Document:

EX-10.50

 

EXHIBIT 10.50

FIFTH AMENDMENT TO LEASE

     AGREEMENT, dated as of the 20th day of December, 2006, between 120 BROADWAY
HOLDINGS, LLC, a Delaware limited liability company, having an office at 7 World Trade Center,
250 Greenwich Street, New York, New York 10007 (“Landlord”), and TOWER GROUP, INC., a
Delaware corporation, having an office at 120 Broadway, New York, New York 10271 (“Tenant”).

STATEMENT OF FACTS

     By Lease dated as of February 19, 1997 (the “Original Lease”), by and between Broadpine Realty
Holding Company, Inc. (“BRHC”) (as predecessor-in-interest to Landlord) and Tower Insurance Company
of New York (“TICNY”), BRHC leased to TICNY and TICNY hired from BRHC certain premises in the
building known as 120 Broadway, New York, New York (the “Building”), consisting of a portion of the
fourteenth (14th) floor of the Building, for a term ending on May 31, 2008. By
Modification of Indenture of Lease dated as of May (no day), 1998 (the “First Amendment”), TICNY
leased the balance of the rentable area of the fourteenth (14th) floor (the “Fourteenth Floor
Premises”) in the Building. By the Second Amendment to Lease dated as of January 15, 2003 (the
“Second Amendment”), TICNY leased a portion of the seventeenth (17th) floor (the
“Seventeenth Floor Premises”) of the Building. By the Third Amendment to Lease dated as of
September 1, 2005 (the “Third Amendment”), TICNY leased a portion of the thirtieth
(30th) floor and the entire thirty-first (31st) floor of the Building,
surrendered the Fourteenth Floor Premises and the Seventeenth Floor Premises, and extended the term
of the Lease to June 30, 2021. By Assignment of Lease dated as of June 30, 2006 (the “Assignment
Agreement”), TICNY assigned all of its right, title and interest as tenant under the Lease to Tower
Group, Inc. By the Fourth Amendment to Lease dated as of July 25, 2006 (the “Fourth Amendment”),
Tenant leased an additional portion on the 30th floor of the Building

     The Original Lease, the First Amendment, the Second Amendment, the Third Amendment, the
Assignment Agreement, the Fifth Amendment and any and all other amendments and modifications
thereof shall hereinafter be collectively referred to as the “Lease”. Landlord and Tenant now
desire to further amend the Lease upon the terms hereinafter contained.

     NOW, THEREFORE, in consideration of the Lease and the mutual covenants herein contained,
Landlord and Tenant hereby agree as follows:

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1. DEFINED TERMS:

     Unless the context otherwise clearly indicates a contrary intent or unless specifically
otherwise provided herein, each term used in this Agreement which is defined in the Lease shall be
deemed to have the meaning ascribed to such term in the Lease.

2. FIFTH PREMISES:

     A. For the purposes of this Agreement, the term “Fifth Premises” shall mean that certain
portion of the twenty-ninth (29th) floor of the Building as approximately indicated by
hatched markings on the rental plan annexed hereto as Exhibit “A” and made a part hereof; and

     B. Effective throughout the period (the “Fifth Premises Term”) commencing on January 1, 2007
(the “Fifth Premises Commencement Date”) and ending on December 31, 2011 (the “Fifth Premises
Expiration Date”), both dates inclusive:

          (i) the Lease shall be amended by adding the Fifth Premises to the Demised Premises; and

          (ii) Landlord leases to Tenant and Tenant hires from Landlord the Fifth Premises, and Tenant’s
use and occupy of the Fifth Premises and its obligations with respect thereto shall be in
accordance with the terms, provisions, conditions and agreements contained in the Lease, except as
otherwise expressly provided in this Agreement.

3. DELIVERY OF POSSESSION OF FIFTH PREMISES:

     If Landlord is unable to give possession of the entire Fifth Premises to Tenant on the Fifth
Premises Commencement Date because of any reason beyond Landlord’s reasonable control, (i) Landlord
shall not be subject to any liability for failure to give possession on said date, (ii) the
validity of this Agreement and the Lease shall not be impaired under such circumstances, (iii) the
same shall not be construed in any way to extend the Fifth Premises Term or the Term of the Lease,
and (iv) the Fifth Premises Commencement Date shall be deemed extended until the date on which
Landlord shall have tendered delivery of possession thereof to Tenant. The provisions of this
Paragraph are intended to constitute “an express provision to the contrary” within the meaning of
Section 223-a of the New York Real Property Law.

