<PAGE>
<TABLE>
<CAPTION>
<S> <C>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 1998 REGISTRATION NO. 333-
============================================================================================================
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
21ST CENTURY TELECOM GROUP, INC.
(EXACT NAME OF COMPANY AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-4076758
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
WORLD TRADE CENTER, 350 NORTH ORLEANS, SUITE 600
CHICAGO, ILLINOIS 60654
(312) 470-2100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
GLENN W. MILLIGAN
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD OF DIRECTORS
21ST CENTURY TELECOM GROUP, INC.
WORLD TRADE CENTER--CHICAGO, 350 NORTH ORLEANS, SUITE 600
CHICAGO, ILLINOIS 60654
(312) 470-2100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE, SHOULD BE SENT TO:
EDWIN M. MARTIN, JR., ESQ.
PIPER & MARBURY, L.L.P.
1200 NINETEENTH STREET, N.W.
WASHINGTON, D.C. 20036
(202) 861-6315
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX: [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX: [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT
TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST
THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING:
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING: [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX: [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AGGREGATE MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE(2) REGISTRATION FEE(3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12 1/4 SENIOR DISCOUNT
NOTES DUE 2008........... $363,135,000 55% $200,000,000 $ 0
- ------------------------------------------------------------------------------------------------------------------------------
13 3/4 SENIOR CUMULATIVE EXCHANGEABLE $ 50,000,000 100% $ 50,000,000 $ 0
PREFERRED STOCK DUE 2010
==============================================================================================================================
</TABLE>
(1) ESTIMATED SOLELY FOR PURPOSES OF CALCULATING THE REGISTRATION FEE.
(2) CALCULATED PURSUANT TO RULE 457(O).
(3) A REGISTRATION FEE OF $59,000 FOR THE 12 1/4 SENIOR DISCOUNT NOTES DUE
2008 AND $14,750 FOR THE 13 3/4 SENIOR CUMULATIVE EXCHANGEABLE PREFERRED
STOCK DUE 2010 WAS PAID AT THE TIME OF THE INITIAL FILING OF THIS
REGISTRATION STATEMENT.
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
Item 21. Exhibits and Financial
Statement Schedules
(a) Exhibits
- -------------------------------------------------------------------
Exhibit No. Document
- -------------------------------------------------------------------
<S> <C>
1.1 Purchase Agreement dated
as of February 2, 1998 by
and among the Company and
Credit Suisse First Boston
Corporation, BancAmerica
Robertson Stephens and
BancBoston Securities,
Inc., as Initial
Purchasers.
- -------------------------------------------------------------------
3.1 Amended Articles of
Incorporation of the
Company filed on February
9, 1998.
- -------------------------------------------------------------------
3.2 By-laws of the Company.
- -------------------------------------------------------------------
4.1 Indenture dated February
15, 1998 between the
Company, as Issuer, and
State Street Bank and
Trust, as Trustee, with
respect to the 12 1/4
Senior Discount Notes Due
2008.
- -------------------------------------------------------------------
4.2 Form of the 12 1/4 Senior
Discount Notes Due 2008
(included in Exhibit 4.1).
- -------------------------------------------------------------------
4.3 Indenture dated as of
February 15, 1998 between
the Company and IBJ
Schroder Bank & Trust
Company, as Trustee, with
respect to the Exchange
Debenture.
- -------------------------------------------------------------------
4.4 Form of the 13 3/4 Senior
Cumulative Exchangeable
Preferred Stock Due 2010.
- -------------------------------------------------------------------
4.5 Registration Rights
Agreement dated as of
February 2, 1998 by and
among the Company and
Credit Suisse First Boston
Corporation, BancAmerica
Robertson Stephens and
BancBoston Securities,
Inc., as Initial
Purchasers.
- -------------------------------------------------------------------
5.1 Opinion of Neal, Gerber
and Eisenberg.
- -------------------------------------------------------------------
5.2 Opinion of Piper & Marbury
LLP.
- -------------------------------------------------------------------
10.1 Franchise Agreement dated
as of June 24, 1996 by and
among the City of Chicago
and the Company.
- -------------------------------------------------------------------
10.2 License Agreement dated as
of October 27, 1994 by and
among the Chicago Transit
Authority and the Company.
- -------------------------------------------------------------------
10.3* + CSG Master Subscriber
Management System
Agreement dated as of May
28, 1997 by and among CSG
Systems, Inc. and the
Company.
- -------------------------------------------------------------------
10.4* + Telemarketing Consultation
Agreement dated as of
August 5, 1997 by and
among the Company and ITI
Marketing Services, Inc.
- -------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
<S> <C>
10.5* + Pole Attachment Agreement
dated as of April 3, 1996
by and among the Company
and Commonwealth Edison
Company.
- -------------------------------------------------------------------
10.6* + Pole Attachment Agreement
dated as of November 14,
1998 by and among the
Company and
Ameritech--Illinois.
- -------------------------------------------------------------------
10.7* + Office Lease dated January
31, 1997 by and among the
Company and LaSalle
National Bank.
- -------------------------------------------------------------------
12.1 Statement regarding
Computation of Earnings
Ratio to Fixed Charges.
- -------------------------------------------------------------------
21.1* Subsidiaries of the
Company.
- -------------------------------------------------------------------
23.1 Consent of Arthur Andersen
with Respect to the
Company.
- -------------------------------------------------------------------
23.2 Consent of Piper & Marbury
LLP (incorporated by
reference to Exhibit 5.2).
