, shall make all modifications to the Lessee’s Tanks
and take all other actions so that the Lessee’s Tanks shall at all times comply
with all applicable Environmental Requirements.


 


(c)           
(1)          The Lessee shall remove
all the Lessee’s Tanks from the Premises on or before the expiration of the
Lease (unless the Lessee shall have received the prior written approval of the
Port Authority to have abandoned a tank in place and such abandonment continues
to meet all applicable Environmental Requirements) and the Lessee agrees to
dispose of the Lessee’s Tanks off the Airport in accordance with all applicable
Environmental Requirements.


 


(2)            Any removal of the Lessee’s Tanks shall be
performed pursuant to an alteration application prepared by the Lessee and
submitted to the Port Authority for the Port Authority’s approval and in
connection with such removal, the Lessee shall restore the Premises to the same
condition existing prior to the installation of the Lessee’s Tanks, shall perform
such testing of the Lessee’s Tanks and of the soil, sub-soil and ground water
in the vicinity of the Lessee’s Tanks as shall be required by the Port
Authority and shall clean-up and remediate any contamination disclosed by said
testing.  In the event the Lessee does
not remove the Lessee’s Tanks as required by subparagraph (l) above, the Port
Authority may enter upon the Premises and effect the removal and disposal of
the Lessee’s Tanks, restoration of the Premises and such remediation and the
Lessee hereby agrees to pay all costs and expenses of the Port Authority
arising out of such removal, disposal, restoration and remediation.


 


(d)           Without
limiting the generality of any other term or provision of the Lease, the Lessee
shall at its cost and expense comply with all Environmental Requirements
applicable to the Lessee’s Tanks, including without limitation any
modifications or closures required thereby, and any Discharge (as defined in
paragraph (i) hereof) including without limitation testing the Lessee’s Tanks
and registering the Lessee’s Tanks in the name of the Lessee as owner and
operator, submitting all required clean-up plans, bonds and other financial
assurances, performing all required clean-up


 


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and remediation of Discharges
and filing all reports, making all submissions to, providing all information
required by, and complying with all requirements of, all Governmental
Authorities pursuant to all such Environmental Requirements.  Nothing in the foregoing shall be construed
as a submission by the Port Authority to the application to itself of the
Environmental Requirements, provided, however, no immunity or exemption of the
Port Authority from the Environmental Requirements shall excuse the compliance
therewith by the Lessee or shall be grounds for non-compliance therewith by the
Lessee.


 


(e)           (1)           Without limiting the
terms and provisions of Section 2 hereof entitled “Construction by the Lessee”
and Section 13 hereof entitled “Indemnity and Liability Insurance”, the Lessee
hereby assumes all risks arising out of or in connection with the Lessee’s
Tanks and all Discharges whether or not foreseen or unforeseen and shall
indemnify and hold harmless the Port Authority, its Commissioners, officers,
agents and employees from and against (and shall reimburse the Port Authority
for their costs and expenses including without limitation penalties, fines,
liabilities, settlements, damages, attorney and consultant fees, investigation
and laboratory fees, clean-up and remediation costs, court costs and litigation
expenses), all claims and demands, just or unjust, of third Persons (such
claims and demands being hereinafter in this Section referred to as “Claims”
and singularly referred to as a “Claim”) including but not limited to those for
personal injuries (including death), property damages, or environmental
impairment, arising or alleged to arise out of or in any way related to, the
failure of the Lessee to comply with each and every term and provision of the
Lease relating to the Lessee’s Tanks or to any Discharge, or the Lessee’s
Tanks, or any Discharge, or any lawsuit brought or threatened, settlement
reached or any governmental order relating to the Lessee’s Tanks or a
Discharge, or any violation of any Environmental Requirement or demands of any
Governmental Authority based upon or in any way related to the Lessee’s Tanks
or a Discharge, and whether such arise out of the acts or omissions of the
Lessee or of the contractors of the Lessee or of third Persons or out of the
acts of God or the public enemy or otherwise including Claims by the City of
New York against the Port Authority pursuant to the provisions of the Basic
Lease whereby the Port Authority has agreed to indemnify the City against
claims.  It is understood the foregoing
indemnity shall cover all claims, demands, penalties, settlements, damages,
fines, costs and expenses of or imposed by any Governmental Authority under the
aforesaid Environmental Requirements.


 


(2)           If
so directed the Lessee shall at its expense defend any suit based upon any such
Claim (even if such Claim is groundless, false or fraudulent) and in handling
such it shall not without first having 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.


 


(3)           The
terms and conditions of this paragraph (e) are intended to allocate obligations
and responsibilities between the Lessee and the Port Authority


 


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only, and nothing in this
paragraph (e) shall limit, modify or otherwise alter the rights and remedies
which the Port Authority or the Lessee may have against third parties at law,
equity or otherwise.


 


(f)            Without
limiting or affecting the terms and provisions of Section 23 hereof entitled
“Survival of the Obligations of the Lessee”, the Lessee’s obligations under
this Section shall survive the expiration or earlier termination of the Lease.


 


(g)           
In addition to the requirements of Section 6 hereof entitled “Compliance with
Governmental Regulations” and paragraph (d) of this Section, the Port Authority
shall have the right upon notice to the Lessee to direct the Lessee, at the
Lessee’s sole cost and expense, (i) to perform such reasonable testing of the
Lessee’s Tanks as the Port Authority shall direct and to perform such testing
of the soil, subsoil and ground water of the Terminal and of such surrounding
area as the Port Authority shall direct, and (ii) to clean-up and remediate any
Discharge, regardless of whether any Environmental Requirement or Governmental
Authority shall require such testing, clean-up or remediation, which testing,
clean-up and remediation shall be performed pursuant to an alteration
application prepared by the Lessee and submitted to the Port Authority for the
Port Authority’s approval.


 


(h)           
In the Lessee’s use and operation of the Lessee’s Tanks, the Lessee shall not
permit any Hazardous Substance from entering the ground including without
limitation (subject to Section 33 hereof entitled “Other Construction by the
Lessee”) installing appropriate spill and overfill devices and placing an
impervious material, such as asphalt or concrete, over the ground area above or
under, as the case shall be, and in the vicinity of the Lessee’s Tanks.


 


(i)            As
used in this Section, “Discharge” shall mean the presence, pumping, pouring,
venting, emitting, emptying, leakage, deposit, spill, discharge or other
release of Hazardous Substances from the Lessee’s Tanks or in connection with
their use, operation, maintenance, testing or repair.


 


Section 62.            Non-Discrimination


 


(a)           Without
limiting the generality of any of the provisions of this Agreement, the Lessee,
for itself, its successors in interest, and assigns, as a part of the
consideration hereof, does hereby covenant and agree as a covenant running with
the land that (1) no person on the ground of race, creed, color, sex or
national origin shall be excluded from participation in, denied the benefits
of, or be otherwise subjected to discrimination in the use of the Terminal, (2)
that in the construction of any improvements on, over, or under the Terminal
and furnishing of services thereon, no person on the ground of race, creed,
color, sex or national origin shall be excluded from participation in, denied
the benefits of, or otherwise be subject to discrimination, (3) that the Lessee
shall use the Terminal in compliance with all other requirements imposed by or
pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21,
Non-discrimination in Federally-assisted


 


106

















 


programs of the Department of
Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as
said Regulations may be amended, and any other present or future laws, rules,
regulations, orders or directions of the United States of America with respect
thereto which from time to time may be applicable to the Lessee’s operations at
the Airport, whether by reason of agreement between the Port Authority and the
United States Government or otherwise.


 


(b)           
The Lessee shall include the provisions of paragraph (a) of this Section in
every sublease, agreement or concession it may make pursuant to which any
Person or Persons, other than the Lessee, operates any facility at the Airport
providing services to the public and shall also include therein a provision
granting the Port Authority a right to take such action as the United States
may direct to enforce such covenant.


 


(c)           The
Lessee’s noncompliance with the provisions of this Section shall constitute a
material breach of this Agreement.  In
the event of the breach by the Lessee of any of the above nondiscrimination
provisions the Port Authority may take appropriate action to enforce
compliance; or in the event such noncompliance shall continue for a period of
twenty (20) days after receipt of written notice from the Port Authority, the
Port Authority shall have the right to terminate this Agreement and the letting
hereunder with the same force and effect as a termination under Section 20
hereof entitled “Termination by the Port Authority”, or may pursue such other
remedies as may be provided by law; and as to any or all the foregoing, the
Port Authority may take such action as the United States may direct.


 


(d)           The
Lessee shall indemnify and hold harmless the Port Authority from any claims and
demands of third Persons, including the United States of America resulting from
the Lessee’s noncompliance with any of the provisions of this Section and the
Lessee shall reimburse the Port Authority for any loss or expense incurred by
reason of such noncompliance.


 


(e)           Nothing
contained in this Section shall grant or shall be deemed to grant to the Lessee
the right to transfer or assign this Agreement, to make any agreement or
concession of the type mentioned in paragraph (b) hereof, or any right to
perform any construction on the Terminal.


 


Section 63.            Affirmative Action


 


The Lessee assures that it will undertake an affirmative action program
as required by 14 CFR Part 152, Subpart E, to insure that no person shall on
the grounds of race, creed, color, national origin, or sex be excluded from
participating in any employment activities covered in 14 CFR Part 152, Subpart
E.  The Lessee assures that no person
shall be excluded on these grounds from participating in or receiving the
services or benefits of any program or activity covered by this subpart.  The Lessee assures that it will require that
its covered suborganizations provide assurances to the Lessee that they
similarly will undertake affirmative action programs and that they will


 


107

















 


require assurances from their
suborganizations, as required by 14 CFR Part 152, Subpart E, to the same
effect.


 


Section 64.            The Lessee’s Ongoing Affirmative Action,
Equal Opportunity And Local Business Enterprises Commitment


 


I.              The
Lessee’s Ongoing Affirmative Action and Equal Opportunity Commitment


 


(a)           In
addition to and without limiting any other term or provision of this Agreement,
the Lessee shall not discriminate against employees or applicants for
employment because of race, creed, color, national origin, sex, age, disability
or marital status and shall undertake or continue existing programs of affirmative
action to ensure that minority group persons and women are afforded equal
employment opportunity without discrimination in connection with the operation,
repair and maintenance of the Terminal by the Lessee.  Such programs shall include, but not be limited to, recruitment,
employment, job assignment, promotion, upgrading, demotion, transfer, layoff,
termination, rates of pay or other forms of compensation, and selections for
training or retraining, including apprenticeship and on-the-job training.


 


(b)           In
addition to and without limiting the foregoing, and without limiting the
provisions of Section 62 hereof entitled “Non-Discrimination” and Schedule E,
it is hereby agreed that the Lessee in connection with its continuing
operation, maintenance and repair of the Terminal, or any portion thereof, and
in connection with every award or agreement for concessions or consumer
services at the Airport, shall throughout the term of the letting hereunder
commit itself to and use good faith efforts to implement an extensive program
of affirmative action, including specific affirmative action steps to be taken
by the Lessee, to ensure maximum opportunities for employment and contracting
by minorities and women, and by Minority Business Enterprises (“MBE”) and Women-owned
Business Enterprises (“WBE”).  In
meeting the said commitment the Lessee agrees to submit to the Port Authority
for its review and approval its said extensive affirmative action program,
including the specific affirmative action steps to be taken by the Lessee to
meet its aforesaid commitment, within sixty (60) days after the Effective
Date.  The Lessee shall incorporate in
its said affirmative action program such revisions and changes which the Port
Authority initially or from time to time may reasonably require.  The Lessee throughout the term of the Lease
shall document its efforts in implementing the said program, shall keep the
Port Authority fully advised of the Lessee’s progress in implementing the said
affirmative action program and shall supply to the Port Authority such
information, data and documentation with respect thereto as the Port Authority
may from time to time and at any time reasonably request, including but not
limited to annual reports.


 


(c)           Good
faith efforts to include meaningful participation by MBEs and WBEs shall
include at least the following:


 


108

















 


(1)           Dividing
the work to be subcontracted into smaller portions where feasible.


 


(2)           Actively
and affirmatively soliciting bids for subcontracts from MBEs and WBEs,
including circulation of solicitations to minority and female contractor
associations.  The Lessee shall maintain
records detailing the efforts made to provide for meaningful MBE and WBE
participation as called for in paragraph (b) above, including the names and
addresses of all MBEs and WBEs contacted and, if any such MBE or WBE is not
selected as a joint venturer or subcontractor, the reason for such decision.


 


(3)           Making
plans and specifications for prospective work available to MBEs and WBEs in
sufficient time for review.


 


(4)           Utilizing
the list of eligible MBEs and WBEs maintained by the Port Authority or seeking
minorities and women from other sources for the purpose of soliciting bids for
subcontractors.


 


(5)           Encouraging
the formation of joint ventures, partnerships or other similar arrangements
among subcontractors, where appropriate, to insure that the Lessee will meet
its obligations hereunder.


 


(6)           Insuring
that provisions are made to provide progress payments to MBEs and WBEs on a
timely basis, preferably biweekly, and that retainage it paid to MBEs and WBEs
when they have completed their work.


 


(7)           Submitting
quarterly reports to the Port Authority (Office of Business and Job
Opportunity) detailing its compliance with the provisions hereof.


 


(8)           Requiring
each contractor to submit to the Lessee with each payment request evidence that
all MBE and WBE contractors have been paid in accordance with their contract.


 


(d)           The
Lessee’s non-compliance with the provisions of this Section shall constitute a
material breach of this Agreement.  In
the event of the breach by the Lessee of any of the above provisions the Port
Authority may take any appropriate action to enforce compliance; or in the
event such non-compliance shall continue for a period of twenty (20) days after
receipt of written notice from the Port Authority, the Port Authority shall
have the right to terminate this Agreement and the letting hereunder with the
same force and effect as a termination for default by the Lessee in the
performance or observance of any other term or provision of this Agreement, or
may pursue such other remedies as may be provided by law.


 


(e)           In
the implementation of this Section, the Port Authority may consider compliance
by the Lessee with the provisions of any federal, state or local law concerning
affirmative action equal employment opportunity which are at least equal to


 


109

















 


the requirements of this
Section, as effectuating the provisions of this Section.  If the Port Authority determines that by
virtue of such compliance with the provisions of any such federal, state or
local law that the provisions hereof duplicate or conflict with such law the
Port Authority may waive the applicability of the provisions of this Section to
the extent that such duplication or conflict exists.


 


(f)            Nothing
herein provided shall be construed as a limitation upon the application of any
laws which establish different standards of compliance or upon the application
of requirements for the hiring of local or other area residents.


 


(g)           Nothing
in this Section shall grant or be deemed to grant the Lessee the right to make
any agreement or award for concessions or consumer services at the Airport.


 


II.            The
Lessee’s Local Business Enterprise Commitment


 


The Lessee in connection with any construction work on the Terminal, or
any portion thereof, shall throughout the term of the letting hereunder commit
itself to and use good faith efforts to implement an extensive program to
utilize Local Business Enterprises in accordance with and as set forth in
Schedule F.


 


Section 65.            Books and Records


 


(a)           The
Lessee shall maintain, in English and in accordance with generally accepted
accounting principles full and complete records and books of account for at
least seven (7) years (unless such records and books are material to litigation
initiated within that time in which event they shall be maintained until final
determination of the controversy), which records and books shall include
without limitation all agreements and all source documents such as but not
limited to original invoices, invoice listings, timekeeping records, and work
schedules and shall record (i) the date and hour of each take-off or departure
from the Airport of each aircraft operated by it and the date and hour of the
landing by such aircraft next preceding each take-off or departure, (ii) all
matters which the Lessee is required to certify to the Port Authority pursuant
to this Lease, (iii) all transactions of the Lessee at, through, or in anyway
connected with the Airport, and outside the Airport if the order therefor is
received at the Airport, in connection with all activities conducted by the
Lessee or a third Person relating to Subletting Consent Rental, the
Construction Work and the Cost of the Construction Work, In-Flight Meals
(including without limitation all payments by the Lessee to its independent
contractors which furnish In-Flight Meals or any portion thereof), services
provided to Handled Airlines, Accommodated Sublessee Airlines, ground
transportation, subleasing of the Premises or any other activity at the Airport
or outside the Airport if the order therefor is received at the Airport and
which may require pursuant to the terms of this Lease, the Lessee’s flight fee
agreement, any other agreement between the Lessee and the Port Authority or
otherwise the payment by the Lessee to the Port Authority of fees, rentals or
other amounts in connection with the conduct thereof, and (iv) any other matter
concerning the Lessee’s operations at the Airport with respect to which the
Port


 


110

















 


Authority may reasonably need
information to fulfill its obligations or exercise its rights under this Lease
whether or not of the type enumerated above and whether or not an express
obligation to keep books and records with regard thereto is expressly set forth
elsewhere in this Lease, which records and books of account shall be kept at
all times within the Port of New York District and shall separately state and
identify each of the foregoing items, matters, transactions and activities, it
being understood and agreed that nothing in this Section shall grant or shall
be deemed to have granted any rights in the Lessee or any third Person to
conduct any business, privilege or other activity or transaction at the Airport
or off the Airport.


 


(b)           
The Lessee shall cause any Affiliate, if any such Affiliate performs services
similar to those performed by the Lessee, to maintain, in English and in
accordance with accepted accounting practice full and complete records and
books of account for at least seven (7) years (unless such records and books
are material to litigation initiated within that time in which event they shall
be maintained until final determination of the controversy), which records and
books of account shall include without limitation all agreements and all source
documents such as but not limited to original invoices, invoice listings,
timekeeping records, and work schedules and shall record all transactions of
each Affiliate at, through, or in anywise connected with the Airport, which
records and books of account shall be kept at all times within the Port of New
York District and shall separately state and identify each activity performed
at the Airport and off the Airport if the order therefor is received at the
Airport;


 


(c)           The
Lessee shall permit and/or cause to be permitted in ordinary business hours
during the term of the letting under this Lease, for one (1) year thereafter,
and during such further period as is mentioned in the preceding paragraphs (a)
and (b), the examination and audit by the officers, employees and
representatives of the Port Authority of all the records and books of account
of the Lessee (including without limitation all corporate records and books of
account which the Port Authority in its sole discretion believes may be
relevant for the identification, determination or calculation of all fees,
rentals and other amounts paid or payable to the Port Authority, all
agreements, and all source documents) and all the records and books of account
of all Affiliates (including without limitation all corporate records and books
of account which the Port Authority in its sole discretion believes may be
relevant for the identification, determination or calculation of all fees,
rentals and other amounts paid or payable to the Port Authority, all
agreements, and all source documents) (all of the foregoing records and books
described in this paragraph (c) being hereinafter collectively referred to as
the “Books and Records”) within ten (10) days following any request by the Port
Authority from time to time and at any time to examine and audit any Books and
Records;


 


(d)           The
Lessee shall install and use such equipment and devices, including without
limitation computerized record keeping systems, for recording orders taken, or
services rendered, as may be appropriate to the Lessee’s business and necessary
or desirable to keep accurate Books and Records, and without limiting the
generality of the foregoing, for any activity involving cash sales, install and
use cash registers or other electronic cash control equipment that provides for
non-resettable totals and shall permit


 


111

















 


the inspection by the officers,
employees and representatives of the Port Authority of any equipment used by
the Lessee, including but not limited to any of the foregoing equipment.


 


(e)           Without
implying any limitation on the right of the Port Authority to terminate this
Lease, including but not limited to, for breach of any term, condition or
provision of paragraphs (a) through (d) above, the Lessee understands that the
full reporting and disclosure to the Port Authority of all of the information
described in paragraphs (a) through (d) above and provided by the equipment and
devices set forth in paragraphs (a) through (d) above and the Lessee’s
compliance with all the provisions of said paragraphs (a) through (d) are of
the utmost importance to the Port Authority. 
In the event any Books and Records are maintained outside the Port of
New York District or in the event of the failure of the Lessee to comply with
all the provisions of paragraphs (a) through (d) above then, in addition to
all, and without limiting any other, rights and remedies of the Port Authority
under this Lease or otherwise and in addition to all of the Lessee’s other
obligations under this Lease:


 


(i)            the
Port Authority may estimate any amount paid or payable to the Port Authority on
any basis that the Port Authority, in its sole discretion, shall deem
appropriate, such estimation to be final and binding on the Lessee and the
amounts payable to the Port Authority based thereon shall be payable to the
Port Authority when billed; and/or


 


(ii)           if
any Books and Records are maintained outside of the Port of New York District,
then the Port Authority in its sole discretion may (x) require on ten (10)
days’ notice to the Lessee that any such Books and Records be made available to
the Port Authority within the Port of New York District for examination and
audit pursuant to paragraph (c) hereof and/or (y) examine and audit any such
Books and Records pursuant to paragraph (c) hereof at the location(s) they are
maintained and if such Books and Records are maintained within the contiguous
United States the Lessee shall pay to the Port Authority when billed all travel
costs and related expenses, as determined by the Port Authority, for Port
Authority auditors and other representatives, employees and officers in
connection with such examination and audit and if such Books and Records are
maintained outside the contiguous United States the Lessee shall pay to the
Port Authority when billed all costs and expenses of the Port Authority, as
determined by the Port Authority, of such examination and audit, including but
not limited to, salaries, benefits, travel costs and related expenses, overhead
costs, and fees and charges of third party auditors retained by the Port
Authority for the purpose of conducting such audit and examination.