4. AS-IS POSSESSION; TENANT’S FIFTH PREMISES WORK:

     A. Tenant acknowledges that it has fully inspected the Fifth Premises and agrees to accept
possession thereof in its then “as-is” condition on the Fifth Premises Commencement Date, it being
understood and agreed that Landlord shall not be obligated to make any improvements, alteration or
repairs to the Fifth Premises, except that Landlord agrees to place the existing air conditioning
unit servicing the Fifth Premises in good working order on the Fifth Premises
Commencement Date. Tenant, at Tenant’s expense, shall cause its architect, TPG Architecture,
LLP

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to prepare a final set of plans (the “Plans”) for the construction and finishing of the Fifth
Premises. The Plans shall (i) comply with all Legal Requirements, (ii) contain complete
information (including engineering required) and be in sufficient detail so as to be accepted for
filing by the New York City Building Department, and (iii) show the proposed locations of all
mechanical, electrical and plumbing equipment, partitions, ceilings, entrances, doors, lighting,
fixtures, receptacles and switches, and other installations to be installed in the Fifth Premises.
The Plans shall be submitted by Tenant to Landlord for Landlord’s approval. Any revisions to the
Plans required by Landlord shall be performed by Tenant within five (5) business days after demand
by Landlord. Landlord agrees to respond to any written request for approval of a complete set of
Tenant’s Plans within ten (10) business days after Landlord’s receipt thereof. Tenant shall
incorporate into Tenant’s Plans those changes, revisions and/or additions reasonably required by
Landlord, and shall resubmit the revised Tenant’s Plans to Landlord for Landlord’s approval.
Landlord agrees to respond to any written request for approval of revised Plans within five (5)
business days after Landlord’s receipt thereof. The cost of preparing (and revising, if necessary)
Tenant’s Plans shall be borne entirely by Tenant. Tenant shall reimburse Landlord, as additional
rent, for any actual out-of-pocket fees and expenses incurred by Landlord in connection with
Landlord’s review of Tenant’s Plans and any revisions thereto by bona fide third parties.
Landlord’s approval of any plans or specifications shall not be deemed to constitute and shall not
relieve Tenant from Tenant’s full responsibility for the feasibility, compliance with laws and
technical competency thereof. Notwithstanding any provision of this Agreement to the contrary, any
requests for revisions to the Plans or other notices to be given hereunder pursuant to this Article
may be given to Landlord’s or Tenant’s designated representative (as the case may be) either (i)
delivered personally, or (ii) sent by certified mail, return receipt requested, or overnight
courier, with receipt acknowledged.

     B. In accordance with the Plans, Tenant shall, at Tenant’s sole cost and expense and as part
of Tenant’s “Alterations” (as defined in Section 1.01 of the Lease), perform all of the work
specified in the Plans (the “Fifth Premises Work”) in the entire Fifth Premises necessary for
Tenant’s occupancy thereof, subject to the provisions of the Lease and this Agreement. Tenant
agrees with respect to its activities and work that it will conform to all of Landlord’s reasonable
labor regulations of which it receives written notice and shall not knowingly do or permit anything
to be done that might create any work stoppage, picketing or other labor disruption or dispute.
Tenant agrees that it will, prior to the commencement of any work in the Fifth Premises, deliver to
Landlord all certificates of insurance required to be supplied to Landlord by Tenant pursuant to
the terms of the Lease and this Agreement.

     C. In consideration of Tenant performing all of the Fifth Premises Work and for Tenant
completing all of the Fifth Premises Work necessary for its occupancy thereof, in accordance with
all of the terms, covenants and conditions of the Lease and this Agreement, Landlord agrees that if
Tenant, within a period of twenty-four (24) months from the Fifth Premises Commencement Date, shall
have fully satisfied all of the following conditions (collectively, the “L/C Conditions"): (i)
Tenant shall have submitted to Landlord a reasonably detailed itemization of the leasehold
improvements installed by Tenant in the entire Fifth Premises, (ii) Tenant shall have
submitted to Landlord final lien waivers and a lien search conducted after the date of the
completion of the Fifth

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Premises Work demonstrating that there has not been filed with respect to
the land and/or the Building and/or the Fifth Premises or any part thereof or upon Tenant’s
leasehold interest therein any vendor’s, mechanic’s, laborer’s, materialman’s or other lien arising
out of the Fifth Premises Work which has not been discharged of record, and (iii) the Fifth
Premises Work shall have been uniformly performed and completed in the entire Fifth Premises, and
(iv) Tenant shall not then be in default (after notice and the expiration of any applicable cure
period in this Lease) with respect to any of the “material” terms, covenants or conditions to be
performed or observed by Tenant under the Lease or this Agreement (which for purposes of this
Article is deemed to mean Tenant’s obligation to pay Minimum Rent and additional rent), then
Landlord shall reimburse or cause to be reimbursed to Tenant an amount (the “Landlord’s F/P
Contribution”) equal to the lesser of (a) the actual cost of the Fifth Premises Work improvements
performed by Tenant in the entire Fifth Premises and “Tenant’s Reimbursable Costs” (as hereinafter
defined), or (b) TWO HUNDRED FIFTEEN THOUSAND FIVE HUNDRED EIGHTY AND 00/100 ($215,580.00) DOLLARS
(said amount herein being referred to as the “Maximum Contribution Amount”) and that all costs and
expenses in excess of said sum shall be borne solely by Tenant.