- -------------------------------------------------------------------
24.1 Power of Attorney
(included on the signature
page of this Registration
Statement).
- -------------------------------------------------------------------
25.1 Statement of Eligibility
of State Street Bank and
Trust, as Trustee.
- -------------------------------------------------------------------
99.1 Form of Letter of
Transmittal to 12 1/4
Senior Discount Notes Due
2008 of the Company.
- -------------------------------------------------------------------
99.2 Form of Letter of
Transmittal to 13 3/4
Senior Cumulative
Exchangeable Preferred
Stock Due 2010 of the
Company.
- -------------------------------------------------------------------
99.3 Form of Notice of
Guaranteed Delivery for
12-1/4% Senior Discount
Notes Due 2008
- -------------------------------------------------------------------
99.4 Form of Notice of
Guaranteed Delivery for
13-3/4% Senior Cumulative
Exchangeable Preferred
Stock Due 2010
- -------------------------------------------------------------------
99.5 Form of Letter to Brokers,
Dealers, Commercial Banks,
Trust Companies and Other
Nominees for 12-1/4%
Senior Discount Notes Due
2008
- -------------------------------------------------------------------
99.6 Form of Letter to Brokers,
Dealers, Commercial Banks,
Trust Companies and Other
Nominees for 13-3/4%
Senior Cumulative
Exchangeable Preferred
Stock Due 2010
- -------------------------------------------------------------------
99.7 Form of Letter to Clients
of Brokers, Dealers,
Commercial Banks, Trust
Companies and Other
Nominees for 12-1/4%
Senior Discount Notes Due
2008
- -------------------------------------------------------------------
99.8 Form of Letter to Clients
of Brokers, Dealers,
Commercial Banks, Trust
Companies and Other
Nominees for 13-3/4%
Senior Cumulative
Exchangeable Preferred
Stock Due 2010
- -------------------------------------------------------------------
99.9 Form of Instruction from
Owner of 12 1/4 Senior
Discount Notes Due 2008 of
the Company.
- -------------------------------------------------------------------
99.10 Form of Instruction from
Owner of 13 3/4 Senior
Cumulative Exchangeable
Preferred Stock of the
Company.
- -------------------------------------------------------------------
</TABLE>
- ----------------
* Filed herewith. All other exhibits previously filed.
+ Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant's
Application Requesting Confidential Treatment under Rule 406 of the
Act, filed on March 24, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Chicago,
state of Illinois, on March 24, 1998.
21st CENTURY TELECOM GROUP, INC.
By: /s/ Ronald D. Webster
--------------------------------------------
Ronald D. Webster, Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------- ----------------------------------- --------------
<S> <C> <C>
Chief Executive Officer and
* Chairman of the Board of Directors March 24, 1998
- --------------------------- (Principal Executive Officer)
Glenn W. Milligan
* President, Chief Operating Officer March 24, 1998
- --------------------------- and Director
Robert J. Currey
/s/ Ronald D. Webster Chief Financial Officer March 24, 1998
- ---------------------------
Ronald D. Webster
* Chief Technical Officer March 24, 1998
- ---------------------------
Jay E. Carlson
* March 24, 1998
- --------------------------- Director
Edward T. Joyce
* March 24, 1998
- --------------------------- Director
Dr. Charles E. Kaegi
*
- --------------------------- Director March 24, 1998
James H. Lowry
*
- --------------------------- Director March 24, 1998
David Kronfeld
</TABLE>
<PAGE>
*
- ------------------------------ Director March 24, 1998
Thomas Neustaetter
* By: /s/ Edwin M. Martin, Jr.
- ------------------------------ Director March 24, 1998
Edwin M. Martin, Jr.
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Document
- ----------------------------------------------------------------
<S> <C>
1.1 Purchase Agreement dated as
of February 2, 1998 by and
among the Company and Credit
Suisse First Boston
Corporation, BancAmerica
Robertson Stephens and
BancBoston Securities, Inc.,
as Initial Purchasers.
- ----------------------------------------------------------------
3.1 Amended Articles of
Incorporation of the Company
filed on February 9, 1998.
- ----------------------------------------------------------------
3.2 By-laws of the Company.
- ----------------------------------------------------------------
4.1 Indenture dated February 15,
1998 between the Company, as
Issuer, and State Street
Bank and Trust, as Trustee,
with respect to the 12 1/4
Senior Discount Notes Due
2008.
- ----------------------------------------------------------------
4.2 Form of the 12 1/4 Senior
Discount Notes Due 2008
(included in Exhibit 4.1).
- ----------------------------------------------------------------
4.3 Indenture dated as of
February 15, 1998 between
the Company and IBJ Schroder
Bank & Trust Company, as
Trustee, with respect to the
Exchange Debenture.
- ----------------------------------------------------------------
4.4 Form of the 13 3/4 Senior
Cumulative Exchangeable
Preferred Stock Due 2010.
- ----------------------------------------------------------------
4.5 Registration Rights
Agreement dated as of
February 2, 1998 by and
among the Company and Credit
Suisse First Boston
Corporation, BancAmerica
Robertson Stephens and
BancBoston Securities, Inc.,
as Initial Purchasers.
- ----------------------------------------------------------------
5.1 Opinion of Neal, Gerber and
Eisenberg.
- ----------------------------------------------------------------
5.2 Opinion of Piper & Marbury
LLP.