 


(f)            Without
implying any limitation on the rights or remedies of the Port Authority under
this Lease or otherwise including without limitation the right of the Port
Authority to terminate the Lease for breach of any term or provision of this
Section and in addition thereto, in the event any of the Books and Records are
not maintained in English, then the Lessee shall pay to the Port Authority when
billed, all costs and


 


112

















 


expenses of the Port Authority,
as determined by the Port Authority, to translate such Books and Records into
English.


 


(g)           Without
limiting the generality of Section 16 hereof entitled “Additional Rent and
Charges”, the foregoing auditing costs, expenses and amounts of the Port
Authority set forth in paragraphs (e) and (f) above shall be deemed rentals
hereunder payable to the Port Authority with the same force and effect as the
rentals payable to the Port Authority pursuant to Section 4 hereof entitled
“Rental”.


 


Section 66.            Ground Transportation Services


 


(a)           The
Lessee shall make available within the Terminal at reasonable rental rates,
such counter spaces and wall telephone installations at such locations as may
be determined by the Port Authority and the Lessee for use by limousine, bus,
car rental, taxi and other ground transportation operators at the Airport, all
of the foregoing being hereinafter called the “Ground Transportation
Operators”.  The Lessee shall enter into
an agreement only with Ground Transportation Operators designated or approved
by the Port Authority, covering the occupancy of said counter space, which
agreement may provide for the payment of a basic rental (but no other rental,
charge or fee of any kind) to the Lessee for the counter space, provided that
such basic rental shall represent a fair and reasonable rental for the counter
space.  The Port Authority shall have
the right to, in its agreement with any Ground Transportation Operator, impose
obligations on the Ground Transportation Operator with respect to its operation
at the counter space, including but not limited to the dissemination of
information applicable to said service, and may charge such fees payable to the
Port Authority as it may determine.


 


(b)           (1)           In lieu of the
provisions of paragraph (a) of this Section obligating the Lessee to make
available counter spaces and wall telephone installations with respect to
limousine, bus and other Ground Transportation Operators at the Airport (but
not including car rental operators as to which the provisions of paragraph (a)
shall be and continue in full force and effect) the Lessee shall provide to the
Port Authority or its contractor, without charge, such counter space at such
locations as may be specified by the Port Authority within the Terminal as may
reasonably be required for use as consolidated ground transportation
reservation and information counters (hereinafter called the “Consolidated
Counters”) to be operated by the Port Authority or its contractors.


 


(2)           The
Lessee agrees to provide access to and from the public ways outside the
Terminal to the Port Authority, its employees and its contractors and the
ground transportation patrons and other users of the Consolidated Counters; to
permit use of such portions of the public pedestrian circulation areas of the
Terminal as may reasonably be required for the operation of the Consolidated
Counters and the accommodation of the users thereof; and to permit the
installation of such telephone and other communication lines, cables and
conduits on and across the Terminal as may be required for the operation of the
Consolidated Counters.  The Lessee
acknowledges and


 


113

















 


agrees that the Consolidated
Counters shall at all times be a part of the Premises under this Agreement and
subject to all the terms and provisions thereof including, but not limited to
indemnity, the payment of rentals, repair and maintenance (it being understood
that this shall not be deemed to limit the liability of any independent
contractor providing such service).  The
Lessee shall, at its sole cost and expense, supply all utilities necessary for
the operation of the Consolidated Counters including but not limited to heat,
light, ventilation, air conditioning and electricity on a twenty-four (24)
hour, seven (7) day a week basis.  The
Lessee shall not be required to provide telephone service to the Consolidated
Counters hereunder.


 


(3)           The
Port Authority shall have the right at any time, without cause, on one hundred
eighty (180) days’ notice to the Lessee to terminate and discontinue the
operation of the Consolidated Counters and from and after the effective date
stated in said notice the operation of the Consolidated Counters shall
terminate and cease and the provisions of this paragraph (b) shall be null,
void and of no further force and effect and the provisions of paragraph (a) of
this Section and the Lessee’s obligations as set forth therein with respect to
limousine, bus, car rental and other Ground Transportation Operators shall be
deemed reinstated and in full force and effect.


 


Section 67.            Ground Transportation


 


(a)           The
Lessee may arrange for the transportation to and from the Airport of its
employees and their baggage (and such employees and baggage only) either
directly or by contract with a surface carrier or carriers (hereinafter called
the “Employee Surface Carrier(s)”) of its choice, provided, that such Employee
Surface Carrier(s) are at all times Ground Carrier Permittees of the Port Authority
as defined in paragraph (b) hereof and provided, further, that ten percent
(10%) or such lesser percentage as may be set pursuant to paragraph (e) hereof
of the Gross Receipts received from the ground transportation of employees and
their baggage by the Employee Surface Carrier(s) providing such service, or by
the Lessee, including all advertising and any other revenues of any type
arising out of or in connection with said service (excluding only local, state
and federal transportation taxes which are separately stated to and paid by the
passengers and are directly payable to the taxing authority by the Lessee or by
the Employee Surface Carrier(s)) shall be paid to the Port Authority.  No fee shall be paid by the Lessee to the
Port Authority in connection with the ground transportation of employees and
their baggage if the Lessee operates the service itself and if the Lessee makes
no charge to its employees and their baggage therefor.


 


(b)           The
Port Authority shall endeavor to issue permits to at least twelve (12)
qualified surface carriers (herein called the “Ground Carrier Permittees”)
which permits shall grant to said Ground Carrier Permittees the privilege of
providing a service for the transportation to and from the Airport of employees
and their baggage of all Aircraft Operators at the Airport.  Each permit shall provide that the Port
Authority shall have the right at any time to revoke the permit granted to any
Ground Carrier Permittee with or without cause and regardless of whether any
such Ground Carrier Permittee is an Employee Surface Carrier(s) of the Lessee
and regardless of any


 


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agreement between the Lessee
and its Employee Surface Carrier(s). 
Without limiting the foregoing right, if the Ground Carrier Permittee
selected by the Lessee shall at any time fail to pay the Port Authority ten
percent (10%) or such other percentage of its Gross Receipts as established
pursuant to paragraph (e) hereof as required under the permit, the Port Authority
shall have the right in addition to all other rights and remedies, to deny such
Permittee entrance upon the Airport for the purpose of transporting employees
and their baggage as aforesaid to and from the Airport and the Lessee shall no
longer use the same.  In the event that
there should at any time during the term of this Lease be less than twelve (12)
Ground Carrier Permittees in operation at the Airport the Lessee shall have the
right to engage an Employee Surface Carrier(s) of its choice to provide the
service set forth in paragraph (a) hereof, subject, however, to the prior and
continuing approval of the Port Authority, and provided that such Employee
Surface Carrier(s) agrees to become a permittee of the Port Authority and to
pay a percentage of its Gross Receipts to the Port Authority in accordance with
paragraphs (a) and (e) hereof and only for so long as such permittee observes
and complies with the terms of its permit, it being understood that said
Employee Surface Carrier(s) may be restricted to serving the Lessee at the
Airport.  At such time thereafter as
there is in operation at the Airport at least twelve (12) Ground Carrier
Permittees, the permit with the said Employee Surface Carrier(s) may be revoked
by the Port Authority and the Lessee shall thereupon select an Employee Surface
Carrier(s) from the Ground Carrier Permittees of the Port Authority.  Nothing contained hereunder shall be deemed
to preclude the Port Authority from issuing from time to time during the term
of the Lease permits to more than twelve (12) Ground Carrier Permittees.  The Permits with the Ground Carrier
Permittees may contain privileges other than those set forth in this paragraph
(b), including but not limited to the privilege to transport passengers and
baggage of Aircraft Operators.  All
permits shall contain such terms or provisions as the Port Authority may deem
from time to time necessary or desirable.


 


(c)           The
Port Authority hereby states its intention to attempt to incorporate, into all
existing leases and into all new leases with all Scheduled Aircraft Operators
covering passenger terminal facilities within the Central Terminal Area,
provisions having the same effect as the provisions of paragraphs (a) and (b)
of this Section.  The provisions of this
Section shall be applicable as well to Aircraft Operators who may be occupying
space within the Central Terminal Area pursuant to a sublease, subuse or
Handling Agreement with any unit terminal lessee or with the Lessee hereunder
or with any sublessee thereof (the foregoing not to waive the requirement for
Port Authority consent).


 


(d)           The
Lessee may arrange for the transportation to and from the Airport of passengers
and their baggage (and such passengers and baggage only) either directly or by
contract with a surface carrier or carriers (hereinafter called “Passenger
Surface Carrier or Carriers”) of its choice, subject, however, to the prior and
continuing approval of the Port Authority and provided, that such Passenger
Surface Carrier or Carriers agree to become Permittees of the Port Authority
and provided, further, that ten percent (10%) or such lesser percentage as may
be set pursuant to paragraph (e) hereof of the Gross Receipts received from the
ground transportation of passengers and baggage by the Passenger Surface
Carrier or Carriers providing such service or by the Lessee,


 


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including all advertising and any other revenues of any type arising
out of or in connection with said service (excluding only local, state and
federal transportation taxes which are separately stated to and paid by and are
directly payable to the taxing authority by the Lessee or by the Passenger
Surface Carrier or Carriers) shall be paid to the Port Authority.  If the Passenger Surface Carrier designated
by the Lessee shall at any time fail to pay to the Port Authority ten percent
(10%) or such lesser percentage as may be set pursuant to paragraph (e) hereof
of its Gross Receipts as aforesaid when billed therefor by the Port Authority,
the Port Authority shall have the right to deny such carrier entrance upon the
Airport for the purpose of transporting passengers and baggage as aforesaid to
and from the Airport and the Lessee shall no longer use the same.


 


(e)           It
is recognized that the Port Authority has established a five percent (5%) fee
with respect to the service covered by paragraphs (a) and (d) hereof in lieu of
the ten percent (10%) fee therein stated. 
It is hereby specifically understood and agreed that the fact that said
fee is presently five percent (5%) shall not constitute a waiver by the Port
Authority of its right to impose a percentage fee of ten percent (10%) as
provided in paragraphs (a) and (d).  It
is hereby specifically agreed that the Port Authority shall have the right at
any time and from time to time during the term of this Lease to revise the
percentage fee it shall charge the Employee Surface Carrier(s), other
permittees and the Lessee as provided in paragraphs (a) and (d) hereof but in
no event shall said fee be greater than ten percent (10%).  The Port Authority shall notify the Lessee
of any such revision.


 


(f)            The
Lessee may arrange for the transportation to and from the Airport of freight
and other cargo of the Lessee either directly or by contract with the surface
carrier or carriers of its choice.  No
permit or fee shall be required of the Lessee or its contractor for the picking
up from or the delivery to of freight or other cargo from or to the
Lessee.  No fee shall be paid to the
Port Authority by the Lessee or its contractor for the privilege of
transporting freight or cargo of the Lessee on the surface as aforesaid.  If such contractor of the Lessee enters into
a Lease or other agreement with the Port Authority for space and/or privileges
at the Airport, the rent or other compensation payable to the Port Authority
shall not be measured by the amount of freight or other cargo of the Lessee
transported on the surface by such contractor.


 


(g)           The
right of the Lessee to arrange transportation to and from the Airport of its
airline passengers as hereinabove provided shall not be construed as being
applicable to any establishment or operation by the Lessee of facilities
outside the Airport for the handling of airline passengers of the Lessee
arriving at or departing from the Airport.


 


(h)           As
used in this Section, reference to passengers, baggage, freight or other cargo
of the Lessee shall be construed to mean persons, baggage, freight or cargo
transported or to be transported on aircraft of the Lessee.


 


(i)            The
Ground Carrier Permittee of the Lessee’s choice, its Passengers Surface Carrier
or Carriers or any other contractor used by it shall not solicit


 


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business on the public areas of
the Airport and the Lessee shall prohibit any such activity on the Terminal or
on any other area at the Airport occupied by the Lessee.  The use, at any time, either on the Terminal
or elsewhere on the Airport of hand or standard megaphones, loudspeakers or any
electric, electronic or other amplifying devices is hereby expressly prohibited
and any advertising or signs shall be subject to continuing Port Authority
approval.


 


(j)            Effective
as of January 1, 1972, the provisions of this Section superseded the provisions
of Section 4.11 of Title IV of the General Airport Agreement and from and after
said date said provisions of said Section 4.11 of Title IV were no longer of
any force or effect.


 


Section 68.             Ground Transportation Within the Central
Terminal Area


 


(a)           The
Port Authority has established at the Airport a Central Terminal Area generally
as described in the exhibit attached hereto, hereby made a part hereof and
marked “Exhibit S” and hereinafter called “Exhibit S”.  If at any time and from time to time during
the term of the Lease, the Port Authority substantially revises the Central
Terminal Area, it shall thereafter forward to the Lessee a revised exhibit
showing the revised Central Terminal Area which revised exhibit shall replace
Exhibit S and shall become a part of the Lease.


 


(b)           (1)           The Lessee hereby
agrees that it will not directly, indirectly or by arrangement with any
independent third party, operate any surface vehicles for the transportation of
airline passengers to or from the Terminal and the various other passenger
terminal facilities or other locations within the Central Terminal Area.  The prohibition hereinabove set forth in this
paragraph (b) shall be in effect only during such periods as there is in
operation at the Airport a CTA Ground Transportation Service as hereinafter
defined to be provided by an independent third party contractor.  The “CTA Ground Transportation Service”
shall consist of the following: (i)  a
ground transportation service for the transportation of airline passengers and
other persons between the various passenger terminal facilities, including the
Terminal, within the Central Terminal Area including the service of
transporting a group of passengers where the Aircraft Operator must accommodate
the group as a whole (hereinafter called the “CTA Omnibus Service”) and (ii) a
ground transportation service for the transportation of passengers of Aircraft
Operators within the Central Terminal Area, but only for a disabled passenger,
when a passenger must take a direct connection and for whom time is critical,
and in the very limited instance where an Aircraft Operator must accommodate a
particular passenger, the foregoing service being hereinafter called the “CTA
Supplementary Service”.  It is
understood furthermore that, notwithstanding the prohibition hereinabove set
forth in this paragraph (b), the Lessee may directly, indirectly or by
arrangement with an independent third party, operate surface vehicles for the
transportation of its passengers to or from the Terminal and such passenger
terminal facility of the Lessee, if any, located outside the Central Terminal
Area, provided, that the Lessee has the prior and continuing approval of the
Port Authority to operate such passenger terminal facility outside the Central
Terminal Area, that the aforesaid service


 


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shall not serve any passenger
terminal facility or location within the Central Terminal Area other than the
Terminal and that if the Lessee utilizes a third party to provide the service,
said third party shall be subject to the prior and continuing approval of the
Port Authority, shall agree to become a permittee of the Port Authority and
shall pay the percentage of its Gross Receipts to the Port Authority with
respect to said service as specified in said permit and shall comply with all
the terms and conditions of its permit.


 


(2)           Nothing
contained in this paragraph (b) or paragraph (c) hereof shall impose or be
construed as imposing an obligation on the Port Authority to operate or cause
to be operated the CTA Ground Transportation Service for the transportation of
passengers and other persons between the various passenger terminal facilities,
including the Terminal, within the Central Terminal Area.


 


(c)           (1)           (i)            It is hereby agreed that it is in the best
interests of the Port Authority and all Participants as hereinafter defined
that the CTA Omnibus Service be a good, proper and efficient service, able to
adequately, timely and properly handle the ground transportation needs of
airline passengers and other persons between the various passenger terminal
facilities including the Terminal within the Central Terminal Area.  The parties recognize furthermore that the
CTA Supplementary Service should be a service that would transport those
persons authorized to be carried thereon in an adequate, proper and timely
manner so as to meet their flight connections.


 


(ii)           The
Port Authority agrees that it shall meet and consult from time to time with the
Participants with respect to the procedures, schedules, fares, prices and
operations of the CTA Omnibus Service and shall, except in case of emergency,
give the Participants prior written notice of any substantive changes with
respect thereto.  Notwithstanding the
foregoing, it is hereby understood and agreed that the procedures, schedules,
fares, prices, operations and other matters affecting the CTA Omnibus Service
shall be determined by the Port Authority.


 


(iii)          The
Port Authority agrees that it shall meet and consult from time to time with the
Participants with respect to the procedures, schedules, fares, prices and
operations of the CTA Supplementary Service. 
Before adopting any initial procedures or schedules covering the
operation of the CTA Supplementary Service and before putting into effect any
modifications to any procedures or schedules then in effect with respect to the
CTA Supplementary Service, except in case of emergency, the Port Authority
shall submit the initial or the changed procedures and schedules (hereinafter
called the “Submissions”) to the Participants for their approval.  If Participants representing more than fifty
percent (50%) of the effective published passenger flight schedules to and from
the Airport of all Participants for the calendar year prior to the year in
which the Submissions are made to the Participants for their approval, approve
the same, the Submissions shall be deemed to be approved for all purposes
hereunder and said approval shall be deemed binding as well upon all other
Aircraft Operators who may use or pay for the CTA Supplementary Service,
notwithstanding the fact that said Submissions had not been submitted to them
for their approval.  Notwithstanding
anything herein provided and without limiting the provisions of


 


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paragraph (b) hereof, it is
hereby understood and agreed that the Port Authority shall have no obligation
hereunder to itself operate the CTA Ground Transportation Service nor any
obligation to operate said service through an independent contractor unless and
until the Submissions with respect to the CTA Supplementary Service submitted
as aforesaid to the Participants have been approved by the Participants in
accordance with the foregoing provisions. 
The failure of any Participant to disapprove the Submissions within
twenty (20) days after submission thereof to it for approval shall constitute
such Participant’s approval hereunder to said Submissions.


 


(iv)          It
is hereby understood and agreed that the amount to be charged for the CTA
Supplementary Service shall consist of an Initial Price and, if the Port
Authority so elects from time to time during the term of the Lease, an Excess
Price.  The Initial Price shall be based
upon the cost of the CTA Supplementary Service.  The Lessee shall pay to the Port Authority as and representing
the Initial Price its pro rata share of the cost to the Port Authority of
providing the CTA Supplementary Service. 
The Lessee’s pro rata share of the cost to the Port Authority of
providing the CTA Supplementary Service shall be that proportion of said cost
as the number of passengers of the Lessee who actually used the CTA
Supplementary Service bears to the total number of passengers using the CTA
Supplementary Service.  Except as
provided in subparagraph (c)(1)(v)(D) hereof, there will be no charge to the
Lessee of either an Initial Price or an Excess Price if the Lessee does not
have any passengers using the CTA Supplementary Service.


 


(v)           
(A)         The Initial Price payable
to the Port Authority pursuant to subparagraph (iv) hereof is for each calendar
year, but in the event the term of the Lease expires or the provisions covering
the CTA Supplementary Service are terminated on a day other than the last day
of a calendar year, then in any such event the Initial Price payable to the
Port Authority pursuant to subparagraph (iv) hereof shall, for the year during
which such event occurs, be for such portion of said year during which the Port
Authority provides the CTA Supplementary Service.  In determining the Initial Price, the cost of the CTA
Supplementary Service shall be computed, determined and ascertained for each
calendar year (or portion thereof upon the occurrence of any of the events
mentioned in the first sentence hereof) of the term of this Lease.


 


(B)           Notwithstanding
the foregoing and for current monthly or other periodical billing purposes as
may from time to time be selected by the Port Authority, the Port Authority
shall establish interim billing rates to cover the Initial Price for the CTA
Supplementary Service.  Such billing
rates shall be based on determinations by the Port Authority of its estimate of
the cost of the CTA Supplementary Service for the calendar year and the number
of passengers to be using the CTA Supplementary Service for said calendar
year.  Such determinations shall be
based upon the prior calendar year’s experience, if any, and upon such other
reasonable basis as the Port Authority may determine.  The Port Authority may prospectively revise its billing rates
during any calendar year.  On the 20th
day of each calendar month the Lessee shall pay to the Port Authority the
amount due as the Initial Price for the preceding calendar month, which shall
be determined by multiplying the interim billing


 


119

















 


rate per passenger for the
Initial Price established by the Port Authority as aforesaid by the number of
Lessee’s passengers carried on the CTA Supplementary Service for the previous
calendar month.


 


(C)           As
soon as practicable after the expiration of each calendar year, the Port
Authority shall determine the cost of the CTA Supplementary Service and the
Initial Price payable therefore. 
Corrected billings based upon such determination shall thereupon be
rendered by the Port Authority and if any monies are due to the Port Authority
they shall be promptly paid by the Lessee and if any monies are due to the
Lessee they shall be promptly credited to it.


 


(D)          In
the event and only in the event that the CTA Supplementary Service for all or
any portion of a calendar year has been provided by the Port Authority but
there has been no use thereof by any of the Participants, then the Initial
Price and the Excess Price shall be payable by all Participants and each
Participant’s share shall be based on the number of passengers on its outbound
and inbound aircraft at the Airport compared to the total number of passengers
on all inbound and outbound aircraft using the Airport of all
Participants.  The Port Authority agrees
that, if as of the commencement of any calendar year there appears to be no use
by the Participants of the CTA Supplementary Service, it will use all
reasonable efforts to limit its payments to the contractor for the CTA
Supplementary Service for such period where there appears to be no use.