     D. Upon Tenant’s request, Landlord’s F/P Contribution as provided in Paragraph 4.C. hereof
shall be paid out from time to time but not more frequently than monthly (in contradistinction to
upon completion and receipt by Landlord of paid bills for all of the Fifth Premises Work) as the
Fifth Premises Work progresses, which request by Tenant shall be accompanied by the following (such
request, together with all of the following documentation, shall herein be referred to as the
“Progress Payment Installment Requisition”):

               (1) a certificate signed by Tenant or Tenant’s architect, dated not more than ten (10) days
prior to such request, setting forth the following:

          (i) that, to the best knowledge of Tenant’s architect, the sum then requested
was justly due to persons who have rendered services or furnished materials for the
work therein specified, and giving a brief description of such services and
materials and the several amounts to be paid to each of said persons in respect
thereof, and certifying that the Fifth Premises Work represented by the aforesaid
invoices has been satisfactorily completed in accordance with the final plans;

          (ii) that, to the best knowledge of Tenant’s architect, no part of such
expenditure is being made the basis, in any previous or then pending prior request,
for the receipt of Landlord’s F/P Contribution or has been made out of the proceeds
of Landlord’s F/P Contribution received by Tenant, and that the sum then requested
does not exceed the value of the services and materials described in the
certificate; and

          (iii) that, to the best knowledge of Tenant’s architect, except for the amount,
if any, stated pursuant to the foregoing subparagraph 4.D.1.(i) in such

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certificate
to be due for services or materials, there is no outstanding indebtedness known to
the persons signing such certificate, which is then due for labor, wages, materials,
supplies or services in connection with such work which, if unpaid, might
immediately become the basis of a vendor’s, mechanic’s, laborer’s or material man’s
statutory or similar lien upon such work or upon the land and or the Building or the
Fifth Premises or any part thereof or upon Tenant’s leasehold interest;

               (2) a current lien search demonstrating that there has not been filed with respect to the land
and Building and/or the Fifth Premises or any part thereof or upon Tenant’s leasehold interest
therein any lien which has not been discharged of record; and

               (3) waivers of lien for the work performed up to and including the date of such request from
all contractors, subcontractors and materialmen involved in the performance of the Fifth Premises
Work and the materials furnished in connection therewith.

          Subject to the provisions of Paragraph 4.C. hereof, upon compliance with the foregoing
provisions of this Paragraph 4.D. and provided Tenant shall not then be in default (after notice
and the expiration of any applicable cure period in this Lease) with respect to any of the monetary
terms to be performed or observed by Tenant under the Lease or this Agreement, Landlord shall pay
or cause to be paid to Tenant or, at Tenant’s written instruction, directly to the persons named
(pursuant to the foregoing subparagraph 4.D.a.(i)) in such certificate, the respective amounts
stated therein to be due to them provided, however, that Landlord’s F/P Contribution shall not
exceed the sum of TWO HUNDRED FIFTEEN THOUSAND FIVE HUNDRED EIGHTY AND 00/100 ($215,580.00) DOLLARS
and that all costs and expenses in excess of said sum shall be borne solely by Tenant. The amount
of each installment of Landlord’s F/P Contribution payable pursuant to any Progress Installment
Requisition shall be an amount equal to the lesser of(x) the amount requested by Tenant in the
Progress Payment Installment Requisition in question, or (y) the amount equal to the product
obtained by multiplying the Maximum Contribution Amount by a fraction, the numerator of which is
the actual costs paid by Tenant for the completed portions of Fifth Premises Work referenced in the
Progress Payment Installment Requisition in question, and the denominator of which is equal to the
total estimated cost of the Fifth Premises Work, which estimate shall be made and certified by
Tenant’s architect in good faith based upon the final plans for the Fifth Premises Work.
Notwithstanding anything to the contrary contained herein, Landlords’ payment of the final fifteen
(15%) percent of the Landlord’s F/P Contribution shall be subject to Tenant’s full satisfaction of
the L/C Conditions. For purposes of this Article, the “Tenant’s Reimbursable Costs” shall mean the
aggregate of the reasonable, out-of-pocket third party expenses incurred by Tenant solely in
connection with Tenant’s performance of Tenant’s Fifth Premises Work in the Fifth Premises for the
following items: (i) architectural fees; (ii) engineering fees; and (iii) filing fees. In no
event shall the
aggregate amount of the Landlord’s F/P Contribution utilized to pay for Tenant’s Reimbursable
Costs exceed fifteen (15%) percent of the total Landlord’s F/P Contribution.

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     E. The provisions of Article 2 of the Lease shall not apply to the Fifth Premises.
The provisions of Article 5 of the Lease shall apply to the Fifth Premises, except that:
(i) at Tenant’s sole cost and expense, the Fifth Premises Work shall be performed by Ambassador
Construction Co. and only by contractors, subcontractors and mechanics designated on the list of
currently approved contractors, subcontractors and mechanics which is annexed hereto as Exhibit
“B”, which are deemed approved only for the performance of the Fifth Premises Work and not for any
other future Alterations; (ii) Tenant shall utilize only Landlord’s designated subcontractors for
the performance of life safety systems (including without limitation Class E system work
subcontractors), security subcontractors (if the Fifth Premises Work shall affect any Building
security system) and HVAC subcontractors; (iii) Tenant shall utilize the “expediter” designated by
Landlord in connection with the Fifth Premises Work, which Landlord hereby designates to be Charles
Rizzo & Associates; and (iv) Section 5.01.C of the Lease shall not apply to this Fifth Amendment.
In the event of any conflict between the terms of this Fifth Amendment and the terms of Article 5
of the Original Lease, the terms of this Fifth Amendment shall control.

     F. Tenant may non-exclusively use the Building freight elevator on a first come, first served
basis, which use shall be scheduled in advance with Landlord and be subject to availability and the
use in common with the other tenants of the Building and Landlord, its employees, agents and
contractors; and exclusively by appointment (subject to availability).