- ----------------------------------------------------------------
10.1 Franchise Agreement dated as
of June 24, 1996 by and
among the City of Chicago
and the Company.
- ----------------------------------------------------------------
10.2 License Agreement dated as
of October 27, 1994 by and
among the Chicago Transit
Authority and the Company.
- ----------------------------------------------------------------
10.3* + CSG Master Subscriber
Management System Agreement
dated as of May 28, 1997 by
and among CSG Systems, Inc.
and the Company.
- ----------------------------------------------------------------
10.4* + Telemarketing Consultation
Agreement dated as of August
5, 1997 by and among the
Company and ITI Marketing
Services, Inc.
- ----------------------------------------------------------------
10.5* + Pole Attachment Agreement
dated as of April 3, 1996 by
and among the Company and
Commonwealth Edison Company.
- ----------------------------------------------------------------
10.6* + Pole Attachment Agreement
dated as of November 14,
1998 by and among the
Company and
Ameritech--Illinois.
- ----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
<S> <C>
10.7* + Office Lease dated January
31, 1997 by and among the
Company and LaSalle National
Bank.
- ----------------------------------------------------------------
12.1 Statement regarding
Computation of Earnings
Ratio to Fixed Charges.
- ----------------------------------------------------------------
21.1* Subsidiaries of the Company.
- ----------------------------------------------------------------
23.1 Consent of Arthur Andersen
with Respect to the Company.
- ----------------------------------------------------------------
23.2 Consent of Piper & Marbury
LLP (incorporated by
reference to Exhibit 5.2).
- ----------------------------------------------------------------
24.1 Power of Attorney (included
on the signature page of
this Registration Statement).
- ----------------------------------------------------------------
25.1 Statement of Eligibility of
State Street Bank and Trust,
as Trustee.
- ----------------------------------------------------------------
99.1 Form of Letter of
Transmittal to 12 1/4 Senior
Discount Notes Due 2008 of
the Company.
- ----------------------------------------------------------------
99.2 Form of Letter of
Transmittal to 13 3/4 Senior
Cumulative Exchangeable
Preferred Stock Due 2010 of
the Company.
- ----------------------------------------------------------------
99.3 Form of Notice of Guaranteed
Delivery for 12-1/4% Senior
Discount Notes Due 2008
- ----------------------------------------------------------------
99.4 Form of Notice of Guaranteed
Delivery for 13-3/4% Senior
Cumulative Exchangeable
Preferred Stock Due 2010
- ----------------------------------------------------------------
99.5 Form of Letter to Brokers,
Dealers, Commercial Banks,
Trust Companies and Other
Nominees for 12-1/4% Senior
Discount Notes Due 2008
- ----------------------------------------------------------------
99.6 Form of Letter to Brokers,
Dealers, Commercial Banks,
Trust Companies and Other
Nominees for 13-3/4% Senior
Cumulative Exchangeable
Preferred Stock Due 2010
- ----------------------------------------------------------------
99.7 Form of Letter to Clients of
Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees for 12-1/4%
Senior Discount Notes Due
2008
- ----------------------------------------------------------------
99.8 Form of Letter to Clients of
Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees for 13-3/4%
Senior Cumulative
Exchangeable Preferred Stock
Due 2010
- ----------------------------------------------------------------
99.9 Form of Instruction from
Owner of 12 1/4 Senior
Discount Notes Due 2008 of
the Company.
- ----------------------------------------------------------------
99.10 Form of Instruction from
Owner of 13 3/4 Senior
Cumulative Exchangeable
Preferred Stock of the
Company.
- ----------------------------------------------------------------
</TABLE>
* Filed herewith. All other exhibits previously filed.
+ Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant's filed
on Application Requesting Confidential Treatment under Rule 406 of the
Act, March 24, 1998.
<PAGE>
EXHIBIT 10.3
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT
This CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT (the "Master Agreement")
is entered into as of this 28th day of May, 1997, between CSG Systems, Inc., a
Delaware corporation with offices at 2525 North 11 7th Avenue, Omaha, Nebraska
68164 ("CSG"), and 21st Century Cable TV, Inc., a Illinois corporation with
offices at 350 North Orleans, Suite 600, Chicago, Illinois 60654, (the
"Customer"). CSG and Customer agree as follows:
Subject to the terms and conditions of this Master Agreement Customer hereby
agrees to purchase and/or license from CSG its subscriber management system
solution utilizing the CSG services and products which am identified, provided
and/or licensed as set forth in the attached Schedules which are hereby
incorporated into and made a part of this Master Agreement by this reference,
including, but not necessarily limited to:
Schedule A - CSG's ***.
----------
Schedule B - CSG ***.
----------
Schedule C - CSG 's ***.
----------
Schedule G - CSG's***.
----------
Schedule I - ***.
-----------
Schedule K - ***.
-----------
The *** subsequently provided in an executed Schedule attached to this Master
Agreement am collectively referred to in this Master Agreement as the
"Services". CSG's ***, and any other CSG product subsequently licensed to
Customer in an executed Schedule attached to this Master Agreement are
collectively referred to in this Master Agreement as the "Products".
GENERAL TERMS AND CONDITIONS
1. FEES AND EXPENSES. The Products and Services will be provided for the fees
set forth on Schedule F. Customer shall also reimburse CSG for ***, incurred by
----------
CSG in connection with CSG's performance of its obligations under this Master
Agreement.