 


(vi)          (A)          The Port Authority shall
have full discretion in awarding a contract for the CTA Ground Transportation
Service and may award the same to a contractor who has not proposed the lowest
price for the CTA Supplementary Service or the CTA Omnibus Service.  As stated in subparagraph (1)(iv) hereof the
Port Authority shall have the right to charge the Lessee, in addition to the
Initial Price for the CTA Supplementary Service, an additional amount herein
called the “Excess Price”, which amount shall be applied to offset any deficit
in the CTA Omnibus Service.


 


(B)           The
amount representing the Excess Price shall be an amount payable only by the
Lessee if it uses the CTA Supplementary Service and shall be an amount fixed
for each passenger using the CTA Supplementary Service.  The Port Authority shall advise the
Participants prior to the beginning of each calendar year of the amount per passenger
which shall constitute the Excess Price for said calendar year.  On the 20th day of each calendar month
during the term of this Lease and on the 20th day of the calendar month
immediately following the end of the term of this Lease, the Lessee shall pay
to the Port Authority the amount due as the Excess Price for the preceding
calendar month, which shall be determined by multiplying the amount per
passenger for the Excess Price established by the Port Authority as aforesaid
by the number of Lessee’s passengers carried on the CTA Supplementary Service
for the previous calendar month.  As
soon as practicable after the expiration of each calendar year, the Port
Authority shall determine the cost of the CTA Omnibus Service for said calendar
year.  If there is no deficit or if the
deficit is less than the amount received by the Port Authority from users of
the CTA Omnibus Service, then the total amount of the Excess Price if there is
no deficit or the amount of the


 


120

















 


Excess Price which is over and
above any deficit on the CTA Omnibus Service shall be refunded or credited to
the Participants based on the portion of each Participant’s payments of the
Excess Price for said calendar year as compared to the total amount received as
the Excess Price from all Participants. 
In determining whether or not there is a deficit or in determining the
amount of the deficit, revenues from the CTA Omnibus Service shall be deemed to
be 87.5% of the cost of the CTA Omnibus Service whether or not the revenues
actually received add up to 87.5%, but if said revenues exceed 87.5% of the
cost, the actual amount of revenues received shall be used.


 


(vii)         The
Port Authority shall determine for each calendar year (or portion thereof, where
applicable) the cost to the Port Authority of providing the CTA Omnibus Service
and the cost to the Port Authority of providing the CTA Supplementary
Service.  Each such cost shall be
determined in accordance with the Port Authority’s normal accounting practice
and shall consist of those of the following items, which are applicable to each
such service:


 


(A)          All
payments made by the Port Authority to the independent contractor for providing
the CTA Supplementary Service or the CTA Omnibus Service, as the case may be
(it being understood that the Port Authority shall not impose any percentage
charge or fee on the contractor for such services);


 


(B)           On-the-job
payroll costs of Port Authority employees working in any aspect of the CTA
Supplementary Service or the CTA Omnibus Service, as the case may be, including
but not limited to contributions to any retirement system or the cost of
participation in any pension plans or the like, social security, old age,
survivors, disability and employment insurance and other insurance costs, sick
leave pay, holiday, vacation, authorized absence and severance pay, other
employee fringe benefits and any other payments made or costs incurred whether
pursuant to law or by Port Authority policy to or with respect to said employees;


 


(C)           The
cost (including rental charges) to the Port Authority of providing space,
equipment, materials, facilities or services to or in connection with the CTA
Omnibus Service or the CTA Supplementary Service, as the case may be;


 


(D)          Payments
of premiums (or to the extent of self-insurance an amount equivalent to what
the premiums would have been) for insurance with respect to the CTA Omnibus
Service or the CTA Supplementary Service, as the case may be, including without
limitation thereto, fire and extended coverage, workmen’s compensation and
commercial general liability;


 


(E)           Other
direct costs as charged under the Port Authority’s normal accounting practice;


 


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(F)           With
respect to the CTA Omnibus Service, ten percent (10%) of the amounts paid to
the contractor providing said service under item (A) hereof and with respect to
the CTA Supplementary Service, twenty percent (20%) of the amount paid to the
contractor providing said service under item (A) hereof.


 


(viii)        In
the event that any specific cost incurred or any specific amount expended for
any of the items hereinabove set forth covers both the CTA Omnibus Service and
the CTA Supplementary Service, then the Port Authority shall divide and allocate
any such cost or amount as between the CTA Omnibus Service and the CTA
Supplementary Service in accordance with its normal accounting principles.


 


(2)           (i)            If at any time during
the term of the Lease the Port Authority receives a written notice from at
least two Participants (as hereinafter defined) representing more than thirty
percent (30%) of the effective published passenger flight schedules to and from
the Airport of all Participants for the calendar year prior to the year during
which the notice was given, which notice shall be either (x) to the effect that
the service being provided by the contractor furnishing the CTA Ground
Transportation Service does not satisfy the standards set forth in item (i) of
subparagraph (1) hereof and specifying whether it is the CTA Omnibus Service or
the CTA Supplementary Service, or both, which is at fault, and further
specifying the nature and extent of the failure or (y) to the effect that the
Participants serving the notice are dissatisfied for any reason with the
service, the Port Authority shall endeavor in the case of item (x) of this
subparagraph (2)(i) to rectify the conditions complained of either by the
existing contractor doing so or by engaging a new contractor to provide the CTA
Ground Transportation Service or by a combination of both.


 


(ii)           If
the Port Authority receives, by a date no earlier than one hundred twenty (120)
days and no later than one hundred eighty (180) days after its receipt of
either notice covered by subparagraph (c)(2)(i) hereof, a written notice from
at least two Participants representing more than fifty percent (50%) of the
effective published passenger flight schedules to and from the Airport of all
Participants for the year prior to the year during which the notice is given, which
notice is to the effect that the Participants sending the notice continue to be
dissatisfied with the CTA Ground Transportation Service whether provided by the
old contractor, or if said contractor has been replaced, by the new contractor,
then the Port Authority agrees that, effective no later than sixty (60) days
after its receipt of said notice (said date to be established by written notice
to the Participants) the provisions of this Section covering the CTA Ground
Transportation Service shall be terminated and shall no longer be in effect and
from and after said date the Lessee shall have the right directly or by
arrangement with an independent third party to operate surface vehicles for the
transportation of airline passengers to and from the Terminal and the various
other passenger terminal facilities or other locations within the Central
Terminal Area, provided, however, that the same shall be used
exclusively for the transportation of disabled passengers, passengers who must
make a direct connection and where time is critical, in the very limited
instances where an airline must accommodate particular passengers, and for the
transportation of passengers traveling as a group where an airline must
accommodate the group as a whole,


 


122

















 


it being understood that the
foregoing limitation on the right of the Lessee shall be in effect only during
such periods as there is in operation at the Airport a CTA Omnibus Service as
defined in paragraph (b) hereof (the Port Authority having no obligation so to
do), excluding the transportation of passengers traveling as a group, and
provided, however, that if the Lessee utilizes a third party to provide said
service, that said third party shall be subject to the prior and continuing
approval of the Port Authority, shall agree to become a permittee of the Port
Authority and shall pay the percentage of its Gross Receipts to the Port
Authority with respect to its service as specified in said permit and shall
comply with all the terms and conditions of its permit.


 


(d)           (1)           The Port Authority
hereby states its intention to attempt to incorporate into all new leases and
into all existing leases which may not already include the same with all
Persons covering passenger terminal facilities within the Central Terminal Area
provisions having the same effect as the provisions of this Section.  The term “Participants” shall mean all
Persons (including for the purposes hereof, the Lessee) who have executed
leases with the Port Authority covering passenger terminal facilities within
the Central Terminal Area and containing provisions having the same effect as
the provisions of this Section


 


(2)           All
Aircraft Operators who may be occupying space within the Central Terminal Area
pursuant to a sublease, subuse or Handling Agreement with any Participant
(including the Lessee hereunder) shall be obligated to comply with all
obligations of this Section which are applicable to the Participants, but said
Aircraft Operators shall not be or be deemed to be Participants within the
meaning of subparagraph (1) of this paragraph (d), but their activities,
operations and payments hereunder shall be deemed to be those of the
Participants whose space they are using.


 


(e)           The
agreement by the Lessee under paragraph (b) hereof as well as the agreement by
the Lessee under paragraph (c)(2) hereof, in the event the provisions covering
the CTA Ground Transportation Service are terminated and are no longer in
effect, are of the essence of this Section and the Lessee agrees that the Port
Authority shall be entitled to a decree against the Lessee requiring the
specific performance thereof in any court of equity having jurisdiction.  The aforesaid remedy shall not constitute
the exclusive or sole remedy which may be available to the Port Authority
hereunder in the event the Lessee breaches its agreement.


 


Section 69.             Helicopter Operations


 


The Lessee hereby acknowledges that the Lease does not grant to it any
right and the Lessee does not have any right to use or permit the use of any
portion of the Terminal for the landing or taking off of helicopters, rotary
wing, tilt rotor or other similar aircraft. 
In the event that the Port Authority determines that approval for such
use will be given at any time hereafter, the same shall be granted only in
accordance with such terms and conditions, including but not limited to fees,
charges and rights of user, as


 


123

















 


the Port Authority may set
forth in a supplement to the Lease, which is duly executed by the Lessee and
the Port Authority.


 


Section 70.             Itinerant Aircraft


 


(a)           The
Port Authority hereby grants to the Lessee the privilege of permitting the
occasional use of the Premises by air taxi, corporate and private aircraft
(sometimes hereinafter called the “Itinerant Aircraft”) for the sole purpose of
discharging or picking up passengers, business guests and other invitees of the
Lessee.  All operations of such
Itinerant Aircraft shall be in compliance with all the terms and provisions of
this Lease and with the Rules and Regulations of the Port Authority.  The Lessee shall be completely responsible
for all acts and omissions of said Itinerant Aircraft as if said acts and
omissions were the acts or omissions of the Lessee.


 


(b)           The
Port Authority shall have the right to cancel the privilege granted to the
Lessee as set forth in paragraph (a) hereof in whole or in part or with respect
to any particular Itinerant Aircraft at any time and from time to time and
without cause upon thirty (30) days’ written notice to the Lessee, and upon the
effective date of such notice the Lessee shall no longer have the right to
permit all or any specific Itinerant Aircraft as specified in the notice to use
the Terminal as hereinabove provided, but the same shall not affect the Lease
or any of the terms, rentals, fees, provisions or agreements hereof, all of
which shall continue in full force and effect.


 


Section 71.             Observation Deck


 


It is hereby agreed and understood that the Lessee is prohibited from
providing or operating, either by itself or through a third Person, an
observation deck on the Terminal.


 


Section 72.             In-Flight Meals


 


(a)           In
the event Section 8.04 of Title VIII of the General Airport Agreement, shall
expire or be canceled or deleted or for any other reason shall be of no further
force or effect then the following paragraphs (1), (2) and (3) shall be deemed
to apply hereunder and be a part hereof:


 


(1)           If
the Lessee desires to prepare, for its exclusive use, In-Flight Meals for
consumption by passengers and crew on board aircraft operated by the Lessee and
to deliver such In-Flight Meals to such aircraft it shall have the right to do
so, individually or through a contractor of its own choice (which contractor
shall not be another Person engaged in the business of transportation by
aircraft).  If the Lessee does so
directly, it shall do so only on space located outside the Central Terminal
Area. The foregoing, however, shall create no obligation on the part of the
Port Authority to provide such space and shall in no way be deemed a commitment
by the Port Authority that any such space shall be available.  If the Lessee chooses to use an independent
contractor, such contractor shall be a regular “In-Flight Meal Operator” by
which is meant an


 


124

















 


operator authorized by the Port
Authority to provide In-Flight Meals to Aircraft Operators at the Airport
unless, in the opinion of the Lessee, all regular In-Flight Meal Operators are
unsatisfactory to the Lessee, in which case the Lessee may employ any other
contractor (other than another Person engaged in the business of transportation
by aircraft), satisfactory to the Port Authority, who will accept a permit from
the Port Authority on the same terms and conditions including the same rates,
fees or charges as imposed upon and required of the Port Authority’s In-Flight
Meal Operators.


 


(2)           The
Lessee shall have the further right, either directly or through an independent
contractor of its choice, satisfactory to the Port Authority, or by
arrangements, jointly with one or more other users at the Airport, to employ a
contractor, satisfactory to the Port Authority, to prepare outside the Airport
and to deliver at the Airport to aircraft operated by the Lessee, In-Flight
Meals for consumption by passengers and crew on board such aircraft, provided,
however, that if the Lessee employs a contractor either alone, or, by
arrangement, jointly with one or more other users at the Airport for the
preparation, outside the Airport, of In-Flight Meals, then the Lessee shall
cause such contractor to pay to the Port Authority the rate or rates which
would be payable to the Port Authority by a regular Port Authority In-Flight
Meal Operator for the off-Airport preparation or delivery, or both, of such
In-Flight Meals to aircraft for consumption by passengers and crews on board
such aircraft.


 


(3)           (i)            The Lessee has advised
that it may use more than one independent contractor to furnish its In-Flight
Meals at the Airport but may not wish to have all of said contractors become
permittees of the Port Authority under permits which require, as aforesaid, the
permittees to pay fees at the rates imposed on the Port Authority’s In-Flight
Meal Operators upon Gross Receipts based on amounts the Lessee pays said
contractors.


 


(ii)           Should
the Lessee elect not to have all its independent contractors be Port Authority
permittees as aforesaid, it shall serve a written notice on the Port Authority
to such effect which notice shall state that it elects the method of additional
payment as hereinafter set forth and thereupon the Port Authority shall consent
thereto provided that, in addition to all other amounts payable to the Port
Authority under subparagraphs (1) and (2) above, the Lessee shall pay and the
Lessee hereby agrees to pay to the Port Authority an amount determined by
applying the rates referred to in subparagraph (3)(i) above to the amounts
payable by the Lessee to said independent contractors for its In-Flight Meals
or any part thereof delivered to the Lessee’s aircraft at the Airport (whether
such delivery be by said independent contractor, the Lessee or another).  The foregoing payments by the Lessee shall
be made monthly on the twentieth (20th) day of the month commencing with the first
(1st) month immediately following the Lessee’s notice and continuing each month
thereafter up to and including the twentieth (20th) day of the month following
the Expiration Date.  The Lessee at
anytime on at least thirty (30) days’ prior written notice to the Port
Authority may change from its selection above and the Lessee may at any time
advise the Port Authority that this subparagraph (3) no longer applies to it
based upon its representation, that it then


 


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shall make, that all payments
made by it for In-Flight Meals shall be made to its contractors who are
permittees of the Port Authority as In-Flight Meal Operators.


 


(iii)          It
is hereby expressly recognized that the procedures allowed under this subparagraph
(3) are not included within the contemplation of the provisions of
subparagraphs 3(1) and (2) above and that the inclusion of the same within this
paragraph (a)(3) shall not constitute or be deemed to constitute any concession
or agreement by the Port Authority that said procedures are not in violation of
subparagraphs 3(i) and (ii) hereof.


 


(b)           (1)           The Lessee acknowledges
and agrees, with respect to any In-Flight Meals prepared and delivered on the
Airport pursuant to Section 8.04 of Title VIII of the General Airport
Agreement, that it may use more than one independent contractor to furnish its
In-Flight Meals at the Airport but may not wish to have all of said contractors
become permittees of the Port Authority under permits which require the permittees
to pay fees at the rates imposed on the Port Authority’s In-Flight Meal
Operators upon Gross Receipts based on amounts the Lessee pays said
contractors, nor shall the same limit or be deemed to limit the provisions of
said Section 8.04.


 


(2)           Should
the Lessee elect not to have all its independent contractors be Port Authority
permittees as aforesaid, it shall serve a written notice on the Port Authority
to such effect which notice shall state that it elects the method of additional
payment as hereinafter set forth and thereupon the Port Authority shall consent
thereto provided that, in addition to all other amounts payable to the Port
Authority, the Lessee shall pay and the Lessee hereby agrees to pay to the Port
Authority an amount determined by applying the rates referred to in
subparagraph (1) above to the amounts payable by the Lessee to said independent
contractors for its In-Flight Meals or any part thereof delivered to the
Lessee’s aircraft at the Airport (whether such delivery be by said independent
contractor, the Lessee or another).  The
foregoing payments by the Lessee shall be made monthly on the twentieth (20th)
day of the month commencing with the first month immediately following the
Lessee’s notice and continuing each month thereafter up to and including the
twentieth (20th) day of the month following the expiration date of the term of
the letting hereunder.  The Lessee at
any time on at least thirty (30) days’ prior written notice to the Port Authority
may change from its selection above and the Lessee may at any time advise the
Port Authority that this paragraph (b) no longer applies to it based upon its
representation, that it then shall make, that all payments made by it for
In-Flight Meals shall be made to its contractors who are permittees of the Port
Authority as In-Flight Meal Operators.


 


(3)           It
is hereby expressly recognized that the procedures allowed under this paragraph
(b) are not included within the contemplation of the provisions of Section 8.04
of Title VIII of the General Airport Agreement and that the inclusion of the
same within this paragraph (b) shall not constitute or be deemed to constitute
any concession or agreement by the Port Authority that said procedures are not
in violation of said Section 8.04 of Title VIII of the General Airport
Agreement, nor shall the same limit or be deemed to limit the provisions of
said Section 8.04.


 


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Section 73.             Consumer Services


 


(a)           The
Lessee shall use its best efforts to develop and operate at the Premises a
premier world-class retail program that will support and advance the role of
the Premises in providing a convenient and comfortable arrival to and departure
from the Airport, consistent with the image and status of New York City as a
foremost domestic gateway and America’s foremost international gateway.  The Lessee’s retail program shall embody the
Lessee’s full commitment to quality, value and customer service, evidence
operations in accordance with the best industry practices, evidence compliance
with the Port Authority’s maximum standards with regard to service, health,
sanitation and safety, and evidence Lessee’s full commitment to the maximum
financial return to the Lessee and the Port Authority.  A “premier world-class” retail program is
one that consistently scores within the top ten percent (10%) of
industry-recognized surveys, including without limitation the International
Airline Transport Association (IATA) Airport Monitor and Port
Authority-sponsored surveys, which contain evaluations or ratings of passenger
terminal retail programs, or specific components thereof, of the same type or
class.


 


(b)           (1)           The Lessee acknowledges
that various portions of the Premises will be utilized for consumer services
and said portions which receive the concurrence of the Lessee and the Port
Authority, as hereinafter provided, are herein referred to as the “Concession
Areas”.  Without limiting the provisions
of Section 64 hereof entitled “The Lessee’s Ongoing Affirmative Action, Equal Opportunity
and Local Business Enterprises Commitment”, the Lessee shall develop and submit
to the Port Authority within ninety (90) days of the Effective Date for its
approval a comprehensive plan for consumer services, setting forth, inter alia: (1) the types of concessions
to be placed there and the number of each type and size, designated location,
and configuration of each concession, as well as the overall plan of the
portions of the Premises designated for retail operations; (2) the minimum
rentals required for each type of concession; (3) the structure and level of
any common area maintenance fees, marketing fees, delivery fees, and utility
recoveries (to the extent permitted) to be charged to the retail sublessees;
(4) the Lessee’s plans to provide retail opportunities for Minority Business
Enterprises and Women-owned Business Enterprises (as defined in Schedule E
hereto); (5) the Lessee’s quality and service standards and required hours of
operation; (6) the Lessee’s specific plans to monitor and enforce its “Street
Pricing” policy (defined in paragraph (f)(1) of this Section), quality and
service standards and required hours of operation; (7) any other basic business
terms including, but not limited to, any mandatory investment and refurbishing
requirements; (8) a customer service program that incorporates the mission and
vision of the Port Authority’s Aviation Department as set forth in the Airport
Standards Manual provided to the Lessee; and (9) such other information as the
Port Authority may deem appropriate to its review and determination if it will
approve the proposed plan.  The types of
concessions to be placed in the Concession Areas shall include those set forth
in Sections 74 through 79 hereof, and the Lessee agrees that it will at all
times throughout the term of the letting hereunder keep said comprehensive plan
updated and that said updated plan shall be submitted to and be subject to the
continuing


 


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approval of the Port Authority.
The Port Authority shall furnish to the Lessee guidelines including those set
forth in the Airport Standards Manual to be utilized by the Lessee with respect
to all matters affecting consumer services in the Concession Areas including
the aforesaid Lessee’s comprehensive plan. The Lessee agrees to meet and
consult with the Port Authority, and provide representatives to meet and
consult with the Port Authority and representatives of other airlines operating
at the Airport, when requested to do so in order to discuss the Lessee’s
performance in meeting the standards required by paragraph (a) of this Section
and its implementation of the Port Authority guidelines on matters affecting
consumer services in the Concession Areas.