     G. If required by applicable law, Tenant’s Fifth Premises Work shall include the furnishing
and installation of a sprinkler system in the entire Fifth Premises (the “Tenant’s Sprinkler
Installation”), including without limitation the furnishing and installation of all equipment
necessary to connect such sprinkler system in the Fifth Premises to the main sprinkler loop
existing on the floor of the Fifth Premises. The following provisions of this Paragraph shall
apply with respect to Tenant’s Sprinkler Installation: (i) such sprinkler system must comply with
all applicable laws, orders, rules and regulations; (ii) the type, brand, location and manner of
installation of such sprinkler system shall be subject to Landlord’s prior reasonable approval;
(iii) Tenant shall make all repairs and replacements, as and when necessary, to such sprinkler
system (including, without limitation, the main sprinkler loop from the flow control assembly on
the thirtieth (30th) floor) and any replacements thereof; and (iv) notwithstanding
anything contained in this Agreement or the Lease to the contrary, such sprinkler system, or any
replacement thereof and any installments in connection therewith, whether made by Tenant or
Landlord, shall upon expiration or sooner termination of the Lease be deemed the property of
Landlord.

     H. Notwithstanding anything in this Article to the contrary, in the event the actual aggregate
cost of the Fifth Premises Work for which Landlord has disbursed Landlord’s F/P Contribution as
hereinabove provided (the “Actual Disbursement") has been finally determined to be less than the
TWO HUNDRED FIFTEEN THOUSAND FIVE HUNDRED EIGHTY AND

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00/100 ($215,580.00) DOLLARS, then, provided Tenant is not in default under the Lease beyond the
expiration of applicable notice and cure periods, the difference between the Actual Disbursement
and said sum of TWO HUNDRED FIFTEEN THOUSAND FIVE HUNDRED EIGHTY AND 00/100 ($215,580.00) DOLLARS
shall be credited against the Fifth Premises Minimum Rent payable by Tenant after the expiration of
the Free F/P Minimum Rent Period set forth in Article 5 of this Agreement.

			
	5.	 	FIFTH PREMISES MINIMUM RENT; FREE F/P MINIMUM RENT PERIOD; SECURITY DEPOSIT:

     A. Effective throughout the Fifth Premises Term, the annual Minimum Rent payable pursuant to
the Lease shall be increased by THREE HUNDRED FORTY-FOUR THOUSAND NINE HUNDRED TWENTY EIGHT AND
00/100 ($344,928.00) DOLLARS per annum ($28,744.00 per month) to be paid in connection with the
Fifth Premises (which amount shall herein be referred to as the “Fifth Premises Minimum Rent”); all
of which shall be payable in equal monthly installments in advance on the first day of each and
every calendar month during the Fifth Premises Term. If the Fifth Premises Commencement Date
occurs on a day other than the first day of a calendar month, the Fifth Premises Minimum Rent for
such partial calendar month shall be prorated on the basis of the number of days of the Fifth
Premises Term within such calendar month, and the balance of the first month’s Fifth Premises
Minimum Rent theretofore paid shall be credited against the next monthly installment of the Fifth
Premises Minimum Rent.

     B. Section 3.01 of the Lease, Paragraph 8.D. of the Third Amendment, Paragraph 5.D of the
Fourth Amendment and any other initial free rent periods shall not apply to the Fifth
Premises Minimum Rent payable by Tenant for the Fifth Premises.

     C. For the purposes of this Agreement, the “Free F/P Minimum Rent Period” shall mean the three
(3) month period commencing on the Fifth Premises Commencement Date.

     D. Effective as of the Fifth Premises Commencement Date and provided Tenant is not then in
monetary default under the terms, covenants and conditions of the Lease and/or this Agreement,
Tenant is herewith granted a rent concession during the Free F/P Minimum Rent Period solely with
respect to the Fifth Premises in connection with the Fifth Premises Minimum Rent payable as set
forth in Paragraph 5.A. of this Agreement for the Fifth Premises; provided, however, Tenant shall
nevertheless be obligated to pay to Landlord all other additional rents and charges payable under
the terms of the Lease and this Agreement (including, without limitation, electricity) during the
Free F/P Minimum Rent Period. Except for the rent concession as herein provided during the Free
F/P Minimum Rent Period, Tenant shall use and occupy the Fifth Premises during the Free F/P Minimum
Rent Period pursuant to all of the other terms, covenants and conditions of the Lease and this
Agreement.

     E. Effective as of the date of this Agreement, the “Security Deposit Amount” set forth in
Section 1.01 of the Lease as heretofore modified shall be further increased by the amount of
FIFTY-SEVEN THOUSAND FOUR HUNDRED EIGHTY-EIGHT AND 00/100 ($57,488.00) DOLLARS (the “Fifth Premises
Security Amount”). Upon Tenant’s execution of this Agreement, Tenant shall deposit with Landlord
as additional security the Fifth Premises Security Amount. Tenant may

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deliver the Fifth Premises
Security Amount to Landlord in the form of a “Letter of Credit” in accordance with the provisions
of Section 33.03 of the Original Lease.