2. INVOICES. Unless otherwise provided herein, Customer shall pay amounts due
hereunder within thirty (30) days after receipt of invoice therefor. Any amount
not paid when due shall thereafter bear interest until paid at a rate equal to
the lesser of one and one-half percent (1 1/2%) per month or the maximum rate
allowed by applicable law.
3. TAXES. All amounts payable by Customer to CSG under this Master Agreement
are exclusive of any applicable value added, use, sales, service, property or
other taxes, tariffs or contributions that may be assessable in connection with
this Agreement. Customer will pay any applicable value added, use, sales,
service, property or other taxes, tariffs or contributions, in addition to the
amount due and payable. Customer will promptly furnish CSG with the official
receipt of payment of these taxes to the appropriate taxing authority.
4. ADJUSTMENT TO FEES. CSG shall not adjust any of the fees specified in
Schedule F or otherwise specified in Schedules hereto prior to the *** of the
- ----------
Effective Date (as defined below in Section 16). Thereafter, CSG may from time
to time by giving Customer at least *** prior written notice thereof, adjust any
or all such fees; provided, however, that the amount of all such increases
during any *** shall not on the average exceed *** percent of the percentage
increase in the Consumer Price Index, Urban Consumers, All Cities Averaged 1982-
84 Equals 100, during the prior calendar year as published by the U.S.
Department of Labor or any successor index.
5. SHIPMENT. CSG will ship the Products, any Incorporated Third Party
Software, and any other third party software from its distribution center,
subject to delays beyond CSG's control. CSG will select the method of shipment
via tape or by electronic file transfer for
___________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-1-
<PAGE>
Customer's account. The license granted to the Products as set forth in the
Schedule(s) commences upon CSG's delivery of the Products to the carrier for
shipment to Customer. Upon timely notice by Customer to CSG, CSG will promptly
replace, at CSG's expense, any Products that are lost or damaged while in route
to Customer.
6. EQUIPMENT PURCHASE. Customer is fully responsible for obtaining and
installing all computer hardware, software, peripherals and necessary
communications facilities, including, but not limited to printers, servers,
power supply, workstations, printers, concentrators, communications equipment
and routers (the "Required Equipment") that are necessary at Customer's place of
business in order for Customer to utilize the Services and the Products as
defined in this Master Agreement Customer shall bear responsibility for the
Required Equipment, including, but not limited to, the costs of procuring,
installing, operating and maintaining such Required Equipment At Customer's
request and subject to the terms and conditions of Schedule B. CSG will consult
----------
with, assist and advise Customer regarding Customer's discharge of its
responsibilities with respect to the Required Equipment and CSG will obtain for
Customer any Required Equipment at CSG's then-current prices and on terms and
conditions set forth in a separately executed purchase agreement
7. PRODUCTS WARRANTEES AND REMEDIES.
(a) Limited Warranty. Except as provided in Section 9 and 10, CSG warrants that
----------------
(i) the Products will conform to CSG's published specifications in effect on the
date of delivery and (ii) the Products will perform in a certified "Designated
Environment' (as defined in the applicable Schedules attached hereto)
---------
substantially as described in the accompanying Documentation for a period of
ninety (90) days after the date of delivery (the "Warranty Period").
Notwithstanding the foregoing, if Customer modifies VantagePoint by altering any
of the source code provided by CSG, this limited warranty will be void as it
relates to VantagePoint. Except as set forth in Schedule H CSG provides all
----------
third party software, including the "Incorporated Third Party Software" (as
defined below in Section 8), AS IS. Customer acknowledges that (i) the Products
and the Incorporated Third Party Software may not satisfy all of Customer's
requirements and (ii) the use of the Products and the Incorporated Third Party
Software may not be uninterrupted or error-free. Customer further acknowledges
that (i) the fees set forth in Schedule F and other charges contemplated under
this Master Agreement are based on the limited warranty, disclaimers and
limitation of liability specified in this Section and Sections 9, 10, 13, 14,
and 15 and (ii) such charges would be substantially higher if any of these
provisions were unenforceable.
(b) Remedies. In case of breach of warranty or any other duty related to the
quality of the Products, CSG or its representative will correct or replace any
defective Product or, if not practicable, CSG will accept the return of the
defective Product and refund to Customer (i) the amount actually paid to CSG
allocable to the defective Product, and (ii) a pro rata share of the maintenance
fees that Customer actually paid to CSG for the period that such Product was not
--------
usable. Customer acknowledges that this Subsection 7(b) sets forth Customer's
exclusive remedy, and CSG's exclusive liability, for any breach of warranty or
other duty related to the quality of the Products. THE REMEDIES SET FORTH IN
THIS PARAGRAPH ARE SUBJECT TO THE "LIMITATION OF REMEDIES" SET FORTH BELOW IN
SECTION 14.
8. INCORPORATED THIRD PARTY SOFTWARE OR THIRD PARTY RIGHTS. Customer
acknowledges that the Products incorporate certain third party computer programs
and documentation (the "Incorporated Third Party Software") and/or the Products
are licensed and the Services are offered under certain third party patent,
copyright or other rights (the "Third Party Rights"), which are subject to the
additional or alternative terms and conditions set forth in Schedule H. as
----------
applicable (the "Incorporated Licenses"). In case of any conflict between this
Master Agreement and the Incorporated Licenses, the terms of the Incorporated
Licenses will prevail with respect to the Incorporated Third Party Software or
the Third Party Right Customer will be responsible for paying any fees for the
Incorporated Third Party Software that may be due in connection with this Master
Agreement CSG will be responsible for paying any fees for the Third Party Rights
that may be due in connection with this Master Agreement. Customer will execute
the additional documents that such vendors may require to enable CSG to deliver
the Incorporated Third Party Software to Customer. Except as otherwise provided
in Schedule H. CSG makes no warranty and provides no indemnity with respect to
----------
the Incorporated Third Party Software or the Third Party Rights.