 


(2)           The
comprehensive plan shall be subject to the approval of the Port Authority, as
provided in this Section.  The Lessee
shall submit to the Port Authority for its written approval at annual
intervals, on each anniversary of the Effective Date, during the term of the
letting hereunder (or more frequently if desired by the Lessee or if reasonably
requested by the Port Authority) a revised comprehensive consumer services
plan, which shall contain the items of information enumerated in subparagraph
(1) above.  The Port Authority shall,
after its receipt of a proposed revised comprehensive plan, advise the Lessee
in writing of the Port Authority’s approval, conditional approval or
disapproval.  In the event of
disapproval or conditional approval, the reasons therefor shall be stated, and
the Lessee may thereafter submit for Port Authority approval an appropriately
modified proposed revised comprehensive plan. 
Unless and until a revised comprehensive plan shall have been approved
by the Port Authority in the foregoing manner, the comprehensive plan
previously approved and then in effect shall continue in effect.


 


(c)           After
approval by the Port Authority of the Lessee’s comprehensive plan for consumer
services the Lessee shall procure operators and agreements for such
services.   As hereinafter provided the
Lessee will be entering into a direct contract with each new operator but said
operator must also enter into an appropriate agreement with the Port
Authority.  The Lessee shall not
finalize negotiations with any operator until it has received notification from
the Port Authority that said arrangement is acceptable to the Port Authority
and any agreement with any proposed operator the Lessee executes shall not be
effective until said operator has entered into the appropriate contractual
agreement with the Port Authority, in form and substance satisfactory to the
Port Authority in its sole discretion. 
The Port Authority’s approval of a comprehensive plan, or modifications
thereto, shall in no way diminish the applicability of this subparagraph (1).  The effectiveness of the Lessee’s agreement
with said proposed operator shall be subject to the Port Authority’s prior
written consent, as contained in the aforesaid appropriate contractual
agreement, and the Lessee’s agreement shall state the same. The foregoing
procedure will be followed throughout the term of the letting hereunder.  It is expressly understood and agreed that
the provisions of this Section shall not limit or be deemed to limit the
provisions of Section 64 hereof and the Lessee’s on-going affirmative action
commitment with respect to the consumer services awards and agreements provided
for herein.


 


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(d)           (1)            The Port Authority
hereby reserves exclusively to itself and its designees the right on the
Premises to implement, conduct, control and receive any rents, fees or profits
with respect to any of the following uses, operations or installations
(collectively, the “Reserved Uses”):


 


(i)            
advertising, provided that the Lessee shall retain the right to control the
placement of the particular advertising within the Premises and the right to
reject any proposed advertising at the Premises,


 


(ii)           pay
telephones, pre-paid phone cards, facsimile transmission machines and other
public communications services,  including
without limitation, all voice and data communications services and facilitates,
whether wired or wireless and whether within licensed or unlicensed frequency
allocations, and also including all Port Authority-owned or operated information
and communications technology infrastructure for common Airport use, provided
that the Lessee shall retain the right to control the placement of telephones,
phone banks, phone kiosks, facsimile transmission machines and other public
communications services (e.g., internet kiosks) within the Premises, and the
right to deny, upon reasonable grounds, the placement of any particular pay
phone facility, facsimile transmission machine or internet kiosks.


 


(iii)          vending
machines dispensing anything including, but not limited to, catalog and
electronic sales (except in non-public areas of the Premises for products then
permitted to be sold on the Premises under agreements or subleases approved by
the Port Authority as required under this Lease), provided that the Lessee
shall retain the right to control the placement of vending machines within the
Premises and the right to reject any vending machine at the Premises,


 


(iv)          
ground transportation (including vehicle rentals) reservations, as provided in
Section 66 entitled “Ground Transportation Services” hereof, and


 


(v)           
provision of on-airport baggage carts (other than shopping carts made available
free of charge to retail shoppers with the Concession Areas) or other
on-airport baggage-moving devices, provided that the Lessee shall retain the
right to control the placement of baggage cart stations within the Premises and
the right to reject any on-airport baggage carts at the Premises.


 


If and when the Port Authority elects to share with the other unit
terminal operators at the Airport the revenues from the activities set forth in
items (iv) and (v) of this paragraph (d)(1), the Port Authority shall likewise
share such revenues with the Lessee.


 


(2)           The
Port Authority (and any party specifically authorized thereby) may engage in
the Reserved Uses and install, operate, maintain and repair the property used
in connection therewith, in such locations as may be determined by the
Lessee.  The Lessee, at its expense,
shall provide the necessary wires and conduits for the


 


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supply of electricity and
telephone and other communications interconnections for the Reserved Uses.


 


(3)           The
Port Authority shall remit to the Lessee, out of the fees or rents actually
collected by the Port Authority from third party operators pursuant to
agreements for items (i), (ii) and (iii) of subparagraph (1) above, such fees
or rents in the following percentages: item (i), fifty percent (50%) to the
Lessee; item (ii), fifty percent (50%) to the Lessee; and item (iii), fifty
percent (50%) to the Lessee.   The
balance of all such fees or rents shall be retained by the Port Authority.  Except as specifically provided in the
foregoing sentence, the Port Authority shall have the right to all revenues
derived from the Reserved Uses without compensating the Lessee in any manner on
account of such uses or revenues.


 


(e)           Except
to the extent modified by and in accordance with an effective comprehensive
consumer services plan, the Lessee shall require in its consumer services
subleases the following with respect to hours and days of operation:


 


(1)           Retail
food and beverage service shall be made available to the public at one or more
locations continuously each day during the hours commencing no later than one
hour prior to the first scheduled aircraft departure from the Premises and
continuing until at least the completion of boarding for the last actual
departure from the Premises of a flight therefrom the same day.  At least fifty percent (50%) of the concessions
in any food service area at any one time shall operate continuously throughout
the hours specified above.


 


(2)           
Commencing no later than one hour prior to the first scheduled aircraft
departure at the Premises each day and continuing until at least the last
actual departure at the Premises of a flight for departure thereat the same
day, at least one retail newsstand shall be continuously open for business and
at least one area accessible to “meeters and greeters” shall be open.


 


(3)           
Certain foreign currency exchange services, through a staffed location or an
automated currency exchange machine, shall be continuously provided to the
public in the Foreign Inspection Services area, if any, and at least one other
central location in the Premises during the hours commencing no later than one
hour prior to the first scheduled aircraft departure from the Premises and
continuing at least until the later of (1) the completion of boarding for the
last actual departure from the Premises of a flight scheduled for departure
therefrom the same day and (2) one hour after the last actual arrival at the
Premises of a flight scheduled for arrival thereat the same day.


 


(4)           In
the arrival area and one other central location in the Premises, there shall be
at least one automated teller machine fully operational and accessible to the
public twenty-four (24) hours a day with cash in quantities sufficient to meet
reasonably anticipated demand and providing access to at least one of the two
largest banking networks available in the Port of New York District.


 


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(5)           In
any instance in which no minimum hours have been set forth above and as to all
other retail sublessees, the retail sublessees shall be required to be open for
business and operate their respective businesses as provided in the
comprehensive consumer services plan.


 


(6)           The
Lessee shall require all retail sublessees to operate their respective
businesses so as to maximize their revenues in accordance with best industry
practices and standards observed generally by first-class business enterprises
of regional or national scope which operate at other major airports.


 


(f)            (1)           Each consumer service
sublease shall provide that the sublessee in its operations pursuant to its
sublease shall not charge prices to its customers in excess of “Street Prices”,
defined as follows:


 


(i)            If
the retail sublessee conducts a similar business in off-airport location(s) in
the Greater New York City-Northern New Jersey Metropolitan Area (the “Metro
Area”), “Street Prices” shall mean the price regularly charged by the retail
sublessee for the same or similar item in the Metro Area;


 


(ii)           If
the retail sublessee does not conduct a similar business in off-airport
location(s) in the Metro Area, “Street Prices” shall mean the average price
regularly charged in the Metro Area by similar retailers for the same or
similar item;


 


(iii)          If
neither the retail sublessee nor other similar retailers sell a particular item
in the Metro Area, “Street Prices” shall mean the price regularly charged by
the retail sublessee or similar retailers for the same or similar item in any
other geographic area with a reasonable adjustment for any cost-of-living
variance between such area and the Metro Area; and


 


(iv)          If
a retail sublessee is in the business of selling duty-free goods, “Street
Prices” shall mean the price regularly charged by the sublessee or other
similar retailer for the same or similar duty-free item at other major airports
serving large urban areas in the Northeast region of the United States,
including but not limited to the Airport.


 


(2)           
Notices in form and substance reasonably satisfactory to the Port Authority
shall be conspicuously displayed in each retail sublessee’s space to the effect
that the retail sublessee adheres to the foregoing “Street Pricing” policy.


 


(g)           (1)           Each consumer service
sublease, and each Port Authority agreement with a concessionaire, shall also
provide, that the retail sublessee shall:


 


(i)            
use its best efforts in every proper manner to develop and increase the
business conducted by it under the sublease;


 


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(ii)           
not divert, or cause or allow to be diverted, any business from the Premises or
the Airport;


 


(iii)          maintain,
in English and accordance with accepted accounting practice, during the term of
the subletting under the sublease and for one (1) year after the expiration or
earlier termination or surrender thereof, and for a further period extending
until receipt of written permission from the Port Authority to do otherwise,
full and complete records and books of account recording all transactions of
the sublessee at, through, or in any way connected with its operations at the
Premises or elsewhere at the Airport, and outside the Airport if the order
therefor is received at the Airport, which records and books of account shall
be kept at all times within the Port of New York District and shall separately
state and identify each activity performed at the Airport and off the Airport
if the order therefor is received at the Airport;


 


(iv)          
the sublessee shall cause any of its Affiliates which performs services similar
to those performed by the sublessee to maintain, in English and accordance with
accepted accounting practice, during the term of the subletting under the
sublease and for one (1) year after the expiration or earlier termination or
surrender thereof, and for a further period extending until the sublessee shall
receive written permission from the Port Authority to do otherwise, full and
complete records and books of account recording all transactions of each such
Affiliate at, through, or in any way connected with its operations at the
Premises or elsewhere at the Airport, and outside the Airport if the order therefor
is received at the Airport, which records and books of account shall be kept at
all times within the Port of New York District and shall separately state and
identify each activity performed at the Airport and off the Airport if the
order therefor is received at the Airport;


 


(v)           
permit and/or cause to be permitted in ordinary business hours during the term
of the subletting under the sublease and for one (1) year thereafter, and
during such further period as is mentioned in the preceding subparagraphs
(1)(iii) and (1)(iv), the examination and audit by the officers, employees and
representatives of both the Port Authority and those of the Lessee of such
records and books of account and also any records and books of account of any
Affiliate if said Affiliate performs services similar to those performed by the
sublessee anywhere in the Port of New York District (including without
limitation all corporate records and books of account which the Port Authority
in its sole discretion believes may be relevant for the identification,
determination or calculation of all fees, rentals and other amounts paid or
payable to the Port Authority, all agreements, and all source documents),
within ten (10) days following any request by the Port Authority from time to time
and at any time to examine and audit said books and records;


 


(vi)          install
and use such cash registers, sales slips, invoicing machines and any other
equipment and devices, including without limitation computerized record-keeping
systems, for recording orders taken, or services rendered, as may be
appropriate to the sublessee’s business and necessary or desirable to keep


 


132

















 


accurate books and records as
aforesaid, and without limiting the generality of the foregoing, for any
activity involving cash sales, install and use cash registers or other
electronic cash control equipment that provides for non-resettable totals;


 


(vii)         
permit the inspection by the officers, employees and representatives of the Port
Authority and those of the Lessee of any equipment used by the sublessee
including, but not limited to, any of the equipment described in subparagraph
(1)(vi) above; and


 


(viii)        furnish
good, prompt and efficient service hereunder, adequate to meet all demands
therefor at the Premises; furnish said service on a fair, equal and
non-discriminatory basis to all users thereof; and charge fair, reasonable and
non-discriminatory prices for each unit of sale or service, provided, however,
that the retail sublessee may make reasonable and non-discriminatory discounts,
rebates or other similar types of price reductions to volume purchasers.


 


(2)           Without
implying any limitation on the right of the Port Authority to revoke its
agreement with a concessionaire, in the event of the failure of the
concessionaire to maintain, keep within the Port District or make available for
examination and audit the required books and records in the manner and at the
times or location as provided in paragraph (g)(1) above then, in addition to
all and without limiting any other rights and remedies of the Port Authority,
the Port Authority may:


 


(i)            Estimate
the gross receipts of the concessionaire on any basis that the Port Authority,
in its sole discretion, shall deem appropriate, such estimation to be final and
binding on the concessionaire and the concessionaire’s fees based thereon to be
payable to the Port Authority when billed; or


 


(ii)           If
any such books and records have been maintained outside of the Port District,
but within the Continental United States then the Port Authority in its sole
discretion may (A) require such books and records to be produced within the
Port District or (B) examine such books and records at the location at which
they have been maintained and in such event the concessionaire shall pay to the
Port Authority when billed all travel costs and related expenses, as determined
by the Port Authority for Port Authority auditors and other representatives,
employees and officers in connection with such examination and audit, or


 


(iii)          If
any such books and records have been maintained outside the continental United
States then, in addition to the costs specified in subparagraph (2)(ii) above,
the concessionaire shall pay to the Port Authority when billed all other costs
of the examination and audit of such books and records including without
limitation salaries, benefits, travel costs and related expenses, overhead
costs and fees and charges of third party auditors retained by the Port
Authority for the purpose of conducting such audit and examination.


 


133

















 


(3)           The
foregoing auditing costs, expenses and amounts set forth in subparagraphs
(2)(ii) and (2)(iii) of this paragraph (g) shall be deemed fees and charges
under the Port Authority’s agreement with the concessionaire payable to the
Port Authority with the same force and effect as all other fees and charges
thereunder.


 


(h)           (1)           The Lessee shall employ
or retain a full time trained professional staff at all times during the term
of the letting hereunder of sufficient size, expertise, ability, suitability
and experience to carry out its responsibilities under this Section.





(2)           In
addition, throughout the term of the letting hereunder, the Lessee may request
Port Authority approval to employ at the Premises, at Lessee’s sole cost and
expense, on a full-time basis a retail asset manager for its concessions
program at the Premises (such asset manager or developer being hereinafter
referred to as a “Retail Manager”), subject in all respects to the terms and
conditions of this Section.  Any fee or
other compensation to be paid to said Retail Manager shall be paid by the
Lessee directly or out of the Lessee’s share of revenue from consumer services,
and no portion of such fee or compensation shall be paid out of the Port
Authority’s share of revenue from consumer services or shall offset, reduce, be
credited against or otherwise adversely affect the amount of any fees, rent or
other revenue to be paid or payable to the Port Authority hereunder or to which
the Port Authority may be otherwise entitled. 
Nor shall the Lessee be entitled to impose charges on concessionaires,
whether in the form of key money, chargebacks or otherwise, to pass along or
recoup the aforesaid fee or other compensation to be paid to said Retail
Manager, without the prior written consent of the Port Authority.


 


The Lessee shall not finalize negotiations with any Retail Manager
until it has received notification from the Port Authority that said
arrangement is acceptable to the Port Authority and shall not execute any
agreement with any proposed Retail Manager until said Retail Manager has
entered into the appropriate contractual agreement with the Port Authority, in
form and substance satisfactory to the Port Authority in its sole discretion,
which grants consent and approval to such Retail Manager.  Any such agreement between the Lessee and a
proposed Retail Manager shall state among other things, and the Lessee agrees,
that:


 


(i)            said
agreement is subject and subordinate to this Lease (as the same may be amended,
supplemented or extended);


 


(ii)           said
agreement shall not take effect without the prior written consent of the Port
Authority thereto to be embodied in the contractual agreement referred to above
(executed by and among the Port Authority, the Lessee and the Retail Manager);


 


(iii)          any
amendment, supplement or extension of the said agreement which does not have
the express written approval of the Port Authority shall be void ab initio and of no effect whatsoever;
that if this Lease is terminated on any


 


134

















 


account prior to the expiration
of the term of the said agreement then the said agreement shall terminate
simultaneously with such termination of this Lease unless the Port Authority
shall notify the Retail Manager and the Lessee at or prior to such effective
date of termination of this Lease that the Port Authority shall and does assume
the rights and obligations of the Lessee thereunder from and after such
effective date of termination, it being understood that the Port Authority
shall have the right, but not the obligation, to be assigned and to assume the
Lessee’s rights and obligations under the Retail Manager agreement and,
further, it being understood that the Port Authority shall have no obligation
to enter into any form of recognition agreement with any concessionaire;


 


(iv)          the
Port Authority shall have the right to revoke its consent, or terminate any
agreement containing its consent, to the Retail Manager agreement at any time
without cause on thirty (30) days’ prior notice and such revocation or
termination shall not require the concurrence of the Lessee;


 


(v)           all
fees and rent collected by the Retail Manager shall be held by it in a
fiduciary capacity, in a separate trust account and not co-mingled with other
funds of the Retail Manager, solely for such purpose and thereafter remitted by
the Retail Manager on a monthly basis directly to each of the Port Authority
and the Lessee (it being understood that the Retail Manager’s interest is a
possessory and not an equitable interest), and the amount of payments collected
or to be collected from the concessionaires shall be based on fees and rent
paid or payable by the concessionaires at the Premises without deduction,
credit or offset for arrearages;


 


(vi)          in
the event of any inconsistency between the Retail Manager agreement and this
Lease, or between any retail sublease or retail license (the terms retail
“sublease” and retail “license”, and retail “sublessee”, “licensee” and
“concessionaire”, being used interchangeably for purposes of this Section) and
this Lease, or between the Retail Manager agreement and the agreement
containing the Port Authority consent thereto, or between a retail sublease and
the agreement containing the Port Authority consent thereto, then in each and
every such instance the Lease or the Port Authority consent agreement, as the
case may be, shall supercede and control.


 


Any and all monthly and annual reports which set forth Gross Receipts
(as defined herein, it being understood that the term Operator in such
definition shall mean retail sublessee, licensee or concessionaire for purposes
of this Section), in the aggregate and on a concessionaire-by-concessionaire
basis, shall be provided simultaneously directly to each of the Port Authority
and the Lessee.  The Lessee shall
provide, or shall cause to be provided, to the Port Authority the
following:  (1) on or before the
twentieth (20th) day of each month following the commencement date of any
retail sublease a statement, certified by an authorized officer of the
sublessee, of Gross Receipts arising out of operations of the sublessee under
such retail sublease for the preceding month, and (2) on or before April 15 of
each calendar year during the sublease term a statement of Gross Receipts
arising out of the operations of the sublessee for the preceding year
certified, at the sublessee’s sole expense, by a certified public accountant.


 


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(3)           Any
Retail Manager shall have sufficient authority and support, staff and
appropriate equipment, supplies and means to manage and administer those retail
subleases and other agreements with the retail sublessees and other entities to
which the Lessee is a party, or by which it is bound, relating to the retail
program at the Premises, to monitor and compel performance by all retail
sublessees and other entities and to serve as on-site liaison with the Port
Authority.  Said Retail Manager shall have
the power and authority on behalf of the Lessee to resolve all operational
issues concerning the retail program at the Premises but shall have no power or
authority to amend or modify this Lease or any agreement embodying a Port
Authority consent.  In all events, an
employee of the Lessee with managerial authority shall be available for a
minimum time span of sixteen (16) hours each day during concession operation
hours to meet with Port Authority representatives in person at the Premises and
available at other times by telephone, with the ability in an emergency
situation relating to retail concession matters to arrive at the Airport by car
within two hours after being called.


 


(4)           Neither
a Retail Manager nor any Affiliate thereof shall conduct or have any interest
whatsoever in any entity conducting a consumer service operation in any
Concession Area, unless the Port Authority has explicitly approved in writing
specific exceptions after having been furnished such information as it may
require and subject to such qualifications, conditions, limitations and
restrictions as part of any such approval.


 


(5)           The
Lessee shall not knowingly either employ or permit the employment of any
management, supervisory or other personnel of the Lessee (including but not
limited to such Retail Manager or any contractor or subcontractor,
representative or agent of the Lessee), whose employment constitutes a conflict
of interest or whose actions are inconsistent with the highest level of
honesty, ethical conduct or public trust or are adverse to the public
interest.  Notwithstanding the
foregoing, the Lessee shall be under no obligation to refrain from hiring any
Person if to do so would be a violation of law, or to terminate any Person if
to do so would be a violation of law or of any applicable right of such Person,
contractual or otherwise.


 


(i)            On
a continuing basis through the end of the term of the letting hereunder, the
Lessee shall undertake and execute through a variety of media, in a manner
acceptable to the Port Authority, such advertising and promotional programs as
shall bring to the attention of the public, generally, and actual and potential
enplaning passengers and their escorts and guests and the aviation and tourist
industries, in particular, the positive features of the retailing program
managed by the Lessee as provided in this Lease and such other information to
be presented in such style and format as shall project, consistent with the
truth, a desirable image of such retailing program, the Premises and the
Airport.  The Port Authority shall not
have any responsibility for, and shall not bear any of the costs of, the
foregoing.


 


(j)            Without
limiting the generality of the provisions of Sections 74 through 80 herein, the
following shall apply with respect to each of the concessions described in said
Sections:


 


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(1)           The
Lessee agrees that it will furnish to the concessionaire sufficient and
suitable space within the Premises to carry on any operation as may be required
of or desired by the Lessee.