6. ADDITIONAL RENT:

     Effective during the Fifth Premises Term and solely with respect to the Fifth Premises,
Section 1.01 of the Lease shall be deemed amended as follows (it being agreed that Section 1.01 of
the Lease shall remain unmodified with respect to the balance of the Demised Premises):

	 	(i)	 	the “Base Operating Amount” shall mean the amount of the
Operating Expenses for the 2007 calendar year;
	 
	 	(ii)	 	the “Base Tax Amount” shall mean the amount of Taxes with
respect to the twelve month period ending December 31, 2007 (i.e., the amount
determined by adding the Taxes for the Tax Year ending June 30, 2006 plus the
Taxes for the Tax Year ending June 30, 2007, and dividing such sum by 2);
	 
	 	(iii)	 	the term “Square Feet of Rentable Area” in the Fifth Premises
shall be deemed to be the equivalent of Ten Thousand Seven Hundred Seventy-Nine
(10,779) rentable square feet, as agreed to by the parties. This definition
shall not be construed as any kind of representation by Landlord as to the size
of the Fifth Premises or the Building;
	 
	 	(iv)	 	the term “Tenant’s Operating Share” shall mean .60%;
	 
	 	(v)	 	the term “Tenant’s Tax Share” shall mean .60%;
	 
	 	(vi)	 	Section 20.02 of the Lease shall be amended by adding the following
sentence:
	 
	 	 	 	“Where more than one (1) meter measures the amount of usage to the Fifth
Premises, usage through each meter shall be billed in the aggregate with
coincidental demand in accordance with the provisions of this Article 20.”;
	 
	 	(vii)	 	on the first line of Section 20.03.B(i) of the Lease, the
amount of “60,733.75” shall be replaced with the amount “$29,642.25”; and
	 
	 	(viii)	 	on the fifth (5th) line of Section 20.03.B(i) of the Lease, the amount of
“$22,085.00” shall be replaced with the amount of “$10,779.00”.

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7. SURRENDER OF POSSESSION OF FIFTH PREMISES:

     On or before the Fifth Premises Expiration Date, Tenant shall surrender the Fifth Premises to
Landlord broom clean and otherwise in accordance with the Lease provisions pertaining to the
surrender of possession of the Demised Premises on the Expiration Date, and if Tenant shall fail to
so surrender possession to Landlord, Landlord shall have the rights and remedies set forth in the
Lease with respect to a holding over in the Demised Premises, including, without limitation, under
Article 25 of the Lease. Notwithstanding Tenant’s surrender of the Fifth Premises on the Fifth
Premises Expiration Date, Tenant’s obligations to pay Fifth Premises Minimum Rent and Additional
Rent and all other obligations of Tenant under the Lease which shall have accrued with respect tot
the Fifth Premises prior to the Fifth Premises Expiration Date shall survive the Fifth Premises
Expiration Date.

8. ASSIGNMENT OF LEASE; SUBLETTING:

     A. Tenant intends to simultaneously herewith sublease the Fifth Premises to TICNY (the
“Sublease”). Tenant hereby represents to Landlord that as of the date of this Agreement, TICNY is
a wholly owned subsidiary of Tenant, and as such constitutes a “Related Corporation” under the
Original Lease. Accordingly, the Sublease of the Fifth Premises, in accordance with the provisions
of Paragraph 40.H.1. of the Original Lease, did not require the consent of Landlord.

     B. Article 15 of the Third Amendment shall apply to the entire Demised Premises and is amended
such that reference to the “New Premises” shall be deemed to be reference to the “Demised
Premises”.

9. SHAFT SPACE; ROOF SPACE:

     Article 12 of the Third Amendment shall apply to the Fifth Premises and the phrase “New
Premises” as contained therein shall be replaced with “Fifth Premises” for purposes of this Fifth
Amendment.

10. FIFTH PREMISES RENEWAL TERM 

     A. Subject to the provisions hereinafter set forth, Tenant named herein shall have the option
(the “Fifth Premises Renewal Option”) to extend the Fifth Premises Term for one (1) additional
period (the “Fifth Premises Renewal Term”), which Fifth Premises Renewal Term shall
commence on the date immediately succeeding the Fifth Premises Expiration Date and end on the
Expiration Date of the term of the Lease, provided that (a) the lease shall not have been
previously terminated, (b) Tenant and Related Corporations shall occupy at least fifty-one (51%)
percent of the Demised Premises and substantially the entire Fifth Premises, for the conduct of its
business at the Demised Premises, and (c) Tenant shall not be in material default (including
monetary default) under

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this lease beyond the giving of any applicable notice and the expiration of
any applicable cure period (x) on the date Tenant gives Landlord written notice (the “ Fifth
Premises Renewal Notice”) of Tenant’s election to exercise the Fifth Premises Renewal Option, or,
at the option of Landlord, (y) on the Fifth Premises Expiration Date. The Fifth Premises Renewal
Option may be exercised with respect to the entire Fifth Premises only and shall be exercisable by
Tenant delivering the Fifth Premises Renewal Notice to Landlord at least twelve (12) months, but no
more than twenty-four (24) months prior to the Fifth Premises Expiration Date. Time is of the
essence with respect to the giving of the Fifth Premises Renewal Notice.