9. OTHER THIRD PARTY SOFTWARE. Customer acknowledges that CSG will deliver the
System together with certain third party software other than Incorporated Third
Party Software, and that Customer's rights and obligations with respect to such
other third party software are subject to the license terms accompanying the
specific item of third party software. CSG is not a party to any license between
Customer and any licensor of such third party software, and CSG makes no
warranty and provides no indemnity with respect thereto.
10. TECHNICAL SERVICES WARRANTY. CSG represents and warrants that (i) CSG will
perform the Technical Services in a good workmanlike manner and (ii) the
Deliverables as defined in Schedule B will substantially conform to the
applicable specifications set forth in any executed Statement of Work attached
to Schedule B for a period of ninety days after the date of completion of the
Deliverables as set forth on the applicable Statement of Work. In case of breach
of this Technical Services' warranty or any other legal duty to Customer for the
Technical Services, CSG's exclusive liability, and Customer's exclusive remedy,
will be to obtain (i) the reperformance of the Technical Service or the
correction or replacement of the Deliverable or (ii) if CSG determines that such
remedies are not practicable, a refund of the Project Fees (as defined in
Schedule B) allocable to such Technical Service or Deliverable. ALL OTHER
WARRANTIES OR CONDITIONS, WHETHER EXPRESS OR IMPLIED (INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE,
TITLE OR NONINFRINGEMENT), ARE HEREBY DISCLAIMED.
-2-
<PAGE>
11. *** CSG will offer Customer the option to migrate to the *** , if and when
available, during the term of this Master Agreement. The cost of *** (exclusive
of client hardware, software, communication lines, migration, and implementation
costs) will be based on CSG's then current price or at a mutually agreeable
price to be determined upon acceptance of this option.
12. INDEMNITY.
(a) Indemnity. Except as provided in Exhibit C- I or in the case of any claim
---------
arising from or in connection with the Third Party Rights specified in Exhibit K
if an action is brought against Customer claiming that the Products infringe a
patent or copyright within the jurisdiction where the "Designated Environment'
(as defined in the applicable Schedules, attached hereto) is situated (the
---------
"Territory'), CSG. will defend Customer at CSG's expense and, subject to this
Section and Section 15, pay the damages and costs finally awarded against
Customer in the infringement action, but only if (i) Customer notifies CSG
promptly upon learning that the claim might be asserted (ii) CSG has sole
control over the defense of the claim and any negotiation for its settlement or
compromise and (iii) Customer takes no action that, in CSG's judgment, is
contrary to CSG's interest
(b) Alternative Remedy. If a claim described in Section 12(a.) may be or has
------------------
been asserted, Customer will permit CSG, at CSG's option and expense, to (i)
procure the right to continue using the Product, (ii) replace or modify the
Product to eliminate the infringement while providing functionally equivalent
performance or (iii) accept the return of the Product and refund to Customer the
amount of the fees actually paid to CSG and allocable for such Product, less
amortization based on a 5-year straight-line authorization schedule and a pro
rata share of any maintenance fees that Customer actually paid to CSG for the
period that such Product was not usable.
(c) Limitation. CSG shall have no indemnity obligation- to Customer under this
Section if the patent or copyright infringement claim results from (i) a
correction or modification of the Product not provided by CSG, (ii) the failure
to promptly install an Update or Enhancement provided by CSG (as defined in the
applicable Schedules, attached hereto) or (iii) the combination of the Product
-------------------
with other items not provided by CSG.
13. PAY-PER-VIEW LIABILITY. Notwithstanding anything to the contrary herein,
CSG's total liability with respect to each pay-per-view event for any and all
claims, damages, losses or expenses incurred by Customer arising directly or
indirectly out of CSG's processing of pay-per-view information shall be limited
to the amount of fees actually received by CSG from Customer applicable to such
pay-per-view processing services related to the specific event giving rise to
such liability.
14. LIMITATION OF REMEDIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS MASTER
AGREEMENT, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND
GUARANTEES WITH RESPECT TO THE PRODUCTS, THE INCORPORATED THIRD PARTY SOFTWARE,
OTHER THIRD PARTY SOFTWARE, AND THE SERVICES, WHETHER EXPRESS OR IMPLIED,
ARISING BY LAW, CUSTOM PRIOR ORAL OR WRITTEN STATE S BY CSG, ITS AGENTS OR
OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY,
SATISFACTION, FITNESS FOR PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT) ARE
HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. CUSTOMER ACKNOWLEDGES THAT THE
PRODUCTS AND SERVICES BEING PROVIDED AS AGREED TO HEREIN ENTAIL THE LIKELIHOOD
OF SOME HUMAN AND MACHINE ERRORS, OMISSIONS, DELAYS AND LOSSES, INCLUDING, BUT
NOT LIMITED TO, INADVERTENT MUTILATION OF DOCUMENTS AND LOSS OF DATA, WHICH MAY
GIVE RISE TO LOSS OR DAMAGE. CUSTOMER AGREES THAT CSG SHALL NOT BE LIABLE DUE TO
SUCH ERRORS, OMISSIONS, DELAYS AND LOSSES UNLESS CAUSED BY CSG'S GROSS
NEGLIGENCE OR WILLFUL AND INTENTIONAL MISCONDUCT.
15. NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES WILL CSG OR ITS RELATED
PERSONS BE LIABLE TO CUSTOMER OR CSG'S LICENSORS BE LIABLE TO CUSTOMER FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CUSTOMER'S CLAIMS OR
THOSE OF ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA,
GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, THE INCORPORATED PARTY SOFTWARE,
OR OTHER THIRD PARTY SOFTWARE, RESULTING REPORTS, THEIR ACCURACY OR THEIR
INTERPRETATION, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER
WORK OR IMPAIRMENT OF OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS
OR IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT
LIABILITY IN TORT OR OTHERWISE. IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH
CSG OR ITS LICENSORS MAY INCUR IN ANY ACTION OR PROCEEDING EXCEED THE AMOUNT
ACTUALLY PAID BY CUSTOMER ALLOCABLE TO THE SPECIFIC ITEM OR SERVICE THAT
DIRECTLY CAUSED THE DAMAGE. DESPITE THE FOREGOING EXCLUSION AND LIMITATION, THIS
SECTION WILL NOT APPLY TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES
LIABILITY.
__________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-3-
<PAGE>
16. TERM. This Master Agreement shall be effective on the date of execution and
acceptance by CSG (the "Effective Date"). Unless terminated pursuant to Section
17, this Master Agreement shall continue for a period of *** from the Effective
Date (the 'Initial Term") and *** unless either party gives the other party at
least *** prior written notice of such party's intent not to extend, but in any
case the term of this Master Agreement shall extend for the term of any license
granted under an executed Schedule hereto. The term of any specific license for
the Products and the term for any specific Services to be provided shall be set
forth in the Schedules attached hereto and shall be effective from the date set
forth therein and continue as provided for therein, unless terminated pursuant
to Sections 17 of this Master Agreement.
17. TERMINATION. This Master Agreement or any one or more of the Schedules
attached hereto may be terminated for cause as follows:
(a) If either party materially or repeatedly defaults in the performance of
their respective obligations hem-under, except for Customer's
obligation to pay fees, and fails either to substantially cure such
default within thirty (30) days after receiving written notice
specifying the default or, for those defaults which cannot reasonably
be cured within thirty (30) days, promptly commence curing such default
and thereafter proceed with all due diligence to substantially cure
such default then the party not in default may, by giving written
notice to the defaulting party, terminate this Master Agreement or any
one or more of its Schedules as of a date specified in such notice of
termination.
(b) If Customer fails to pay when due any amounts owed hereunder, then CSG
may, by giving written notice thereof to Customer, terminate this
Master Agreement or at CSG's option, CSG may terminate any one or more
of the Schedules attached hereto, as of a date specified in such notice
of termination.
(c) In the event that either party hereto becomes or is declared insolvent
or bankrupt is the subject of any proceedings related to its
liquidation, insolvency or for the appointment of a receiver or similar
officer for it makes an assignment for the benefit of all or
substantially all of its. creditors, or esters into an agreement for
the composition, on or readjustment of all or substantially all of its
obligations, then the other party hereto may, by giving written notice
thereof to such party, terminate this Master Agreement as of the date
specified in such notice of termination.
(d) If Customer or any of Customer's employees or consultants breach any
term or condition of any Schedule attached hereto for the license of
software or products distributed by or through CSG, including the
Incorporated Third Party Software, CSG may, at CSG's option, the Master
Agreement or any one or more of the Schedules attached hereto upon 30
days advance written notice and without judicial or administrative
resolution.
Upon the termination of the Master Agreement or any one or more of the Schedules
attached hereto, for any reason, all rights granted to Customer under this
Master Agreement or the terminated Schedule(s) will cease, and Customer will
promptly (i) purge all the Products from the Designated Environment and all of
Customer's other computer systems, storage media and other files; (ii) destroy
the Products and all copies thereof, (iii) deliver to CSG an affidavit which
certifies that Customer has complied with these termination obligations; and
(iv) pay to CSG all fees that are due pursuant to this Master Agreement
Notwithstanding the foregoing, if only one or more of the Schedules are
terminated, Customer must comply with the requirements of this paragraph only
with respect to the specific Products set forth in the terminated Schedule(s).
18. TERMINATION ASSISTANCE. Upon expiration or earlier termination of this
Master Agreement or termination of Schedule A by either party for any reason,
-----------
CSG will provide Customer, reasonable termination assistance for up to ninety
(90) days relating to the transition to another vendor. This termination
assistance will be provided to Customer at CSG's then standard rates unless CSG
has materially defaulted under the terms of this Master Agreement. If this
Master Agreement expires or is terminated earlier by CSG, then Customer will pay
CSG, in advance, on the first day of each calendar month and as a condition to
CSG's obligation to provide termination assistance to Customer during that
month, an amount equal to CSG's reasonable estimate of the total amount payable
to CSG for such termination assistance for that month.
19. CONFIDENTIALITY.
(a) Definition. Customer and CSG will provide to each other or will come into
possession information relating to each other's business, CSG's Products and
Services and the Incorporated Third Party Software which is considered
confidential (the "Confidential Information"). Customer acknowledges that
confidentiality restrictions are imposed by CSG's licensors or vendors.