 


(2)           The
Lessee shall bring to the perimeter of the space to be occupied by the
concessionaire, and shall install, the necessary pipes, wires and conduits
(including to any food service area), for the supply of electricity and HVAC
for such operations (including but not limited to electricity to machines and
displays with respect to permitted vending machines, public telephones,
advertising displays and insurance counters), all without charge to the
concessionaire or the Port Authority, except for electricity to the Restaurant
Operator (as herein defined) which may be charged at cost.  With respect to any Restaurant Operator, the
Lessee shall also provide and install pipes, wires and conduits for the supply
of gas and water together with necessary steam and waste lines for use in
connection with the operation.  The
Lessee shall supply said utilities and services to the concessionaire,
including to any storage areas provided to the concessionaire as required
herein, and shall not charge the concessionaire or the Port Authority for any
portion of same (except electricity to the Restaurant Operator as aforesaid).


 


(3)           Any
agreement with a concessionaire shall provide that such concessionaire shall
furnish at its expense all necessary fixtures, equipment, furniture and
personal property required in connection with the operation and all
construction work necessary to accommodate such installations.  With respect to in-line spaces, the agreement
shall also provide that the concessionaire will perform all work necessary or
required to finish off the space, including the finishing of the floors and
ceilings from the structural slab and the walls from the rough partitions, the
decor and color scheme of the concession area and the facilities and fixtures
therein as well as the location of fixtures thereon, which shall be subject to
the approval of the Lessee and compliance with the Port Authority Tenant
Construction or Alteration Application process.


 


(4)           If
the Lessee desires to have a Person or entity conduct such operations other
than the Port Authority’s proposed concessionaire, except for goods and
services described in Section 75 or any which would constitute Reserved Uses,
the Lessee may employ any other Person of its choice (which other Person may
not be the Lessee or an Affiliate thereof) to do so, provided, however, such
other Person first obtains a permit from the Port Authority authorizing such
Person to operate the establishment in a portion or portions of the Premises as
designated by the Lessee with the prior approval of the Port Authority.  Prior to the issuance of any such permit by
the Port Authority, such Person may be required to submit to the Port Authority
evidence satisfactory to the Port Authority of its qualifications, the scope of
its proposed operations and the standards of service it will provide.  Any such permit shall provide that such
concessionaire will conduct its operations thereunder in a first-class manner
in accordance with the best practices in the industry and shall comply with the
maximum Port Authority standards with respect to service, health, sanitary and
safety measures.


 


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Paragraph (h)(2)(vi) of this
Section shall apply with respect to any inconsistency between the terms of the
permit and the terms of the agreement between the Lessee and the
concessionaire.  Without limiting the
foregoing, prior to the issuance of the permit the Port Authority shall make a
copy of the same available to the Lessee and, upon the execution of the permit
by the proposed concessionaire, the same shall be consented to in writing by
the Lessee. Such other Person shall be required to pay to the Port Authority a
fee but such fee shall not in any event exceed the fees or charges that would
be retained by the Port Authority if such establishment were operated by a
regular concessionaire of the Port Authority. 
The Port Authority permit will not be revoked without cause by the Port
Authority, without the prior consent of the Lessee.  Nothing in the preceding sentence shall mean or imply, or be
deemed to mean or imply, that the Lessee’s consent shall be required for the
Port Authority to revoke its permit with, or other agreement containing its
consent to, a Retail Manager, and such Lessee’s consent shall not be required.


 


(5)           The
contract between a concessionaire and the Port Authority, or the permit between
the concessionaire and the Port Authority where such concessionaire has entered
into an agreement with the Lessee in accordance with this Lease, shall contain
appropriate provisions permitting cancellation of such contract on short notice
with and without cause.  The Lessee’s
agreement with the concessionaire shall contain appropriate provisions
permitting cancellation of such contract on short notice with and without
cause.  In the event of such
cancellation without cause by the Port Authority (consistent with the
penultimate sentence of subparagraph (4) above regarding the prior consent of
the Lessee, it being understood that the same excepts goods and services
described in Section 75 hereof or any which constitute Reserved Uses) or the
Lessee, as the case may be, the Lessee agrees (and its agreement with the
concessionaire shall provide that the Lessee agrees) to reimburse the
concessionaire for its unamortized investment in the interior finishes and
trade fixtures and title to such trade fixtures shall thereupon vest in the
Lessee; provided, however, where such agreement is canceled expressly on the
basis of the failure of the concessionaire to keep, perform or observe any of
the terms and provisions of said agreement on its part to be kept, performed or
observed or on the basis of one or more event or events of default as specified
in said agreement such provision for Lessee reimbursement is not to obtain or
apply.


 


Section 74.             Restaurant and Bar


 


(a)           The
Lessee shall select and thereafter enter into a contract or agreement with one
or more qualified restaurant operators (each such restaurant operator being
hereinafter referred to in this Section as the “Restaurant Operator”)
authorizing the Restaurant Operator to operate in the Premises facilities for
the sale of food, alcoholic and non-alcoholic beverages and similar items for
consumption in the Premises, subject in all respects to Section 73 hereof
including, but not limited to, the requirement to obtain a permit from the Port
Authority authorizing such Restaurant Operator to operate a restaurant service
in a portion of the Premises hereunder. 
The agreement with the Restaurant Operator shall cover the arrangements
for the space to be used in for


 


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restaurant service within the
Premises including the amount, type and location of the space.


 


(b)           The
agreement between the Restaurant Operator and the Lessee may not call for any
fixed rental or fee but shall provide that the Restaurant Operator shall pay a
percentage fee to the Port Authority based upon the Gross Receipts of the
Restaurant Operator from the sale of food, alcoholic and non-alcoholic
beverages, which fee shall be subject to the prior written approval of the Port
Authority and shall be incorporated into the permit to be issued by the Port
Authority.  The Port Authority shall pay
the Lessee for the use of the space by the Restaurant Operator a fee equivalent
to 80% of the percentage fee collected by the Port Authority from the
Restaurant Operator.  It is hereby
understood and agreed that 20% of the percentage fee collected from the
Restaurant Operator by the Port Authority shall be retained by the Port
Authority.


 


(c)           In
the event the Restaurant Operator selected by the Lessee to provide food,
alcoholic and non-alcoholic beverages and similar items for sale and
consumption on the Premises is the same concessionaire providing in-flight
meals to the Lessee and is a wholly owned subsidiary of the Lessee, the fees to
be paid to the Port Authority shall apply only to the Gross Receipts of the
Restaurant Operator from the sale of food, alcoholic and non-alcoholic beverages
on the Premises.


 


(d)           There
shall be no other payments by the Restaurant Operator to the Lessee except for
appropriate payments for any electricity which may be furnished to the
Restaurant Operator by the Lessee.  The
rental and fees payable hereunder shall be paid in the manner, under the
conditions, and at the times provided in Section 82 hereof.  Both the agreement between the Lessee and
the Restaurant Operator and the permit to be issued by the Port Authority shall
have provisions covering the fee in accordance with this Section and, without
limiting the generality of any other provision of this Section, the permit
shall control as to the manner, conditions and terms of payment.


 


Section 75.             Vending Machines, Public Telephones,
Advertising Displays


 


(a)           If
requested by the Lessee the Port Authority, by itself or through contractors,
lessees, or permittees, shall install and maintain in the Premises vending
machines, public telephones, and/or advertising displays, at such locations and
to such extent as requested by the Lessee.


 


(b)           The
Port Authority shall require its contractors, lessees, or permittees to pay a
fee, which may be a percentage fee subject to a minimum amount, based upon the
Gross Receipts received from such vending machines, public telephones, and
advertising displays or a fixed fee.


 


(c)           The
Port Authority shall pay the Lessee an annual fee equivalent to the percentages
set forth below of the fee collected by the Port Authority from its
contractors, lessees, or permittees aforementioned: (1) 50% with respect to
vending machines (2) 50% with respect to public telephones and (3) 50% with
respect to


 


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advertising.  The fees payable hereunder shall be paid in
the same manner, under the conditions and at the times, provided in Section 82
hereof.


 


Section 76.             Insurance Covering Air Transportation


 


(a)           The
Port Authority may enter into contracts or agreements with qualified insurance
vendors requiring such vendors to sell or arrange for the sale, at the
Premises, of insurance covering air transportation, of such types and coverages
as may be required by the Lessee.


 


(b)           The
contract between the insurance vendor and the Port Authority shall provide that
such vendor shall pay a basic rental for the space occupied by such vendor in
the Premises in connection with the sale of such insurance.  The amount of the basic rental to be paid by
the vendor shall be agreed upon between the Port Authority and the Lessee.


 


(c)           The
contract shall further provide that the vendor shall pay to the Port Authority
an amount equal to a percentage of the vendor’s gross premiums from the sale of
such insurance, less the amount of any basic rental paid by the vendor.  Basic rental and percentage fees from the
vendor shall be divided equally between the Port Authority and the Lessee.   The rental and fees payable hereunder shall
be paid in the manner, under the conditions, and at the times provided in
Section 82 hereof.


 


(d)           The
contract with the insurance vendor will provide that:  (1) if the Lessee so requests, the vendor shall provide a general
information service to the public; and (2) the vendor shall not be required to
provide a counter for the sale of insurance if, in its opinion, there will be
insufficient patronage to support such a counter; and (3) the vendor shall not
be required to continue to provide at any designated location vending machines
for the sale of insurance when the gross premiums from any such machines at any
such location is less than $200 per month, provided, however, if twenty-four
(24) hour counter coverage is not provided there shall be at least one machine
in the Premises; and (4) the provisions of insurance policies and the minimum
coverage offered shall be acceptable to the Lessee.


 


(e)           The
location of insurance counters and insurance vending machines shall be
determined by the Lessee subject to the approval of the Port Authority and in
accordance with the Lessee’s comprehensive plan.  The Lessee shall not require unreasonably frequent moves of insurance
counters and insurance vending machines hereunder.


 


(f)            There
shall be no payments by the insurance vendor to the Lessee for utilities which
may be furnished to the insurance vendor by the Lessee.


 


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Section 77.             Newsstands


 


(a)           The
Lessee shall select and thereafter enter into an agreement or agreements with a
qualified newsstand operator or operators (each such newsstand operator being
hereinafter referred to in this Section as the “Newsstand Operator”)
authorizing such operators to operate newsstands in the Premises for the sale
at retail of such of the following items as may be approved by the Port
Authority:  newspapers, magazines,
cigarettes, cigars and other tobacco supplies, candy, chewing gum, playing
cards and paper-bound books, to the extent required by the Lessee, subject in
all respects to Section 73 hereof including, but not limited to, the
requirement to obtain a permit from the Port Authority authorizing such
Newsstand Operator to operate a newsstand service in a portion of the Premises
hereunder.   The Port Authority shall
require such operator or operators to sell at retail from its or their
locations, such other items or furnish such other services as may be approved
by the Port Authority and as are requested by the Lessee.


 


(b)           The
Lessee agrees that it shall furnish to the Newsstand Operator sufficient and
suitable space for conducting and carrying on its aforesaid operation. The
Lessee shall furnish without additional charge, a reasonable amount of storage
space for the use of the Newsstand Operator. 
The location of newsstands and appropriate storage space for the use of
the Newsstand Operator(s) shall be determined by the Lessee subject to the
approval of the Port Authority and in accordance with the Lessee’s
comprehensive plan.


 


(c)           The
contract between the Newsstand Operator(s) and the Lessee shall provide that
such operator shall pay to the Port Authority a basic rental for the space
occupied by such operator in the Premises in connection with the operation of
the newsstand.  The amount of the basic
rental to be paid by the Newsstand Operator(s) shall be agreed upon between the
Port Authority and the Lessee.


 


(d)           The
agreement with the Newsstand Operator(s) shall further provide that the
operator will pay to the Port Authority a percentage fee of the Gross Receipts
derived by the Newsstand Operator from all sales made by the Newsstand Operator
less the amount of the basic rental paid by the Newsstand Operator.  Basic rental and percentage fees from the
vendor shall be divided equally between the Port Authority and the Lessee.


 


(e)           The
rental and fees payable hereunder shall be paid in the manner, under the
conditions, and at the times provided in Section 82 hereof.  Any agreement with the Newsstand Operator
and any permit to be issued by the Port Authority shall have provisions
covering the percentage fee in accordance with this Section and, without
limiting the generality of any other provision of this Section, the permit
shall control as to the manner, conditions, and terms of payment.


 


(f)            The
agreement with the Newsstand Operator(s) will further provide that the
Newsstand Operator will be permitted to sell at retail only such merchandise as
is normally sold at newsstands in operation at Port Authority Airports.  If there is a demand or need by travelers
and other users of the Premises for other merchandise and there is no other
tenant, permittee or licensee of the Port Authority


 


141

















 


available to provide such
merchandise the scope of the newsstand’s operation may be increased, provided,
however, that no merchandise objectionable to the Lessee or the Port Authority
shall be sold.


 


(g)           There
shall be no payments by the Newsstand Operator to the Lessee for utilities
which may be furnished to the Newsstand Operator by the Lessee.


 


Section 78.             Foreign Currency Exchange


 


(a)           The
Lessee shall select and thereafter enter into an agreement or agreements with a
qualified foreign currency exchange operator or operators (which Person or
entity is sometimes hereinafter referred to as the “Currency Exchange
Operator”) providing for the Currency Exchange Operator to operate an
establishment in the Premises for the exchange, purchase and sale of domestic
and foreign currencies (hereinafter called the “Foreign Currency Exchange
Service”), subject in all respects to Section 73 hereof including, but not
limited to, the requirement to obtain a permit from the Port Authority
authorizing such Currency Exchange Operator to operate a Foreign Currency
Exchange Service.


 


(b)           The
Lessee agrees that it shall furnish to the Currency Exchange Operator
sufficient and suitable space for conducting and carrying on its aforesaid
operation.


 


(c)           The
agreement between the Lessee and the Currency Exchange Operator may not call
for any fixed rental or fee but shall provide that the Currency Exchange
Operator shall pay to the Port Authority a percentage fee based upon the Gross
Receipts of the Currency Exchange Operator, which provision shall also be
incorporated in any permit to be issued by the Port Authority hereunder.   The amount payable by the Currency Exchange
Operator to the Port Authority shall be as may be agreed upon between the Port
Authority and the Lessee.  It is hereby
understood and agreed that 50% of the percentage fee payable by the Currency
Exchange Operator and actually collected by the Port Authority therefrom shall
be remitted by the Port Authority to the Lessee with the Port Authority
retaining the balance.   The rental and
fees payable hereunder shall be paid in the manner, under the conditions, and
at the times provided in Section 82 hereof. 
Any agreement with the Currency Exchange Operator and any permit to be
issued by the Port Authority shall have provisions covering the fee in
accordance with this Section and, without limiting the generality of any other
provision of this Section, the permit shall control as to the manner,
conditions, and terms of payment.


 


(d)           There
shall be no payments by the Currency Exchange Operator to the Lessee for
utilities which may be furnished to the Currency Exchange Operator.


 


Section 79.             Retail Banking


 


(a)           The
Lessee shall select and thereafter enter into an agreement or agreement with a
qualified retail banking operator or operators (which Person or entity is


 


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sometimes hereinafter referred
to as the “Retail Bank Operator”) providing for such Retail Bank Operator to
operate a service, within Concession Areas, performing one or more of the
following functions as agreed between them: 
the maintaining of accounts, receipt and/or disbursement of funds and
including automatic teller machine service and foreign currency exchange (hereinafter
called the “Retail Banking Service”), subject in all respects to Section 73
hereof including, but not limited to, the requirement to obtain a permit from
the Port Authority authorizing such Retail Bank Operator to operate a Retail
Banking Service.


 


(b)           The
Lessee agrees that it shall furnish to the Retail Bank Operator sufficient and
suitable space for conducting and carrying on its aforesaid operation.


 


(c)           The
agreement between the Lessee and the Retail Bank Operator shall provide that
the Retail Bank Operator shall pay a basic fixed fee or rental to the Port
Authority, which provision also shall be incorporated in any permit to be
issued by the Port Authority hereunder. 
The amount payable by the Retail Bank Operator to the Port Authority
shall be as may be agreed upon between the Port Authority and the Lessee.  It is hereby understood and agreed that 50%
of such fixed fee payable by the Retail Bank Operator and actually collected by
the Port Authority therefrom shall be remitted by the Port Authority to the
Lessee with the Port Authority retaining the balance.   The rental and fees payable hereunder shall be paid in the
manner, under the conditions, and at the times provided in Section 82
hereof.   Any agreement with the Retail
Bank Operator and any permit to be issued by the Port Authority shall have
provisions covering the rental and fees in accordance with this Section and,
without limiting the generality of any other provision of this Section, the
permit shall control as to the manner, conditions, and terms of payment


 


(d)           There
shall be no payments by the Retail Bank Operator to the Lessee for utilities
which may be furnished to the Retail Bank Operator by the Lessee.


 


Section 80.             Other Consumer Services


 


(a)           If
the Lessee requests that additional consumer services be provided in the Premises
for the sale of other items or the furnishing of other services, the Lessee
shall either (i)  request that the Port
Authority secure qualified tenants, permittees or licensees (hereinafter each
referred to as the “Additional Operator”), to furnish such consumer services
and the Port Authority shall endeavor to secure such Additional Operator and to
enter into contracts or agreements with such Additional Operator requiring it
to furnish the item or services to the extent required by the Lessee, or (ii)
notify the Port Authority in writing that the Lessee is seeking such Additional
Operator (including the proposed contractual arrangements, if any, between the
Lessee and the proposed Additional Operator), satisfactory to the Port
Authority and subject to its approval, provided that the Lessee complies with
all the terms and provisions of Section 73 hereof, including without limitation
its prior submittal to the Port Authority of an updated comprehensive plan for
consumer services covering such proposed Additional Operator in accordance with
and subject to said Section 73, and in compliance with the


 


143

















 


provisions covering the
selection of the Additional Operator as described in Sections 73 (c) and 73(j) hereof
and also subject to Sections 64, 81 and 82 hereof.


 


(b)           Each
such Additional Operator must enter into an appropriate contractual arrangement
with the Port Authority, as described in Sections 73(c) and 73(j) hereof,
including without limitation an appropriate Port Authority permit authorizing
such Additional Operator to operate the consumer services at the Premises.


 


(c)           (1)           The contract between
the Additional Operator and the Port Authority shall provide that such
Additional Operator shall pay to the Port Authority a basic rental for the
space occupied by such Additional Operator in the Premises in connection with
the furnishing of the consumer services. 
The amount of the basic rental to be paid by the Additional Operator
shall be agreed upon between the Port Authority and the Lessee.


 


(2)           The
contract shall further provide that such Additional Operator shall also pay a
percentage fee based upon the Gross Receipts of such Additional Operator from
the operation of such consumer service, less the amount of any basic rental
paid by the Additional Operator.


 


(3)           Basic
rental and percentage fees shall be divided equally between the Port Authority
and the Lessee. The rental and fees payable hereunder shall be paid in the same
manner, under the conditions, and at the times provided in Section 82 hereof.


 


(4)           Notwithstanding
the foregoing provisions of subparagraphs (1), (2) and (3) above, the contract
between the Port Authority and the Additional Operator may provide that the
Additional Operator will pay to each of the Port Authority and the Lessee a
basic minimum rental plus a percentage of Gross Receipts (with or without an
annual exemption amount) to be shared equally between the Port Authority and
the Lessee and will also pay to the Lessee an equal amount as such basic
minimum rental, with such payments of the basic minimum rental and percentage
fee to be made by the Additional Operator directly to the Port Authority and
directly to the Lessee.


 


(d)           The
Additional Operator will furnish and install at its expense all necessary
fixtures, stands, counters and equipment required in connection with its
operation and all construction work necessary to accommodate such
installations.


 


(e)           The
Port Authority may require the contract with the Additional Operator to include
limitations as to the scope of the activities of such Additional Operator in
light of the availability of similar services in the concession area or
Premises.


 


(f)            The
Lessee understands and agrees that it may not itself nor will the Port
Authority install or cause to be installed coin-operated lockers on the
Premises.


 


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Section 81.             Subletting of the Premises for Consumer
Services


 


(a)           Irrespective
of whether the Persons selected in accordance with this Agreement to furnish
the consumer services set forth in Sections 74, 75, 76, 77, 78, 79, and 80  hereof have contracts with or are
contractors or permittees of the Port Authority, the Lessee may require that such
Persons enter into separate agreements or subleases with the Lessee as a
condition precedent to the occupancy of space within and the operation of such
establishments upon the Premises, provided, however, that all such Persons must
have first obtained a permit from the Port Authority authorizing them to
operate such establishments. The terms and provisions of the said agreements or
subleases shall not be inconsistent with the terms of this Agreement except
that the same may provide for cancellation by the Lessee on short notice in the
event the services furnished by such Persons are unsatisfactory to the Lessee.


 


(b)           Section
73(j) shall fully apply with respect to subleases and other agreements entered
into between the Lessee and a Person pursuant to this Section, including but
not limited to the requirement of such Persons to pay to the Port Authority a
fee, with such fee not in any event to exceed the fees or charges that would be
retained by the Port Authority if their respective establishments were operated
by regular concessionaires of the Port Authority.