     B. If Tenant exercises the Fifth Premises Renewal Option, the Fifth Premises Renewal Term
shall be upon the same terms, covenants and conditions as those contained in the Lease as amended
by the this Amendment, except that (a) the Fifth Premises Minimum Rent payable during such Fifth
Premises Renewal Term shall be deemed to mean the Fifth Premises Minimum Rent as determined
pursuant to Section C of this Article, and (b) Tenant shall not be entitled to any free rent
period, Landlord’s Work or Landlord’s Contribution.

     C. The Fifth Premises Minimum Rent payable during the Fifth Premises Renewal Term shall be
determined as follows:

          1. The Fifth Premises Minimum Rent for the Fifth Premises for the Fifth Premises Renewal Term
shall be an amount equal to one hundred (100%) percent of the annual fair market rental value of
the Fifth Premises (the “Fifth Premises Fair Market Rent”) on the first (1st) day of the Renewal
Term (the “ Fifth Premises Rental Value” for the Fifth Premises Renewal Term).

          2. The Fifth Premises Fair Market Rent shall be determined as if the Fifth Premises were
available in the then rental market for comparable quality office buildings in downtown Manhattan
and assuming Landlord has had a reasonable time to locate a tenant who rents with the knowledge of
the uses to which the Fifth Premises can be adapted in its as-is condition at the time, and that
neither Landlord nor the prospective tenant is under any compulsion to rent, taking into account
the fact that (a) Landlord shall not be required to perform any work in or to the Fifth Premises or
contribute to any work to be performed, and (b) Landlord shall not be required to provide for any
free rent period. During the Fifth Premises Renewal Term, all additional rent and other charges
payable hereunder shall continue to be paid pursuant to the terms of this Amendment.

          3. For purposes of determining the Fifth Premises Fair Market Rent, the following procedure
shall apply:

     (i) the Fifth Premises Fair Market Rent shall be determined on the basis of the
highest and best use (taking into account those uses expressly prohibited
thereunder) of the Fifth Premises assuming that the Fifth Premises are free and
clear of all leases and tenancies (including the Lease), and that the Fifth Premises
are

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occupied by one (1) tenant, and taking into account the Tenant’s Operating Share
and the Tenant’s Tax Share for the Fifth Premises.

     (ii) Landlord shall give Tenant written notice (the “Fifth Premises Rent
Notice”) within one hundred twenty (120) days prior to the Fifth Premises Expiration
Date, which shall set forth Landlord’s determination of the Fifth Premises Fair
Market Rent (“Landlord’s FP Determination”).

     (iii) Tenant shall give Landlord written notice (“Tenant’s FP Option Notice”),
within thirty (30) days after Tenant’s receipt of the Fifth Premises Rent Notice, of
whether Tenant accepts or disputes Landlord’s FP Determination. If Tenant in
Tenant’s FP Option Notice accepts Landlord’s FP Determination or if Tenant fails or
refuses to give Tenant’s FP Option Notice as aforesaid, Tenant shall be deemed to
have accepted Landlord’s FP Determination for the Fifth Premises Renewal Term in
accordance with the terms of this Article. If Tenant in Tenant’s FP Option Notice
disputes Landlord’s FP Determination, Tenant shall deliver to Landlord, within
thirty (30) days after Tenant’s delivery of the Tenant’s FP Option Notice, Tenant’s
determination of the Fifth Premises Fair Market Rent (“Tenant’s FP Determination”),
as determined by an independent real estate appraiser (“Tenant’s Appraiser”),
together with a copy of the appraisal prepared by Tenant’s Appraiser.

     (iv) Landlord shall give Tenant written notice (“Landlord’s R/O Notice”),
within thirty (30) days after Landlord’s receipt of Tenant’s FP Determination, of
whether Landlord accepts or disputes Tenant’s FP Determination. If Landlord in
Landlord’s R/O Notice accepts Tenant’s FP Determination or if Landlord fails or
refuses to give Landlord’s R/O Notice as aforesaid, Landlord shall be deemed to have
accepted Tenant’s FP Determination. If Landlord in Landlord’s R/O Notice disputes
Tenant’s FP Determination, Landlord shall appoint an independent real estate
appraiser (“Landlord’s Appraiser”). If within thirty (30) days after Tenant’s
receipt of Landlord’s R/O Notice in dispute, Landlord’s Appraiser and Tenant’s
Appraiser shall mutually agree upon the determination (the “Mutual Determination”)
of the Fifth Premises Fair Market Rent, their determination shall be final and
binding upon the parties. If Landlord’s Appraiser and Tenant’s Appraiser shall be
unable to reach a Mutual Determination within said thirty (30) day period, both of
the Appraisers shall jointly select a third independent real estate appraiser (the
“Third Appraiser”) whose fee shall be borne equally by Landlord and Tenant. In the
event that Landlord’s Appraiser and Tenant’s Appraiser shall be unable to
jointly agree on the designation of the Third Appraiser within five (5) days after
they are requested to do so by either party, then the parties agree to allow the
American Arbitration Association, or any successor organization, to designate the
Third

11

 

Appraiser in accordance with the rules, regulations and/or procedures then
obtaining of the American Arbitration Association or any successor organization.