Confidential Information shall include, without limitation, all of Customer's
and CSG's trade secrets, and all know-how, design, invention, plan or process
and Customer's data and information relating to Customers and CSG's respective
business operations, services, products, research and development, CSG's
vendors'
_______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-4-
<PAGE>
or licensors' information and products, and all other information that is marked
"confidential" or "proprietary" prior to or upon disclosure, or which, if
disclosed orally, is identified by the disclosing party at the time as being
confidential or proprietary and is confirmed by the disclosing party as being
Confidential Information in writing within thirty (30) days after its initial
disclosure.
(b) Restrictions. Each party shall use its reasonable best efforts to maintain
the confidentiality of such Confidential Information and not show or otherwise
disclose such Confidential Information to any third parties, including, but not
limited to, independent contractors and consultants, without the prior written
consent of the disclosing party. Each party shall use the Confidential
Information solely for purposes of performing its obligations under this Master
Agreement ***. Customer will not allow the removal or defacement of any
confidentiality or proprietary notice placed on any CSG documentation or
products. The placement of copyright notices on these items will not constitute
publication or otherwise impair their confidential nature.
(c) Disclosure. Neither party shall have any obligation to maintain the
confidentiality of any Confidential Information which: (i) is or becomes
publicly available by other than unauthorized disclosure by the receiving party;
(ii) is independently developed by the receiving party; or (iii) is received
from a third parry who has lawfully obtained such Confidential Information
without a confidentiality restriction. If required by any court of competent
jurisdiction or other governmental authority, the receiving party may disclose
to such authority, data, information or materials involving or pertaining to
Confidential Information to the extent required by such order or authority,
provided that the receiving party shall first have used its best efforts to
obtain a protective order or other protection reasonably satisfactory to the
disclosing party sufficient to maintain the confidentiality of such data
information or materials. If an unauthorized use or disclosure of Confidential
Information occurs, the parties will take all steps which may be available to
recover the documentation and/or products and to prevent their subsequent
unauthorized use or dissemination.
(d) Limited Access. Each party shall limit the use and access of Confidential
--------------
Information to such party's bona fide employees or agents, including independent
auditors and required governmental agencies, who have a need to know such
information for purposes of conducting the receiving party's business and who
agree to comply with the use and nondisclosure restrictions applicable to the
products and documentation under this Master Agreement. If requested, receiving
party shall cause such individuals to execute appropriate confidentiality
agreements in favor of the disclosing party. Each party shall notify all
employees and agents who have access to Confidential Information or to whom
disclosure is made that the Confidential Information is the confidential,
proprietary property of the disclosing party and shall instruct such employees
and agents to maintain the Confidential Information in confidence.
20. SURVIVAL. Termination of this Master Agreement shall not impair either
party's then accrued rights, obligations, liabilities or remedies.
Notwithstanding any other provisions of this Master Agreement to the contrary,
the terms and conditions of Sections 7, 8, 9, 10, 13, 14, 15, 17, 18, 19, 20,
23, and 30 shall survive the termination of this Master Agreement
21. ***
22. NATURE OF RELATIONSHIP. CSG, in furnishing Services and licensing Products
to Customer hereunder, is acting only as an independent contractor. CSG does not
undertake by this Master Agreement or otherwise to perform any obligation of
Customer, whether regulatory or contractual, or to assume any responsibility for
Customer's business or operations. Customer understands and agrees that CSG may
perform similar services for third parties and license same or similar products
to third parties. Nothing in this Master Agreement shall be deemed to constitute
a partnership or joint venture between CSG and Customer. Neither party shall
hold itself out as having any authority to enter into any contract or create any
obligation or liability on behalf of or binding upon the other party.
23. OWNERSHIP. All trademarks, service marks, patents, copyrights, trade secrets
and other proprietary rights in or related to the Products, the "Deliverables"
as defined under Schedule B, the Incorporated Third Party Software and other
----------
third party software (collectively the "Software Products") are and will remain
the exclusive property of CSG or its licensors, whether or not specifically
recognized or perfected under applicable law. Customer will not take any action
that jeopardizes CSG's or its licensor's proprietary rights or acquire any right
in the Software Products, except the limited use rights specified in the
Schedules to this Master Agreement. CSG or its licensor will own all rights in
any copy, translation, modification, adaptation or derivation of the Software
Products, including any improvement or development thereof Customer will obtain,
at CSG's request, the execution of any instrument that may be appropriate to
assign these rights to CSG or its designee or perfect these rights in CSG's or
its licensor's name.
24. RESTRICTED RIGHTS. Use, duplication or disclosure by the U.S. Government or
any of its agencies is subject to restrictions set forth in the Commercial
Computer Software and Commercial Computer Software Documentation clause at FAR
227.7202 and/or the Commercial Computer Software Restricted Rights clause at FAR
52.227.19(c) CSG Systems, Inc., 2525 North 117th Street, Omaha, Nebraska 68164.
_________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-5-
<PAGE>
25. INSPECTION. During the term of this Master Agreement and for *** CSG or its
representative may, upon prior notice to Customer, inspect the files, computer
processors, equipment and facilities of Customer during normal working hours to
verify Customer's compliance with this Master Agreement While conducting such
inspection, CSG or its representative will be entitled to copy any item that
Customer may possess in violation of this Master Agreement.