 


Section 82.             Obligations in Connection with Consumer
Services Agreements


 


(a)           The
Port Authority shall administer all contracts and agreements with its tenants,
licensees or permittees furnishing consumer services at the Premises.  All such contracts and agreements shall
contain provisions, among others, providing that such tenant, licensee or
permittee shall:


 


(1)           Take
all reasonable measures in every proper manner to maintain, develop and
increase the business conducted by it at the Premises;


 


(2)           Not
divert or cause or allow to be diverted any business from the Premises;


 


(3)           Maintain
in accordance with accepted accounting practice, records and books of account
recording all transactions at, through or in any way connected with the
Premises, which records and books of account shall be kept at all times within
the Port of New York District and permit, in ordinary business hours during
such time, the examination and audit by the officers, employees and
representatives of the Port Authority of such records and books of account;


 


(4)           Permit
in ordinary business hours the inspection by the officers, employees and
representatives of the Port Authority or the Lessee of any equipment used by
the tenant, licensee or permittee, including but not limited to cash registers
and recording tapes;


 


145

















 


(5)           Furnish
on or before the twentieth day of each month following the commencement date of
the operation a sworn statement of Gross Receipts arising out of the operations
of the tenant, licensee or permittee, for the preceding month;


 


(6)           Install
and use such cash registers, sales slips, invoicing machines and any other
equipment or devices for recording orders taken or services rendered as may be
appropriate to the business and necessary or desirable to keep accurate records
of Gross Receipts;


 


(7)           Furnish
good, prompt and efficient service, adequate to meet all demands therefor at
the Premises; furnish said service on a fair, equal and nondiscriminatory basis
to all users thereof, and charge fair, reasonable and nondiscriminatory prices
for all items and/or services which it is permitted to sell and/or render; and


 


(8)           Promptly
observe, comply with and execute the provisions of any and all present and
future governmental laws, rules, regulations, requirements, orders and
directions which may pertain and apply to its operations or the use and
occupancy of the Premises.


 


(b)           The
Port Authority does not guarantee the payments of rentals and fees required to
be paid by the tenant, licensee, permittee, concessionaire or operator pursuant
to the provisions of Sections 74, 75, 76, 77, 78, 79 and 80 hereof and shall
have no obligation to the Lessee to make any payments to the Lessee until the
fees or rentals are actually collected from the tenant, licensee, permittee or
operator.  The Port Authority will
advise the Lessee of all accounts remaining delinquent for more than sixty (60)
days and will consult with the Lessee as to the appropriate steps to effect
collection.  A default by the Port
Authority in observing the provisions of the preceding sentence shall not
result in the imposition of any liability on the Port Authority with respect to
the Lessee.


 


Section 83.             Use of Additional Gates by other Airlines


 


It is recognized and agreed that so long as any of the Additional Gates
have not become a part of the Premises, that they may be made available by the
Port Authority at the discretion and direction of the Port Authority for use by
Aircraft Operators other than the Lessee (“Other Airline Users”) and in
accordance with the following:


 


(a)           Each
such Other Airline User shall be required to obtain from the Port Authority an
appropriate agreement covering its use of any of the Additional Gates, or
portion thereof, which agreement may be in the form of a Port Authority permit
or gate use agreement or otherwise. This agreement will provide that the Port
Authority may revoke it without cause on thirty days’ notice or less.


 


146

















 


(b)           Each
Other Airline User shall pay directly to the Port Authority 100% of all charges
and fees for the use of such Additional Gates, or portion thereof.


 


(c)           The
Lessee shall use its best efforts to provide the necessary Accommodations
(except for aircraft gate capacity) required in order that an Other Airline
User may use an Additional Gate.  The
Lessee may charge each Other Airline User reasonable and non-discriminatory
rates, fees and charges based upon the recovery by the Lessee of a pro rata
share of the Lessee’s costs of the services provided to the Other Airline
User.  Any arrangement between the
Lessee and an Other Airline Users for Accommodations shall be submitted by the
Lessee to the Port Authority for its consent, which will be in the form of a consent
agreement prepared by the Port Authority and to be executed by the Lessee, the
Other Airline User and the Port Authority. 
Nothing contained herein shall in any way affect the discretion of the
Port Authority in granting or withholding its consent to any such arrangement
between the Lessee an a Other Airline User, and such consent may contain such
terms and conditions including but not limited to such financial or other
conditions which may include a fixed charge or a charge based upon a percentage
of the Lessee’s gross receipts arising therefrom, as the Port Authority may, at
that time, elect, and all provisions of the Lease requiring the prior written
consent or approval of the Port Authority.


 


Section 84.             Definitions


 


The following terms, when used in this Agreement, shall, unless the
context shall require otherwise, have the respective meanings given below:


 


“Accommodated Handled Airline” shall have the meaning set forth in
Section 43 hereof entitled “Additional Rights of the Port Authority as to Portions
of the Premises”.


 


“Accommodated Sublessee Airline” shall have the meaning set forth in
Section 43 hereof entitled “Additional Rights of the Port Authority as to
Portions of the Premises”.


 


“Accommodations” shall have the meaning set forth in Section 43 hereof
entitled “Additional Rights of the Port Authority as to Portions of the
Premises”.


 


“Additional Gate Rental Amount” shall have the meaning set forth in
Section 4 hereof entitled “Rental”.


 


“Additional Gate Rentals” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“Additional Gates” shall have the meaning set forth in paragraph (g) of
Section 1 hereof entitled “Letting”.


 


“Additional Operator” shall have the meaning set forth in Section 80
hereof entitled “Other Consumer Services”.


 


147

















 


“Additional Gates” shall have the meaning set forth in paragraph (g) of
Section 1 hereof entitled “Letting”.


 


“Additional Rental” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“Adjustment Period” shall have the meaning set forth in Section 4
hereof entitled “Rental”


 


 “Affiliate” shall mean in the
singular and “Affiliates” shall mean in the plural any Person that directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the Lessee and any Person in which the Lessee or a
shareholder of the Lessee has an ownership, licensor/licensee or
franchiser/franchisee interest or relationship, but if the Lessee shall be a
corporation whose Voting Securities shall be registered with the Securities and
Exchange Commission and publicly traded on a regular basis then only such
shareholder of the Lessee having an ownership interest greater than five
percent (5%).  As used in this
definition, the term “control” (including the terms controlling, controlled by
and under common control with) shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
the Person, whether through the ownership of Voting Securities, by contract or
otherwise.


 


“Affiliated Scheduled Aircraft Operator” shall have the meaning set
forth in Section 19 hereof entitled “Assignment and Sublease”.


 


“Affiliated Scheduled Aircraft Operator Agreement” shall have the
meaning set forth in Section 19 hereof entitled “Assignment and Sublease”.


 


“Agreement” shall mean this Agreement of Lease.


 


“Air Terminal Highway” and “Air Terminal Highways” shall mean those
portions of the Airport designated and made available temporarily or
permanently by the Port Authority to the public for general or limited highway
use.


 


“AirTrain” shall have the meaning set forth in Section 58 entitled
“Future Airport Transportation Facilities and Operations Use of Portions of the
Premises”.


 


“Aircraft Operator” shall mean (a) a Person owning one or more aircraft
which are not leased or chartered to any other Person for operation, or (b) a
Person to whom one or more aircraft are leased or chartered for operation
whether the aircraft so owned, leased or chartered are military or
non-military, or are used for private business, pleasure or governmental
business, or for carrier or non-carrier operations, or for scheduled or
non-scheduled operations or otherwise. 
Said phrase shall not mean the pilot of an aircraft unless he or she is
also the owner or lessee thereof or a Person to whom such aircraft is
chartered.


 


148

















 


“Airport” shall mean the land and premises in the City of New York, in
the County of Queens and State of New York, which are shown in green upon the
exhibit attached to the Basic Lease marked “Map II” and lands contiguous
thereto which may have been heretofore or may hereafter be acquired by the Port
Authority to use for air Terminal purposes.


 


“Airport Central Taxi Stack” shall have the meaning set forth in
Section 46(b) entitled “Restrictions on Use of Passenger Terminal Frontage
Roadways - Use of Airport Taxi Dispatchers and Roadway Frontage Management”.


 


“Annual Capital Cost” shall have the meaning set forth in Section 53
hereof entitled “Assumption of Maintenance and Repair of the Terminal by the
Port Authority”.


 


“ASDO” shall have the meaning set forth in Schedule F attached hereto.


 


“ASM” shall have the meaning set forth in Section 49 entitled “Lessee’s
Financial Condition-Limitation of Lease Term-Triggering Events”.


 


“Assumable Maintenance and Repair” shall have the meaning set forth in
Section 53 (a) hereof entitled “Assumption of Maintenance and Repair of the
Terminal by the Port Authority”.


 


“Assumable Maintenance and Repair Date” shall have the meaning set
forth in Section 53(b) hereof entitled “Assumption of Maintenance and Repair of
the Terminal by the Port Authority”.


 


“Basic Lease” shall mean the agreement between the City of New York and
the Port Authority dated April 17, 1947, as the same from time to time may have
been or may be supplemented or amended. 
Said agreement dated April 17, 1947, has been recorded in the Office of
the Register of The City of New York, County of Queens, on May 22, 1947, in
Liber 5402 of Conveyances, at pages 319 et seq.


 


“BASIS” shall have the meaning set forth in Schedule F attached hereto.


 


“Bid Conditions” shall have the meaning set forth in Schedule E
attached hereto.


 


“Books and Records” shall have the meaning set forth in Section 65
hereof entitled “Books and Records”.


 


“Building Rental” shall have the meaning set forth in Section 4 hereof
entitled “Rental”.


 


“Capital Cost” shall have the meaning set forth in Section 53 hereof
entitled “Assumption of Maintenance and Repair of the Terminal by the Port
Authority”.


 


“Central Terminal Area” or “CTA” shall have the meaning set forth in
Section 68(a) hereof entitled “Ground Transportation within the Central
Terminal Area”.


 


149

















 


“Chilled Water” shall have the meaning set forth in Section 39(a)
hereof entitled “Hot Water and Chilled Water Requirements”.


 


“City” and “City of New York” shall mean the municipal corporation of
the State of New York known as the City of New York.


 


“Civil Aircraft Operator” shall mean a Person engaged in civil
transportation by aircraft or otherwise operating aircraft for civilian
purposes, whether governmental or private. 
If any such Person is also engaged in the operation of aircraft for
military, naval or air force purposes, he or she shall be deemed to be a Civil
Aircraft Operator only to the extent that he or she engages in the operation of
aircraft for civilian purposes.


 


“Claim” and “Claims” shall have the meaning set forth in Section 61
hereof entitled “Storage Tanks”.


 


“Cogeneration Agreement” shall have the meaning set forth in Section
39(a) hereof entitled “Hot Water and Chilled Water Requirements”.


 


“Cogeneration Facility” shall have the meaning set forth in Section
39(a) hereof entitled “Hot Water and Chilled Water Requirements”.


 


“Concession Areas” shall have the meaning set forth in Section 73
hereof entitled “Consumer Services”.


 


“Condition Survey” shall have the meaning set forth in Section 54 (a)
hereof entitled “Joint Periodic Condition Survey”.


 


“Condition Survey Contract” shall have the meaning set forth in Section
54 (a) hereof entitled “Joint Periodic Condition Survey”.


 


“Condition Survey Contractor” shall have the meaning set forth in
Section 54 (a) hereof entitled “Joint Periodic Condition Survey”.


 


“Condition Survey Report” shall have the meaning set forth in Section
54 (a) hereof entitled “Joint Periodic Condition Survey”.


 


“Consolidated Counters” shall have the meaning set forth in Section 66
(b) hereof entitled “Ground Transportation Services”.


 


“Consumer Price Index” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“Construction Work” shall have the meaning set forth in Section 2(a)
hereof entitled “Construction by the Lessee”.


 


150

















 


“Contractor” shall have the meaning set forth in Schedule E attached
hereto.


 


Cost of Assumable Maintenance and Repair” shall have the meaning set
forth in Section 53 hereof entitled “Assumption of Maintenance and Repair of
the Terminal by the Port Authority”.


 


“Costs of the Condition Survey” shall have the meaning set forth in
Section 54 (a) hereof entitled “Joint Periodic Condition Survey”.


 


“CPI” or “Consumer Price Index” shall have the meaning set forth in
Section 4 hereof entitled “Rental”.


 


“CPI Percentage Increase” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“CTA” shall have the meaning set forth in Section 68(a) hereof entitled
“Ground Transportation within the Central Terminal Area”.


 


“CTA Ground Transportation Service” shall have the meaning set forth in
Section 68(b) hereof entitled “Ground Transportation within the Central
Terminal Area”.


 


“CTA Omnibus Service” shall have the meaning set forth in Section 68(b)
hereof entitled “Ground Transportation Within the Central Terminal Area”.


 


“CTA Supplementary Service” shall have the meaning set forth in Section
68(b) hereof entitled “Ground Transportation Within the Central Terminal Area”.


 


“Currency Exchange Operator” 
shall have the meaning set forth in Section 78 hereof entitled “Foreign
Currency Exchange”.


 


“DEC” shall mean the New York State Department of Environmental
Conservation.


 


“Debt” shall have the meaning set forth in Exhibit 49.1 hereof.


 


“Debt Financings” shall have the meaning set forth in Exhibit 49.1
hereof.


 


“Discharge” shall have the meaning set forth in Section 61 hereof
entitled “Storage Tanks”.


 


“Distribution Portion of the System” shall mean the Distribution
Portion of the System as described in the General Airport Agreement.


 


“EEO” shall have the meaning set forth in Schedule E hereof.


 


“Effective Date” shall have the meaning set forth in the first
paragraph hereof.


 


151

















 


“Employee Surface Carrier(s)” shall have the meaning set forth in
Section 67 hereof entitled “Ground Transportation”.


 


“Environmental Damages” shall mean any one or more of the following:
(i) the presence in, on, or under the Terminal of any Hazardous Substance
whether such presence occurred prior to or during the term of the letting under
this Agreement or resulted from any act or omission of the Lessee or others,
and/or (ii) the disposal, discharge, release or threatened release of any
Hazardous Substance from the Terminal or of any Hazardous Substance from under
the Terminal and/or (iii) the presence of any Hazardous Substance in, on or
under other property at the Airport as a result of (a) the Lessee’s use and
occupancy of the Premises or the performance of the Construction Work or any
other work or activities at the Terminal or (b) a migration of a Hazardous
Substance from the Terminal or from under the Terminal or (c) the Lessee’s
operations at the Airport, and/or (iv) any personal injury, including wrongful
death, or property damage, arising out of or related to any Hazardous Substance
described in (i), (ii) or (iii) above, and/or (v) the violation of any
Environmental Requirement pertaining to any Hazardous Substance described in
(i), (ii) or (iii) above, the Terminal and/or the activities thereon.


 


“Environmental Requirement” shall mean in the singular and
“Environmental Requirements” shall mean in the plural all common law and all
past, present and future laws, statutes, enactments, resolutions, regulations,
rules, directives, ordinances, codes, licenses, permits, orders, memoranda of
understanding and memoranda of agreement, guidances, approvals, plans,
authorizations, concessions, franchises, requirements and similar items of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof, all pollution prevention programs, “best management practices plans”,
and other programs adopted and agreements made by the Port Authority (whether
adopted or made with or without consideration or with or without compulsion),
with any government agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof, and all judicial, administrative, voluntary and regulatory decrees,
judgments, orders and agreements relating to the protection of human health or
the environment, and in the event that there shall be more than one compliance
standard, the standard for any of the foregoing to be that which requires the
lowest level of a Hazardous Substance, the foregoing to include without
limitation:


 


(i)            All
requirements pertaining to reporting, licensing, permitting, investigation and
remediation of emissions, discharges, releases or threatened releases of
Hazardous Substances into the air, surface water, groundwater or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, or the transfer of property
on which Hazardous Substances exist;


 


(ii)           All
requirements pertaining to the protection from Hazardous Substances of the
health and safety of employees or the public;


 


152

















 


(iii)          The
Atomic Energy Act of 1954 , 42 U.S.C. Section 2011 et. seq.; the Clean Water
Act also known as the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et. seq.; the Clean Air Act, 42 U.S.C. Section 7401 et. seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et. seq.; the
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et.  seq.; the
Superfund Amendments and Reauthorization Act of 1986 (“SARA”), Section 2701 et.
seq. ; the Emergency Planning and Community Right to Know Act, 42 U.S.C.
Section 11001 et. seq.;  the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et. seq.;  the Hazardous Materials Transportation Act,
49 U.S.C. Section 5101 et. seq.; the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et. seq.;  the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et. seq.; the Safe Drinking Water Act of 1974, 42
U.S.C. Sections 300f-300h-11 et. seq.; the New York State Environmental
Conservation Law; the New York State Navigation Law; together, in each case,
with any amendment thereto, and the regulations adopted, guidances, memoranda
and publications promulgated thereunder and all substitutions thereof;


 


“Equal Employment Opportunity” or “EEO” shall have the meaning set
forth in Schedule E hereof.


 


“Excess Price” shall have the meaning set forth in Section 68 hereof
entitled “Ground Transportation With the Central Terminal Area”.


 


“Exchange Act” shall mean the Securities Act of 1934.


 


“Exhibit 1.1” shall have the meaning set forth in Section 1 hereof
entitled “Letting”.


 


“Exhibit 49.1” shall have the meaning set forth in Section 49 hereof
entitled “Lessee’s Financial Condition - Limitation of Lease Term - Triggering
Events”.


 


“Existing Tank” and “Existing Tank” shall have the meaning set forth in
Section 61 hereof entitled “Storage Tanks”.


 


“Exit Baseline” shall have the meaning set forth in Section 56 hereof
entitled “Environmental Obligations”.


 


“Expiration Date” shall mean November 30, 2006.


 


“Foreign Currency Exchange Service” shall have the meaning set forth in
Section 78 hereof entitled “Foreign Currency Exchange”.


 


“Gate No. 1” shall have the meaning set forth in Section 1(g) hereof
entitled “Letting”.


 


“Gate No. 1 Commencement Date” shall have the meaning set forth in
Section 1(g) hereof entitled “Letting”.


 


153

















 


“Gate No. 1 Premises” shall have the meaning set forth in Section 1(g)
hereof entitled “Letting”.


 


“Gate No. 1 Rental” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“Gate No. 3” shall have the meaning set forth in Section 1(g) hereof
entitled “Letting”.


 


“Gate No. 3 Commencement Date” shall have the meaning set forth in
Section 1(g) hereof entitled “Letting”.


 


“Gate No. 3 Premises” shall have the meaning set forth in Section 1(g)
hereof entitled “Letting”.


 


“Gate No. 3 Rental” shall have the meaning set forth in Section 4
hereof entitled “Rental”.


 


“General Airport Agreement” shall mean those certain agreements each
entitled “John F. Kennedy International Airport Airline Lease” and dated as of
January 1, 1953 (as the same may have been supplemented, amended and extended)
between the Port Authority and various airlines and which govern the rights,
privileges, duties and obligations of and between the parties thereto with
respect to the Airport.


 


“General Manager of the Airport” shall mean the person or persons from
time to time designated by the Port Authority to exercise the powers and
functions vested in the said General Manager by this Agreement; but until
further notice from the Port Authority to the Lessee it shall mean the General
Manager (or the temporary or acting General Manager) of the Airport for the
time being, or his duly designated representative or representatives.


 


“Governmental Authority”, “Governmental Board” and “Governmental
Agency” shall each mean federal, state, municipal and other governmental
authorities, boards and agencies of any state, nation or government, except
that they shall not be construed to include The Port Authority of New York and
New Jersey, the lessor under this Agreement.


 


“Gross Receipts” shall mean and include all monies paid or payable to
an Operator for sales made and for services rendered at or from the Premises,
and outside the Premises, if the order therefor is received at the Premises,
and any other revenues of any type arising out of or in connection with the
Operator’s operations at the Premises, provided, however, that any taxes or
other governmental charges imposed by law which are separately stated to and
paid by a customer and directly payable to the taxing authority by the
Operator, shall be excluded therefrom.


 


“Ground Carrier Permittees” shall have the meaning set forth in Section
67 hereof entitled “Ground Transportation”.


 


154

















 


“Ground Rental” shall have the meaning set forth in Section 4 hereof
entitled “Rental”.


 


“Ground Transportation Operators” shall have the meaning set forth in
Section 66(a) hereof entitled “Ground Transportation Services”.


 


“Guide” shall have the meaning set forth in Section 43 hereof entitled
“Additional Rights of the Port Authority as to Portions of the Premises”.


 


“Handled Airlines” shall mean any Requesting Airline, Accommodated
Handled Airlines,  Accommodated
Sublessee Airlines and any other Scheduled Aircraft Operators who are operating
at the Airport pursuant to accommodations provided by the Lessee, whether
pursuant to a sublease agreement, Handling Agreement or a combination of both,
which agreement has been consented to by the Port Authority and which consent
remains in full force and effect.


 


“Handling Agreement” shall mean a ground handling or handling
agreement, as such terms are used and understood in the aviation industry, or
any other agreement entered in to between the Lessee and an Aircraft Operator
whereby the Lessee provides the types of services provided by a handling
Aircraft Operator to a handled Aircraft Operator under a ground handling or
handling agreement, it being understood and agreed that the Lessee shall have
no right to enter into a Handling Agreement without the prior written consent
of the Port Authority.