     (v) The Third Appraiser shall conduct such hearings and investigations as he
may deem appropriate and shall, within thirty (30) days after the date of
designation of the Third Appraiser, choose either Landlord’s or Tenant’s FP
Determination, and such choice by the Third Appraiser shall be conclusive and
binding upon Landlord and Tenant. Each party shall pay its own counsel fees and
expenses, if any, in connection with any arbitration under this Section, including
the expenses and fees of any Appraiser selected by it in accordance with provisions
of this Article. Any Appraiser appointed pursuant to this Article shall be a
licensed, independent real estate appraiser with at least ten (10) years’ experience
in leasing and valuation of properties which are similar in character to the
building and a member of the American Institute of Appraisers of the National
Association of Real Estate Boards and a member of the Society of Real Estate
Appraisers. The Appraisers shall not have the power to add to, modify or change any
of the provisions of this lease.

     (vi) It is expressly understood that any determination of the Fifth Premises
Fair Market Rent pursuant to this Article shall be based on the criteria stated in
this Section.

          4. After a determination has been made of the Fifth Premises Rental Value for the Fifth
Premises Renewal Term, the parties shall execute and deliver to each other an instrument setting
forth the Fifth Premises Rental Value as hereinabove determined.

          5. If the final determination of the Fifth Premises Rental Value shall not be made on or
before the first (1st) day of the Fifth Premises Renewal Term in accordance with the provisions of
this Article, pending such final determination Tenant shall continue to pay, as the Fifth Premises
Minimum Rent for the Fifth Premises Renewal Term, an amount equal to Fifth Premises Minimum Rent
and additional rent payable immediately prior to the commencement of the Fifth Premises Renewal
Term. If, based upon the final determination hereunder of the Fifth Premises Rental Value, the
payments made by Tenant on account of the Fifth Premises Minimum Rent for such portion of the Fifth
Premises Renewal Term were (i) less than the Fifth Premises Rental Value payable for the Fifth
Premises Renewal Term, Tenant shall pay to Landlord the amount of such deficiency within ten (10)
days after demand therefore or (ii) greater than the Rental Value payable for the Renewal Term,
Landlord promptly shall refund to Tenant the amount of such excess.

          6. If Tenant exercises its Fifth Premises Renewal Option hereunder, Article 16 of the Third
Amendment to Lease (“Tenant’s Cancellation Option”) shall also apply to the Fifth Premises.

12

 

11. BROKER:

     Landlord and Tenant each represents and warrants to Landlord that it neither consulted nor
negotiated with any broker or finder in connection with this Agreement other than CB Richard Ellis,
Inc. and Silverstein Properties, Inc., as agent for Landlord. Landlord and Tenant agree to
indemnify and hold the other harmless from and against any damages, costs and expenses suffered by
reason of any breach of the foregoing representation. For purposes of this Agreement, the term
“Designated Broker” shall be deemed to mean CB Richard Ellis, Inc. and Silverstein Properties, Inc.
Landlord agrees to pay the Designated Broker any commission due pursuant to a separate agreement.

12. MISCELLANEOUS:

     A. Except as otherwise expressly set forth in this Agreement, all of the terms, provisions,
covenants and conditions of the Lease shall remain and continue unmodified and in full force and
effect and are hereby ratified and confirmed in all respects.

     B. This Agreement shall not be changed, modified or cancelled orally. This Agreement shall be
binding upon the parties hereto, their respective heirs, administrators, successors and, as
permitted, assigns.

     C. This Agreement shall in all respects and in all events be governed by and construed in
accordance with the laws of the State of New York (excluding, however, its conflict of laws
provisions).

     D. This Agreement is being tendered to Tenant without obligation on Landlord’s part and in no
event shall it be deemed to be binding upon Landlord or give Tenant any rights unless and until
Landlord shall have executed the same and delivered a copy to Tenant.

     IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this Fifth Amendment to
Lease as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	120 BROADWAY HOLDINGS, LLC, Landlord	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	120 BROADWAY SM, LLC,	 	 
	 	 	 	 	a Delaware limited liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	120 BROADWAY JM, LLC,	 	 
	 	 	 	 	 	 	a Delaware limited liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	120 BROADWAY ACQUISITION JV, LLC,	 	 
	 	 	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	120 BROADWAY ASSOCIATES LLC,	 	 
	 	 	 	 	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	 	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	SILVERSTEIN 120 BROADWAY LLC,	 	 

13

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:
	 	/s/ Larry A. Silverstein	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Name:
	 	Larry A. Silverstein	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	President	 	 

	 	 	 	 	 	 	 	 	 
	 	 	TOWER GROUP, INC., Tenant	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Michael H. Lee	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Michael H. Lee	 	 
	 

	 	 	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Tenant’s Federal Employer I.D. Number:___	 	 

14

 

	 	 	 	 	 	 	 
	STATE OF NEW YORK

	 	 	)	 	 	 
	 

	 	 	:	 	 	ss.:
	COUNTY OF NEW YORK

	 	 	)	 	 	 

     On the  21st  day of  December  in the year 2006, before me,
the undersigned, a Notary Public in and for said State, personally appeared  Michael H.
Lee, personally known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

	 	 	 	 	 
	 

	 	Lisa Callender
	 	 
	 

	 	 	 	 
	 

	 	NOTARY PUBLIC	 	 
	 
	 	 	 	 
	 