 


“Hazardous Substance” shall mean and include in the singular and
“Hazardous Substances” shall mean and include in the plural any pollutant,
contaminant, toxic or hazardous waste, dangerous substance, noxious substance,
toxic substance, flammable, explosive or radioactive material, urea
formaldehyde foam insulation, asbestos, polychlorinated biphenyls (“PCBs”),
chemicals known to cause cancer, endocrine disruption or reproductive toxicity,
petroleum and petroleum products and other substances which have been or in the
future shall be declared to be hazardous or toxic, or the removal, containment
or restriction of which have been or in the future shall be required, or the
manufacture, preparation, production, generation, use, maintenance, treatment,
storage, transfer, handling or ownership of which have or in the future shall
be restricted, prohibited, regulated or penalized by any federal, state,
county, or municipal or other local statute or law now or at any time hereafter
in effect as amended or supplemented and by the regulations adopted and
publications promulgated pursuant thereto.


 


“Hot Water” shall have the meaning set forth in Section 39(a) hereof
entitled “Hot Water and Chilled Water Requirements”.


 


“Indebtedness” shall have the meaning set forth in Exhibit 49.1 hereof.


 


155

















 


“In-Flight Meals” as used in the air transportation industry and in
this Agreement is a term of art and includes food, beverages, snacks,
non-reusable supplies, materials, dry goods and all services rendered in
connection therewith.


 


“In-Flight Meal Operator” shall have the meaning set forth in Section
72(a)(1) hereof entitled “In-Flight Meals”.


 


“Initial Price” shall have the meaning set forth in Section 68 hereof
entitled “Ground Transportation within the Central Terminal Area”.


 


“Investment Period” shall mean the period commencing on December 1,
2001 and ending on November 30, 2004.


 


“Itinerant Aircraft” shall have the meaning set forth in Section 70
hereof entitled “Itinerant Aircraft”.


 


“KIAC” shall have the meaning set forth in Section 39(a) hereof
entitled “Hot Water and Chilled Water Requirements”.


 


“Lease” shall mean this Agreement of Lease.


 


“Lessee” shall mean JetBlue Airways Corporation, a corporation of the
State of Delaware.


 


“Lessee’s Basic Schedule” shall have the meaning set forth in Section
43 hereof entitled “Additional Rights of the Port Authority as to Portions of
the Premises”.


 


“Lessee’s Basic Schedule for 2002” shall have the meaning set forth in
Section 43 hereof entitled “Additional Rights of the Port Authority as to
Portions of the Premises”.


 


“Lessee’s Commencement Basic Schedule” shall have the meaning set forth
in Section 43 hereof entitled “Addition Rights of the Port Authority as to
Portions of the Premises”.


 


“Lessee’s Personal Property” shall have the meaning set forth in
Section 29 hereof entitled “Removal of Property”.


 


“Lessee’s Tank” and “Lessee’s Tanks” shall have the meaning set forth
in Section 61 hereof entitled “Storage Tanks”.


 


“Local Business Enterprise” or “LBEs” shall have the meaning set forth
in Schedule F attached hereto.


 


“Material Part” shall have the meaning set forth in Section 18 hereof
entitled “Condemnation”.


 


“Meaningful Participation” shall have the meaning set forth in Schedule
E hereof.


 


156

















 


“Measuring Period” shall have the meaning set forth in Section 43
hereof entitled “Additional Rights of the Port Authority as to Portions of the
Premises”.


 


“Metro Area” shall have the meaning set forth in Section 73 hereof
entitled “Consumer Services”.


 


“Minority” shall have the meaning set forth in Schedule E hereof.


 


“Minority Business Enterprise” or “MBE” shall have the meaning set
forth in Schedule E.


 


 “Non-Premises Portion of the
Terminal” shall mean at any particular time that portion of the Terminal that
is not a part of the Premises at such particular time.


 


“Off-Terminal Easement Areas” shall have the meaning set forth in
Section 1(d) hereof entitled “Letting”.


 


“Off-Terminal Utility Service Line Work” shall have the meaning set
forth in Section 2(h) hereof entitled “Construction by the Lessee”.


 


“Operating Terminal Property” shall have the meaning set forth in
Section 29 hereof entitled “Removal of Personal Property”.


 


“Operation and Maintenance Cost” shall have the meaning set forth in
Section 53 hereof entitled “Assumption of Maintenance and Repair of the
Terminal by the Port Authority”.


 


“Operator” shall mean and include each and every Retail Manager,
Restaurant Operator, Newsstand Operator, Currency Exchange Operator, Retail
Bank Operator, Additional Operator, Employee Surface Carrier, Ground Carrier
Permittee, Passenger Surface Carrier, In-flight Meal Operator and any other
Person who conducts any business or operations on or at the Premises and for
which the Port Authority shall impose a fee or rental on the conduct of such
business and operations in accordance with this Lease or the General Airport
Agreement or otherwise.


 


“Other Airline Users” shall have the meaning set forth in Section 83
hereof entitled “Use of Additional Gates by Other Airlines”.


 


“Participants” shall have the meaning set forth in Section 68 hereof
entitled “Ground Transportation Within the Central Terminal Area”.


 


“Passenger Surface Carrier or Carriers” shall have the meaning set
forth in Section 67 hereof entitled “Ground Transportation”.


 


“Period of Underutilization” shall have the meaning set forth in
Section 43 hereof entitled “Additional Rights of the Port Authority as to
Portions of the Premises”.


 


157

















 


 “Person” shall mean not only a
natural person, corporation or other legal entity, but also two or more natural
persons, corporations or other legal entities acting jointly as a firm,
partnership, unincorporated association, consortium, joint adventurers or
otherwise.


 


“Port Authority” shall mean the Port Authority of New York and New
Jersey,  a body corporate and politic,
established by Compact between the States of New Jersey and New York with the
consent of the Congress of the United States of America.


 


“Port of New York District” shall have the meaning set forth in Article
II of the Compact.


 


“Premises” shall mean the land shown in stipple, stipple crosshatching
and stipple diagonal hatching on Exhibit 1.1 at John F. Kennedy International
Airport in the County of Queens, City and State of New York, the aforesaid
land, together with all buildings, structures, fixtures, improvements and other
property of the Port Authority located therein, thereon or thereunder, and all
structures, improvements, additions, buildings, installations and facilities
located, constructed or installed, or which may be located, constructed or
installed therein, thereon or thereunder, and the equipment permanently affixed
or permanently located therein, such as electrical, plumbing, sprinkler, fire
protection and fire alarm, heating, steam, sewage, drainage, refrigerating,
communications, gas and other systems, and their pipes, wires, mains, lines,
tubes, conduits, equipment and fixtures, and all paving, drains, culverts,
ditches and catch-basins constructed therein, thereon or thereunder as of the
Effective Date, provided, however, it is hereby understood and agreed that the
AirTrain, the Cogeneration Facility, the Traffic Systems and the Distribution
Portion of the System are not a part of the Premises and shall not be or become
a part of the Premises and provided, further, however, the Premises shall not
include Gate No. 1 until the Gate No. 1 Commencement Date, if any, and shall
not include Gate No. 3 until the Gate No. 3 Commencement Date, if any.


 


“Public Aircraft Facilities” shall mean the following facilities, as
they may from time to time be provided and maintained by the Port Authority at
the Airport for public and common use, including use by Civil Aircraft
Operators, for the following purposes and which (except as provided in Section
12.12 of the General Airport Agreement) are usable for such purposes regardless
of whether or not they are actually used or usable in whole or in part by the
Lessee:


 


(i)            Public
Aircraft Parking and Storage Area; and


 


(ii)           Public
Ramp and Apron Area; and


 


(iii)          Runways;
and


 


(iv)          Taxiways;
and


 


158

















 


(v)           Facilities
Incidental to the Runways, Ramp and Apron Area, Aircraft Parking and Storage
Area and Taxiways.


 


“Public Aircraft Parking and Storage Space” shall mean areas at the
Airport for public and common use for the purpose of parking and storing
aircraft, for the purpose of servicing aircraft with fuel and lubricants and
other supplies for use thereon, and for the purpose of making minor or
emergency repairs to aircraft.


 


“Public Landing Area” shall mean the area of land at the Airport
including Runways, Taxiways and the areas between and adjacent to Runways and
Taxiways, designated and made available from time to time by the Port Authority
for the landing and taking off of aircraft.


 


“Public Ramp and Apron Area” shall mean the area adjacent to the Public
Landing Area designated and made available from time to time by the Port
Authority for common use for the loading or unloading of passengers or cargo to
or from aircraft using the Public Landing Area.


 


“QF Status” shall have the meaning set forth in Section 39 hereof
entitled “Hot Water and Chilled Water Requirements”.


 


“Reference Month” shall have the meaning set forth in Section 4 hereof
entitled “Rental”.


 


 “Report Date” shall have the
meaning set forth in Section 54 hereof entitled “Joint Periodic Condition
Survey”.


 


“Requesting Airline” shall have the meaning set forth in Section 42
hereof entitled “Requesting Airlines at the Airport”.


 


“Reserved Uses” shall have the meaning set forth in Section 73 hereof
entitled “Consumer Services”.


 


“Resident Engineer” shall mean the person designated as the Resident
Engineer at the Airport by the Chief Engineer of the Port Authority.


 


“Restaurant Operator” shall have the meaning set forth in Section 74
hereof entitled “Restaurant and Bar”.


 


“Retail Bank Operator” shall have the meaning set forth in Section 79
hereof entitled “Retail Banking”.


 


“Retail Bank Service” shall have the meaning set forth in Section 79
hereof entitled “Retail Banking”.


 


“Retail Manager” shall have the meaning set forth in Section 73 hereof
entitled “Consumer Services”.


 


159

















 


“Return Date of the Assumable Maintenance and Repair” shall have the
meaning set forth in Section 53 hereof entitled “Assumption of Maintenance and
Repair of the Terminal by the Port Authority”.


 


“Revenue Seats Daily Average” shall have the meaning set forth in
Section 43 hereof entitled “Additional Rights of the Port Authority as to
Portions of the Premises”.


 


“RPM” shall have the meaning set forth in Section 49 hereof entitled
“Lessee’s Financial Condition - Limitation of Lease Term - Triggering Events”.


 


“Runways” (including approaches thereto) shall mean the portion of the
Airport used for the purpose of the landing and taking-off of aircraft.


 


“Scheduled Aircraft Operator” shall mean a Civil Aircraft Operator
engaged in transportation by aircraft operated wholly or in part on regular
flights to and from the Airport in accordance with published schedules; but so
long as the Federal Aviation Act of 1958, or any similar federal statute
providing for the issuance of Foreign Air Carrier Permits or Certificates of
Public Convenience and Necessity or substantially similar permits or
certificates, is in effect, no Person shall be deemed to be a Scheduled
Aircraft Operator within the meaning of this Agreement unless it also holds
such a permit or certificate.


 


“Specified Amount” shall have the meaning set forth in Exhibit 49.1
hereof.


 


“Street Prices” shall have the meaning set forth in Section 73 hereof
entitled “Consumer Services”.


 


“Street Pricing” shall have the meaning set forth in Section 73 hereof
entitled “Consumer Services”.


 


“Submissions” shall have the meaning set forth in Section 68 hereof
entitled “Ground Transportation Within the Central Terminal Area”.


 


“Subsidiary” shall mean any corporation or other Person of which
securities or other interests having the power to elect a majority of the
corporation’s or other Person’s board of directors or similar governing body,
or otherwise having the power to direct the business and policies of that
corporation or other Person, are held by the Lessee or one or more of its
Subsidiaries.


 


“Taking” shall have the meaning set forth in Section 18 hereof entitled
“Condemnation”.


 


“Taxi Dispatcher Period” shall have the meaning set forth in Section 46
hereof entitled “Restrictions on Use of Passenger Terminal Frontage Roadways -
Use of Airport Taxi Dispatchers and Roadway Frontage Management”.


 


160

















 


“Taxiways” shall mean the portion of the Airport used for the purpose
of the ground movement of aircraft to, from and between the Runways, the Public
Ramp and Apron Area, the Public Aircraft Parking and Storage Area and other
portions of the Airport (not including, however, any taxiways, the exclusive
use of which is granted to the Lessee or any other Person by lease, permit or
otherwise).


 


“Terminal” and “Terminal 6” shall collectively mean the Premises, Gate
No. 1 and Gate No. 3.


 


“TDS” shall have the meaning set forth in Section 39 hereof entitled
“Hot Water and Chilled Water Requirements”.


 


“Total Revenue Seats” shall have the meaning set forth in Section 43
hereof entitled “Additional Rights of the Port Authority as to Portions of the
Premises”.


 


“Traffic Systems” shall have the meaning set forth in Section 10 hereof
entitled “Care, Maintenance, Rebuilding and Repair by the Lessee”.


 


“Triggering Event” and “Triggering Events” shall have the meaning set
forth in Exhibit 49.1 hereof.


 


 


“United” shall mean United Air Lines, Inc., a corporation of the State
of Delaware.


 


“Voting Security” or “Voting Securities” shall include any stock, bond
or other obligation of a corporation the holder of which has any voting rights
including but not limited to the right to vote for the election of members of
the board of directors of said corporation and shall include any security
convertible into a Voting Security and any right, option or warrant to purchase
a Voting Security.


 


“Women-owned Business Enterprise” or “WBE” shall have the meaning set
forth in Schedule E.


 


Section 85.             Entire Agreement


 


This Agreement consists of the following: Sections 1 through 85
inclusive of this Agreement of Lease and Exhibits 1.1, 1.2, 49.1, 56.1 and S
and Schedule E and Schedule F attached hereto. 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


 


161

















 


unless expressed in writing in this Agreement.


 


IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed as of the Effective Date.


 


 


	
  ATTEST:

  	
  THE PORT AUTHORITY OF NEW YORK

  AND NEW JERSEY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Francis A. Dimola

  
	
  /s/ Karen E. Eastman

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  (Title)

  	
  Assistant Director

  
	
   

  	
  (Seal)

  
	
   

  	
   

  	
  Aviation Dept.

  
	
   

  	
   

  
	
  ATTEST:

  	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ James G. Hnat

  	
   

  	
  By

  	
  /s/ Dave Barger

  
	
  Assistant Secretary / Vice President

  	
   

  	
   

  
	
   

  	
  General Counsel

  	
  (Title)

  	
  President

  	
   

  
	
   

  	
  Corporate Seal)

  
								



 


 


162

















EXHIBIT 49.1


 


TRIGGERING EVENTS


 


The following are the Triggering Events applicable to the provisions of
Sections 49 of the Lease to which this Exhibit 49.1 is attached between the
Lessee and the Port Authority:


 


I.              Exhibit
49.1 Definitions:


 


(1)           All
accounting terms used in this Exhibit and not otherwise defined herein shall
have the meanings usually given such terms, in accordance with United States
generally accepted accounting principles.


 


(2)           As
used herein the terms “Debt”, “Indebtedness” and “Debt Financings” shall mean
for the purposes of this Exhibit, at any date (i) all obligations of the Lessee
evidenced by loan agreement(s), bonds, debentures, notes or other similar
instruments or for borrowed money; (ii) all equipment trust certificates, equipment
trust indentures, mortgages, conditional sales or other security agreements, or
other similar agreements, and (iii) all capital lease obligations of the
Lessee.


 


II.            Triggering
Events:


 


(1)           A
Triggering Event shall occur when the Lessee shall fail to make payment as
provided for in two or more of the categories listed below.  Furthermore, such Triggering Event shall not
have occurred unless the Port Authority shall have notified the Lessee that
such Triggering Event shall be effective on a date thirty (30) days following
the date of such notice unless all payments due from the Lessee pursuant to
such categories listed below and specified in such notice have been received by
the Port Authority:


 


(i)            Payment
of monthly installments of rental shall be made to the Port Authority on the
first day of each calendar month;


 


(ii)           Payment
of all sums, including, without limitation, flight fees and fuel gallonage fees
under the Lessee’s General Airport Agreement, or otherwise, shall be made to
the Port Authority on or before the twentieth day of the following calendar
month;





163

















 


(iii)          Payment
of all sums due to the Port Authority under this Agreement or otherwise, and
outstanding for more than thirty (30) days, appearing on a Statement of Account
rendered by the Port Authority to the Lessee.


 


No provision of this paragraph (1) shall be deemed to affect or limit
the right of the Port Authority to terminate the Lease pursuant to Section 20
(a) (9) thereof for failure to make such payments when due under the Lease.


 


(2)           The
Lessee expressly represents and warrants to the Port Authority that, as of the
“Effective Date” as defined in the Lease, the Lessee has multiple publicly or
non-publicly held Debt Financings each in excess of Five Million Dollars and No
Cents ($5,000,000.00) which include events of default which could lead to
acceleration thereof.


 


(3)           A
Triggering Event shall occur if any of the following shall occur and the Port
Authority shall have previously given or shall thereafter during the pendency
thereof give the Lessee notice of the election of the Port Authority to
activate such Triggering Event:


 


(a)           as
a result of a default by the Lessee, other than a default arising due to
compliance by the Lessee with any applicable law or directive or (provided that
the Lessee has satisfied the Port Authority that it is reasonable to comply
therewith) with any requirement, whether having the force of law or not, of any
government or regulatory authority to which the Lessee is subject, unless such
default results in the Lessee becoming bound to repay prematurely any of its
Indebtedness for borrowed moneys as described in (i) below (not being that in
respect of which the default has occurred) and steps are taken to obtain
repayment thereof:


 


(i)            the
Lessee becomes bound to repay prematurely any of its Indebtedness for borrowed
moneys having an outstanding aggregate principal amount of at least Five
Million Dollars and No Cents ($5,000,000.00) or its equivalent in any other
currency or currencies (hereinafter in this paragraph (a)(i) called the
“Specified Amount”) and steps are taken to obtain repayment thereof; or


 


(ii)           any
such Indebtedness having an outstanding aggregate principal amount of at least
the Specified Amount or any guarantee or indemnity of the Lessee of any
Indebtedness of any Person for borrowed moneys having an outstanding aggregate
principal amount of at least the Specified Amount is not, when due, paid by the
latest of its due date, the expiry of any applicable grace period and (if
payment is prevented by any applicable law) fifteen (15) days after the first
date on which payment is permitted,


 


provided that any such acceleration of maturity, default or failure to
pay in subdivision II (3)(a)(i) and/or II (3)(a)(ii) above, as the case may be,
shall not constitute a Triggering Event so long as the Lessee satisfies the
Port Authority that it is being contested in good faith by the Lessee or as
long as the Lessee demonstrates to the Port Authority that such


 


164

















 


event of default and
acceleration of Debt has arisen from events other than those which would
signify a deterioration in the Lessee’s financial position or an inability to
meet its financial obligations under such Debt; or


 


(b)           a
creditor takes possession or an administrative or other receiver is appointed
of the whole or a substantial part of the assets of the Lessee and such taking
of possession or appointment is not released, discharged or canceled within 60
days; or


 


(c)           a
distress, execution or seizure before judgment is levied or enforced upon or
sued out against a substantial part of the assets of the Lessee and is not
discharged, dismissed or stayed within 60 days thereof; or


 


(d)           the
Lessee stops payment generally or is unable to pay its Debts generally as and
when they fall due or (otherwise than for the purposes of a solvent
reconstruction, amalgamation or merger the terms of which have previously been
approved in writing by the Port Authority) or ceases or threatens to cease to
carry on all or substantially all of its business; or


 


(e)           the
Lessee makes an assignment for the benefit or creditors generally or admits in
writing its inability to pay its Debts generally as they become due or takes
corporate action in furtherance of any such action.


 


III.           Modification
Requested by Lessee:


 


The Lessee may deliver a notice to the Port Authority requesting that
one or more of the Triggering Events contained in this Exhibit 49.1 be
modified.  The Lessee shall include as
part of such notice the text of the modification.  If the Executive Director of the Port Authority, with the
approval of the Chairman of the Committee on Finance of the Board of the
Commissioners of the Port Authority, shall countersign such modification, or an
amended version of the modification that is acceptable to the Lessee, such
notice, duly signed by both the Lessee and the Executive Director of the Port
Authority, shall be a valid and binding modification of the Triggering Events.


 


 


	
   

  	
  /s/ N.W.H.

  	
   

  
	
   

  	
  For the Port Authority

  
	
   

  	
   

  
	
  Initialed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dave Barger

  	
   

  
	
   

  	
  For the Lessee

  



 


165

















 


SCHEDULE E


 


AFFIRMATIVE ACTION-EQUAL OPPORTUNITY—MINORITY
BUSINESS


ENTERPRISES —WOMEN-OWNED BUSINESS ENTERPRISES
REQUIREMENTS


 


 


PART I.                  Affirmative
Action Guidelines - Equal Employment Opportunity


 


I.              As
a matter of policy the Port Authority hereby requires the Lessee and the Lessee
shall require the Contractor, as hereinafter defined, to comply with the provisions
set forth hereinafter in this Schedule E and in Section 2 (c) (18) of the Lease
to which this Schedule is attached.  The
provisions set forth in this Part I are similar to the conditions for bidding
on federal government contract adopted by the Office of Federal Contract
Compliance and effective May 8, 1978.