	 	Lisa Callender	 	 
	 

	 	Notary Public, State of New York	 	 
	 

	 	No. 01CA6108792	 	 
	 

	 	Qualified in Kings County	 	 
	 

	 	Commission Expires April 19, 2008	 	 

15

 

EXHIBIT “A”

FIFTH PREMISES

NOTE: This is a schematic plan and is intended to only show the proposed general layout of the
Fifth Premises. All measures, distances and dimensions are approximate and not to scale. The
depictions hereon do not constitute a warranty or representation of any kind.EX-10.54

 

EXHIBIT 10.54

MEMORANDUM OF AGREEMENT

The attached Amendment No. 2 to the Amended & Restated Brokerage Business Quota Share Reinsurance
Agreement has been submitted for regulatory approval. The participating companies below have
agreed to the attached Amendment No. 2 pending regulatory approval.

	 	 	 	 	 	 	 
	/s/ Francis M. Colalucci

	 	 
	 	9/18/2007
	 	 
	 

	 	 	 	 	 	 
	Tower Insurance Company of New York

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ Francis M. Colalucci

	 	 	 	9/18/2007	 	 
	 

	 	 	 	 	 	 
	Tower National Insurance Company

	 	 	 	 Date	 	 
	 
	 	 	 	 	 	 
	/s/ Joseph P. Beitz

	 	 	 	9/7/2007	 	 
	 

	 	 	 	 	 	 
	CastlePoint Reinsurance Company

	 	 	 	Date	 	 

1

 

Amendment No.2

To

Amended and Restated

Brokerage Business Quota Share Reinsurance Agreement Effective April 1, 2006

(Hereinafter referred to as the “Original Agreement”)

Between

TOWER INSURANCE COMPANY OF NEW YORK

(Hereinafter referred to as the “Company”)

And

CASTLEPOINT REINSURANCE COMPANY, LTD.

(Hereinafter referred to as the “Reinsurer”)

WHEREAS, the Reinsurer and the Company are parties to the Original Agreement;

NOW THEREFORE, the parties hereby agree to amend the Original Agreement as amended by Amendment No.
1 as follows:

1. Effective July 1, 2006, Article VI, Reinsurance Coverage, paragraph A (as amended by Amendment
No. 1) is as follows:

The Company shall automatically and obligatorily cede to the Reinsurer, and the
Reinsurer shall be obligated to accept as assumed reinsurance, a 40% quota share
portion of the Net Liabilities with respect to new and renewal business, subject to
adjustment as set forth below. The Company may, in its sole discretion, change the
quota share participation of the Reinsurer, from time to time, as of any six month
anniversary date of the effective date of this Agreement upon not less than thirty (30)
days prior written notice to the Reinsurer, unless such notice is waived by the
Reinsurer, and provided, however, that the Company and the Reinsurer may agree to
change the Reinsurer’s quota share participation as of any calendar quarter, with all
such changes being affixed to the Agreement; provided further, however,
that the quota share participation of the Reinsurer shall at all times during the term
of this Agreement be a minimum of 25% and a maximum of 50%. Notwithstanding the
foregoing, if the Company writes business of the type that it has historically not
written or writes more than 25% of its gross written premiums outside the state of New
York in any 12 month period ending on the anniversary date of this Agreement, then the
Reinsurer has the right to refuse to reinsure such business that the Company has not
historically written and such excess business written outside the State of New York.

Furthermore, for the period beginning April 1, 2007, the Reinsurer shall reimburse the
Company for 30% of the amount of property catastrophe premiums paid by the Company
under its Property Catastrophe Program and shall assume 30% of any net retained
catastrophe losses and receive 30% of any reinsurance recovery under said Program.
In the event of a loss occurrence affecting the Company’s Property Catastrophe Program,
this quota share Agreement (excluding the 30% sharing of

2

 

catastrophe retention provision) and any other inuring reinsurance coverages will apply
before a recovery is made from the Property Catastrophe Program and the 30% sharing of
net retention and recovery is effected. Reinsurer may fulfill its obligations to
assume such property catastrophe premiums and losses directly or indirectly.

For the period April 1, 2007, to June 30, 2007, the Company’s Property Catastrophe
Program has a Deposit Premium of $5,153,750, a $15,000,000 retention and a $185,000,000
limit.

For the period July 1, 2007, to June 30, 2008, the Company’s Property Catastrophe
Program has a Deposit Premium of $23,875,000, a $50,000,000 retention and a
$400,000,000 limit.

2. Effective January 1, 2007, the quota share cession referenced to under Article VI, Reinsurance
Coverage, paragraph A, is 49% with respect to new and renewal business.

3 Effective January 1, 2007, paragraph 1.C of Amendment No. 1 is deleted.

4. Effective April 1, 2007, Company is defined as follows:

TOWER INSURANCE COMPANY OF NEW YORK

TOWER NATIONAL INSURANCE COMPANY

All other terms and conditions will remain unchanged.

IN WITNESS WHEREOF, the Company and the Reinsurer have caused this Agreement to be executed.

TOWER INSURANCE COMPANY OF NEW YORK

TOWER NATIONAL INSURANCE COMPANY

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

CASTLEPOINT REINSURANCE COMPANY, LTD.

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

3

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