 


The Lessee as well as each bidder, contractor and subcontractor of the
Lessee and each subcontractor of a contractor at any tier of construction
(herein collectively referred to as the “Contractor”) must fully comply with
the following conditions set forth herein as to each construction trade to be
used on the construction work or any portion thereof (said conditions being
herein called “Bid Conditions”).  The
Lessee hereby commits itself to the goals for minority and female utilization
set forth below and all other requirements, terms and conditions of the Bid
Conditions.  The Lessee shall likewise
require the Contractor to commit itself to the said goals for minority and
female utilization set forth below and all other requirements, terms and
conditions of the Bid Conditions by submitting a properly signed bid.


 


II.            The
Lessee and the Contractor shall each appoint an executive of its company to
assume the responsibility for the implementation of the requirements, terms and
conditions of the following Bid Conditions:


 


(a)           The
goals for minority and female participation expressed in percentage terms for
the Contractor’s aggregate workforce in each trade on all construction work are
as follows:


 


	
   

  	
  (1)

  	
  Minority participation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Minority, except laborers

  	
   

  	
  30

  	
  %

  
	
   

  	
   

  	
  Minority, laborers

  	
   

  	
  40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  Female participation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Female, except laborers

  	
   

  	
  6.9

  	
  %

  
	
   

  	
   

  	
  Female, laborers

  	
   

  	
  6.9

  	
  %

  



 


These goals are applicable to all the Contractor’s construction work
performed in and for the Terminal.


 


1

















 


The Contractor’s specific affirmative action obligations required
herein of minority and female employment and training must be substantially
uniform throughout the length of the contract, and in each trade, and the
Contractor shall make good faith efforts to employ minorities and women evenly
on each of its projects.  The transfer
of minority or female employees or trainees from contractor to contractor or from
project to project for the sole purpose of meeting the Contractor’s goals shall
be a violation of the contract. 
Compliance with the goals will be measured against the total work hours
performed.


 


(b)           The
Contractor shall provide written notification to the Lessee and the Lessee
shall provide written notification to the Port Authority’s Aviation Department
and Office of Business and Job Opportunity within fifteen (15) days of award of
any construction subcontract in excess of $10,000 at any tier for construction
work.  The notification shall list the
name, address and telephone number of the subcontractor; employer
identification number; estimated starting and completion dates of the
subcontract; and the geographical area in which the subcontract is to be
performed.


 


(c)           As
used in these specifications:


 


(1)           “Employer
identification number” means the Federal Social Security number used on the
Employer’s Quarterly Federal Tax Return, U.S. Treasury Department Form 941:


 


(2)           “Minority”
includes:


 


(i)            Black
(all persons having origins in any of the Black African racial groups not of
Hispanic origin);


 


(ii)           Hispanic
(all persons of Mexican, Puerto Rican, Dominican, Cuban, Central or South
American culture or origin, regardless of race);


 


(iii)          Asian
and Pacific Islander (all persons having origins in any of the original peoples
of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific
Islands); and


 


(iv)          American
Indian or Alaskan Native (all persons having origins in any of the original
peoples of North America and maintaining identifiable tribal affiliations
through membership and participation or community identification).


 


(d)           Whenever
the Contractor, or any subcontractor at any tier, subcontracts a portion of the
construction work involving any construction trade, it shall physically include
in each subcontract in excess of $10,000 those provisions which include the
applicable goals for minority and female participation.


 


2

















 


(e)           The
Contractor shall implement the specific affirmative action standards provided
in subparagraphs (1) through (16) of Paragraph (h) hereof.  The goals set forth above are expressed as
percentages of the total hours of employment and training of minority and
female utilization the Contractor should reasonably be able to achieve in each
construction trade in which it has employees in the Terminal.  The Contractor is expected to make
substantially uniform progress toward its goals in each craft during the period
specified.


 


(f)            Neither
the provisions of any collective bargaining agreement, nor the failure by a
union with whom the Contractor has a collective bargaining agreement, to refer
either minorities or women shall excuse the Contractor’s obligations hereunder.


 


(g)           In
order for the nonworking training hours of apprentices and trainees to be
counted in meeting the goals, such apprentices and trainees must be employed by
the Contractor during the training period, and the Contractor must have made a
commitment to employ the apprentices and trainees at the completion of their
training subject to the availability of employment opportunities.  Trainees must be trained pursuant to
training programs approved by the U.S. Department of Labor.


 


(h)           The
Contractor shall take specific affirmative actions to ensure equal employment
opportunity (“EEO”).


 


The evaluation of the Contractor’s compliance with these provisions
shall be based upon its good faith efforts to achieve maximum results from its
actions.  The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as the following:


 


(1)           Ensure
and maintain a working environment free of harassment, intimidation, and
coercion at all sites, and in all facilities at which the Contractor’s
employees are assigned to work.  The
Contractor, where possible, will assign two or more women to each phase of the
construction project.  The Contractor,
shall specifically ensure that all foremen, superintendents, and other
supervisory personnel at the Terminal are aware of and carry out the
Contractor’s obligation to maintain such a working environment, with specific
attention to minority or female individuals working at the Terminal.


 


(2)           Establish
and maintain a current list of minority and female recruitment sources, provide
written notification to minority and female recruitment sources and to
community organizations when the Contractor or its unions have employment
opportunities available, and maintain a record of the organizations’ responses.


 


(3)           Maintain
a current file of the names, addresses and telephone numbers of each minority
and female off-the-street applicant and minority or female


 


3

















 


referral from a union, a
recruitment source or community organization and of what action was taken with
respect to each such individual.  If
such individual was sent to the union hiring hall for referral and was not
referred back to the Contractor by the union or, if referred, not employed by
the Contractor, this shall be documented in the file with the reason therefor,
along with whatever additional actions the Contractor may have taken.


 


(4)           Provide
immediate written notification to the Lessee when the union or unions with
which the Contractor has a collective bargaining agreement has not referred to
the Contractor a minority person or woman sent by the Contractor, or when the
Contractor has other information that the union referral process has impeded
the Contractor’s efforts to meet its obligations.


 


(5)           Develop
on-the-job training opportunities and/or participate in training programs for
the area which expressly include minorities and women, including upgrading
programs and apprenticeship and training programs relevant to the Contractor’s
employment needs, especially those programs funded or approved by the
Department of Labor.  The Contractor
shall provide notice of these programs to the sources compiled under
subparagraph (2) above.


 


(6)           Disseminate
the Contractor’s EEO Policy by providing notice of the policy to unions and
training programs and requesting their cooperation in assisting the Contractor
in meeting its EEO obligations; by including it in any policy manual and
collective bargaining agreement; by publicizing it in the Contractor’s
newspaper, annual report, etc.; by specific review of the policy with all
management personnel and with all minority and female employees at least once a
year; and by posting the Contractor’s EEO policy on bulletin boards accessible
to all employees at each location where construction work is performed.


 


(7)           Review,
at least every six months the Contractor’s EEO policy and affirmative action
obligations hereunder with all employees having any responsibility for hiring,
assignment, layoff, termination or other employment decision including specific
review of these items with on-premises supervisory personnel such as
Superintendents, General Foremen, etc., prior to the initiation of construction
work at the Terminal.  A written record
shall be made and maintained identifying the time and place of these meetings,
persons attending, subject matter discussed, and disposition of the subject
matter.


 


(8)           Disseminate
the Contractor’s EEO policy externally by including it in any advertising in
the news media, specifically including minority and female news media, and
providing written notification to and discussing the Contractor’s EEO policy
with other Contractors and Subcontractors with whom the Contractor does or
anticipates doing business.


 


(9)           Direct
its recruitment efforts, both oral and written, to minority, female and
community organizations, to schools with minority and female students and to
minority and female recruitment and training organizations and to
State-certified 


 


4

















 


minority referral agencies
serving the Contractor’s recruitment area and employment needs.  Not later than one month prior to the date
for the acceptance of applications for apprenticeship or other training by any
recruitment source, the Contractor shall send written notification to
organizations such as the above, describing the openings, screening procedures,
and tests to be used in the selection process.


 


(10)         Encourage
present minority and female employees to recruit other minority persons and
women and, where reasonable, provide after school, summer and vacation
employment to minority and female youth both on the Terminal and in areas of a
Contractor’s workforce.


 


(11)         Tests
and other selecting requirements shall comply with 41 CFR Part 60-3.


 


(12)         Conduct,
at least every six months, an inventory and evaluation of all minority and
female personnel for promotional opportunities and encourage these employees to
seek or to prepare for, through appropriate training, etc., such opportunities.


 


(13)         Ensure
that seniority practices, job classifications, work assignments and other
personnel practices, do not have a discriminatory effect by continually
monitoring all personnel and employment related activities to ensure that the
EEO policy and the Contractor’s obligations hereunder are being carried out.


 


(14)         Ensure
that all facilities and company activities are non-segregated except that
separate or single-user toilet and necessary changing facilities shall be
provided to assure privacy between the sexes.


 


(15)         Document
and maintain a record of all solicitations of offers for subcontracts from
minority and female construction contractors and suppliers, including
circulation of solicitations to minority and female contractor associations and
other business associations.


 


(16)         Conduct
a review, at least every six months, of all supervisors’ adherence to and
performance under the Contractors’ EEO policies and affirmative action
obligations.


 


(i)            Contractors
are encouraged to participate in voluntary associations which assist in
fulfilling one or more of their affirmative action obligations (subparagraphs
(1)-(16) of Paragraph (h) above).  The
efforts of a contractor association, joint contractor-union,
contractor-community, or other similar group of which the Contractor is a
member and participant, may be asserted as fulfilling any one or more of its
obligations under Paragraph (h) hereof provided that: the Contractor actively
participates in the group, makes good faith efforts to assure that the group
has a positive impact on the employment of minorities and women in the
industry, ensures that the concrete benefits of the program are reflected in
the Contractor’s minority and female workforce participation, makes good faith
efforts to meet its individual goals and


 


5

















 


timetables, and can provide
access to documentation which demonstrates the effectiveness of actions taken
on behalf of the Contractor.  The
obligation to comply, however, is the Contractor’s and failure of such a group
to fulfill an obligation shall not be a defense for the Contractor’s
non-compliance.


 


(j)            A
single goal for minorities and a separate single goal for women have been
established.  The Contractor, however,
is required to provide equal opportunity and to take affirmative action for all
minority groups, both male and female, and all women, both minority and
non-minority.  Consequently, the
Contractor may be in violation hereof if a particular group is employed in a
substantially disparate manner (for example, even though the Contractor has
achieved its goals for women generally, the Contractor may be in violation
hereof if a specific minority group of women is underutilized).


 


(k)           The
Contractor shall not use the goals and timetables or affirmative action
standards to discriminate against any person because of race, color, religion,
sex or national origin.


 


(l)            The
Contractor shall not enter into any subcontract with any Person or firm
debarred from Government contracts pursuant to Executive Order 11246.


 


(m)          The
Contractor shall carry out such sanctions and penalties for violation of this
clause including suspension, termination and cancellation of existing
subcontracts as may be imposed or ordered by the Lessee.  Any Contractor who fails to carry out such
sanctions and penalties shall be in violation hereof.


 


(n)           The
Contractor, in fulfilling its obligations hereunder shall implement specific
affirmative actions steps, at least as extensive as those standards prescribed
in paragraph (h) hereof so as to achieve maximum results from its efforts to
ensure equal employment opportunity.  If
the Contractor fails to comply with the requirements of these provisions, the
Lessee shall proceed accordingly.


 


(o)           The
Contractor shall designate a responsible official to monitor all employment
related activity to ensure that the company EEO policy is being carried out, to
submit reports relating to the provisions hereof as may be required and to keep
records.  Records shall at least include
for each employee the name, address, telephone numbers, construction trade,
union affiliation if any, employee identification number when assigned, social
security number, race, sex, status (e.g. mechanical apprentice, trainee,
helper, or laborer), dates of changes in status, hours worked per week in the
indicated trade, rate of pay, and location at which the work is performed.  Records shall be maintained in an easily
understandable and retrievable form; however, to the degree that existing
records satisfy this requirement, contractors shall not be required to maintain
separate records.


 


6

















 


(p)           Nothing
herein provided shall be construed as a limitation upon the application of any
laws which establish different standards of compliance or upon the application
of requirements for the hiring of local or other area residents (e.g., those
under the Public Works Employment Act of 1977 and the Community Development
Block Grant Program).


 


(q)           Without
limiting any other obligation, term or provision under the Lease, the
Contractor shall cooperate with all federal, state or local agencies
established for the purpose of implementing affirmative action compliance
programs and shall comply with all procedures and guidelines established or
which may be established by the Port Authority.


 


PART II.                              MINORITY
BUSINESS ENTERPRISES AND WOMEN-OWNED BUSINESS ENTERPRISES


 


As a matter of policy the Port Authority requires the Lessee and the
Lessee shall itself and shall require the general contractor or other
construction supervisor and each of the Lessee’s contractors to use every good
faith effort to provide for meaningful participation by Minority Business
Enterprises (MBEs) and Women-owned Business Enterprises (WBEs) in the
construction work that is being performed in connection with the Terminal
pursuant to the provisions of this Schedule E. 
For purposes hereof, “Minority Business Enterprise” “(MBE)” shall mean
any business enterprise which is at least fifty-one percentum owned by, or in
the case of a publicly owned business, at least fifty-one percentum of the
stock of which is owned by citizens or permanent resident aliens who are
minorities and such ownership is real, substantial and continuing.  For the purposes hereof, “Women-owned
Business Enterprise” “(WBE)” shall mean any business enterprise which is at
least fifty-one percentum owned by, or in the case of a publicly owned
business, at least fifty-one percentum of the stock of which is owned by women
and such ownership is real, substantial and continuing.  A minority shall be as defined in paragraph
II(c) of Part I of this Schedule E. 
“Meaningful participation” shall mean that at least seventeen percent
(17%) of the total dollar value of the construction contracts (including
subcontracts) covering the construction work are for the participation of
Minority Business Enterprises and Women-owned Business Enterprises, of which at
least twelve percent (12%) are for the participation of Minority Business
Enterprises.  Good faith efforts to
include meaningful participation by MBEs and WBEs shall include at least the
following:


 


(a)           Dividing
the work to be subcontracted into smaller portions where feasible.


 


(b)           Actively
and affirmatively soliciting bids for subcontracts from MBEs and WBEs,
including circulation of solicitations to minority and female contractor
associations.  The Contractor shall
maintain records detailing the efforts made to provide for meaningful MBE and
WBE participation in the work, including the names and addresses of all MBEs
and WBEs contacted and, if any such MBE or WBE is not selected as a joint
venturer or subcontractor, the reason for such decision.


 


7

















 


(c)           Making
plans and specifications for prospective construction work available to MBEs
and WBEs in sufficient time for review.


 


(d)           Utilizing
the list of eligible MBEs and WBEs maintained by the Port Authority or seeking
minorities and women from other sources for the purpose of soliciting bids for
subcontractors.


 


(e)           Encouraging
the formation of joint ventures, partnerships or other similar arrangements
among subcontractors, where appropriate, to insure that the Lessee and
Contractor will meet their obligations hereunder.


 


(f)            Insuring
that provision is made to provide progress payments to MBEs and WBEs on a
timely basis, preferably bi-weekly, and that retainage is paid to MBEs and WBEs
when they have completed their work.


 


(g)           Not
requiring bonds from and/or providing bonds and insurance for MBEs and WBEs,
where appropriate.


 


(h)           Requiring
each contractor to submit to the Lessee with each payment request evidence that
all MBE and WBE Contractors have been paid in accordance with their contract.


 


Certification of MBEs and WBEs hereunder shall be made by the Office of
Business and Job Opportunity of the Port Authority.  If the Contractor wishes to utilize a firm not already certified
by the Port Authority, it shall submit to the Port Authority a written request
for a determination that the proposed firm is eligible for certification.  This shall be done by completing and
forwarding such form as may be then required by the Port Authority.  All such requests shall be in writing
addressed to the Office of Business and Job Opportunity, the Port Authority of
New York and New Jersey, One Riverfront Plaza, 9th Floor, Newark,
New Jersey 07102 or such other address as the Port Authority may specify by
notice to the Lessee.  Certification
shall be effective only if made in writing by the Director in charge of the
Office of Business and Job Opportunity of the Port Authority.  The determination of the Port Authority
shall be final and binding.


 


The Port Authority has compiled a list of the firms that the Port
Authority has determined satisfy the criteria for MBE and WBE certification.
This list may be supplemented and revised from time to time by the Port
Authority.  Such list shall be made
available to the Contractor upon request. 
The Port Authority makes no representation as the financial
responsibility of such firms, their technical competence to perform, or any
other performance-related qualifications.


 


Only MBE’s and WBE’s certified by the Port Authority will count toward
the MBE and WBE goals.


 


8

















 


Please note that only sixty percent (60%) of expenditures to MBE or WBE
suppliers will count towards meeting the MBE and WBE goals.  However, expenditures to MBE or WBE
manufacturer’s (i.e. suppliers that produce goods from raw materials or
substantially alter them before resale) are counted dollar for dollar.


 


	
   

  	
  /s/ N.W.H.

  	
   

  
	
   

  	
  For the Port Authority

  
	
   

  	
   

  
	
  Initialed:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dave Barger

  	
   

  
	
   

  	
  For the Lessee

  
				



 


9

















 


SCHEDULE F


LOCAL BUSINESS ENTERPRISES COMMITMENT


 


As a matter of policy the Port Authority hereby requires the Lessee and
the Lessee shall require any Contractor utilized by the Lessee to perform
construction work on the Terminal to comply with the provisions set forth
hereinafter in this Schedule F.


 


(1)           The
Lessee and each Contractor shall use every good faith effort to maximize the
participation of Local Business Enterprises (LBEs) in all construction work on
the Terminal, including without limitation the Construction Work.  In order to assure familiarity with the
services and materials provided by LBEs, the Contractor shall attend such
meetings as may be called by the General Manager of the Airport on LBEs and
shall contact the Queens Air Services Development Office (ASDO), located at
John F. Kennedy International Airport, Bldg. 80, First Floor, South Service
Court, Jamaica, NY 11430 to obtain LBE Vendor Profiles and access ASDO’s
on-line vendor retrieval system (BASIS). 
The Port Authority has not checked the references, capabilities or
financial background of the LBEs registered with the ASDO, but is referring the
Contractor to the ASDO and BASIS solely for the purpose of advising Contractors
of LBDs who may be interested in providing services and/or materials to the
Contractor.


 


(2)           Good
faith efforts to include participation by LBEs in construction work shall
include at least the following:


 


(i)            Dividing
the work to be subcontracted and services and materials to be procured into
small portions, where feasible


 


(ii)           Soliciting
bids on portions of the work to be subcontracted and services and materials to
be procured from LBE’s registered with ASDO and such other LBEs as the
Contractor deems appropriate.


 


(3)           The
Port Authority is committed to making employment opportunities available to
local residents and expects that the Contractor will utilized LBEs.


 


(4)           It
is specifically understood and agreed that the requirements set forth herein
for the participation of LBEs shall not alter, limit, diminish or modify any of
the obligations under this Lease including, without limitation, the obligation
to put into


 

















 


effect the affirmative action program and the MBE and WBE programs in
accordance with the provisions set forth above in Schedule E hereof.


 


	
   

  	
  /s/ N.W.H.

  	
   

  
	
   

  	
  For the Port Authority

  
	
   

  	
   

  
	
  Initialed:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dave Barger

  	
   

  
	
   

  	
  For the Lessee

  
				



 

















 


For the Port Authority


 


 


	
  STATE OF NEW
  YORK

  	
  )

  
	
   

  	
  ) ss

  
	
  COUNTY OF NEW YORK

  	
  )

  



 


On the 27th day of February in the year 2004, before me, the
undersigned, a Notary Public in and for said state, personally appeared Francis
A. Dimola, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he/she executed the same in his/her capacity, and
that by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.


 


 


	
   

  	
           /s/ Peggy M.
  Spinelli

  	
   

  
	
   

  	
  (notarial seal and stamp)

  
	
   

  	
   

  
	
   

  	
   

  	
  PEGGY M. SPINELLI

  
	
   

  	
   

  	
  Notary Public, State of New York

  
	
  For the Lessee

  	
   

  	
  No. 01SP605/870

  
	
   

  	
   

  	
  Qualified in New York County

  
	
   

  	
   

  	
  Commission Express April 30, 2004

  
				



 


 


	
  STATE
  OF  NY

  	
  )

  
	
   

  	
  ) ss

  
	
  COUNTY OF Queens

  	
  )

  



 


On the 27 day of August in the year 2003, before me, the undersigned, a
Notary Public in and for said state, personally appeared Dave Barger,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.


 


 


	
   

  	
  (notarial seal and stamp)

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Carlos Soto

  	
   

  
	
   

  	
  CARLOS SOTO

  	
   

  
	
   

  	
  Notary Public, State of New York

  	
   

  
	
   

  	
  Registration #01SOB051311

  	
   

  
	
   

  	
  Qualified in New York County

  	
   

  
	
   

  	
  My Commission Expires Nov. 20, 2004

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8/27/2003