26. FORCE MAJEURE. Neither party will be liable for any failure or delay in
performing an obligation under this Master Agreement that is due to causes
beyond its reasonable control, including, but not limited to, fire, explosion,
epidemics, earthquake, lightening, failures or fluctuations in electrical power
or telecommunications equipment, accidents, floods, acts of God, the elements,
war, civil disturbances, acts of civil or military authorities or the public
enemy, fuel or energy shortages, acts or omissions of any common carrier,
strikes, labor disputes, regulatory restrictions, restraining orders or decrees
of any court, changes in law or regulation or other acts of governmental,
transportation stoppages or slowdowns or the inability to procure parts or
materials. These causes will not excuse Customer from paying accrued amounts due
to CSG through any available lawful means acceptable to CSG.
27. ASSIGNMENT. Neither party may assign, delegate or otherwise transfer this
Master Agreement or any of its rights or obligations hereunder without the other
party's prior approval. Any attempt to do so without such approval will be void.
Notwithstanding the foregoing, CSG may assign this Master Agreement, upon notice
to Customer, to a related or unrelated person in connection with a sale, on of
CSG's business, in whole or in part, and Customer hereby consents to such
acquisition, consolidation or other assignment in advance.
28. NOTICES. Any notice or approval required or permitted under this Master
Agreement will be given in writing and will be sent by telefax, courier or mail
postage prepaid, to the address specified below or to any other address that may
be designated by prior written notice. Any notice or approval delivered by
telefax (with answer back) will be deemed to have been received the day it is
sent. Any notice or approval sent by courier will be deemed received one day
after its date of posting. Any notice or approval sent by mail will be deemed to
have been received on the 5th business day after its date of posting.
If to Customer: If to CSG:
21st Century Cable TV, Inc. CSG Systems Inc.
350 North Orleans, Suite 600 2525 N. 11 7th Ave.
Chicago, Illinois 60654 Omaha, NE 68164
Tel: (312)470-2100 Fax: (312 470-2111 Tel: (402) 431-7000 Fax: (402)
431-7278
Attn: Richard Wiegand-Moss Attn: President and copy to
Chief Operating Officer Corporate Counsel
29. ARBITRATION.
(a) General. Any controversy or claim arising out of or relating to this
-------
Master Agreement or the existence, validity, breach or termination thereof,
whether during or after its term, will be finally settled by compulsory
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA'), as modified or supplemented under this Section.
(b) Proceeding. To initiate arbitration, either party will file the
----------
appropriate notice at the Regional Office of the AAA in Omaha, Nebraska. The
arbitration proceeding will take place in Omaha, Nebraska. The parties will in
good faith agree on a sole arbitrator. If the parties are unable to agree on an
arbitrator, the arbitration panel will consist of three (3) arbitrators, one
arbitrator appointed by each party and a third neutral arbitrator appointed by
the two arbitrators designated by the parties. Any communication between a party
and any arbitrator will be directed to the AAA for transmittal to the
arbitrator. The parties expressly agree that the arbitrators will be empowered
to, at either party's request, grant injunctive relief.
(c) Award. The arbitral award will be the exclusive remedy of the parties for
-----
all claims, counterclaims, issues or accountings presented or plead to the
arbitrators. The award will (i) be granted and paid in U.S. dollars exclusive of
any tax, deduction or offset and (ii) include interest from the date of that the
award is rendered until it is fully paid, computed at the maximum rate allowed
by applicable law. Judgment upon the arbitral award may be entered in any court
that has jurisdiction thereof. Any additional costs, fees or expenses incurred
in enforcing the arbitral award will be charged against the party that resists
its enforcement.
(d) Legal Actions. Nothing in this Section will prevent either party from
-------------
seeking interim injunctive relief against the other party in the courts having
jurisdiction over the other party. Nothing in this Section will prevent CSG from
filing any debt collection action against Customer in the local courts.
____________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-6-
<PAGE>
30. MISCELLANEOUS. All notices or approvals required or permitted under this
Master Agreement must be given in writing. Any waiver or modification of this
Master Agreement will not be effective unless executed in writing and signed by
CSG. This Master Agreement will bind Customer's successors-in-interest. This
Master Agreement will be governed by and interpreted in accordance with the laws
of Nebraska, U.S.A., to the exclusion of its conflict of laws provisions. If any
provision of this Master Agreement is held to be unenforceable, in whole or in
part, such holding will not affect the validity of the other provisions of this
Master Agreement unless CSG in good faith deems the unenforceable provision to
be essential in which case CSG may terminate this Master Agreement effective
immediately upon notice to Customer. This Master Agreement together with the
Schedules, Exhibits and attachments hereto which are hereby incorporated into
this Master Agreement constitutes the complete and entire statement of all
conditions and representations of the agreement between CSG and Customer with
respect to its subject matter and supersedes all prior writings or
understandings.
THIS AGREEMENT IS NOT EFFECTIVE UNTIL SIGNED ON BEHALF OF BOTH PARTIES.
IN WITNESS WHEREOF, the parties have executed this Master Agreement the day and
year first above written.
CSG Systems, Inc. ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
----------------------------- ------------------------------
Name: George F. Haddix Name: Richard Wiegand-Moss
--------------------------- ----------------------------
Title: President Title: Chief Operating Officer
-------------------------- ---------------------------
-7-
<PAGE>
SCHEDULE A
CCS SUBSCRIBER BILLING SERVICES
1. CCS SERVICES. Subject to the terms and conditions of the Master Agreement
and for the fees described in Schedule F, ***. The CCS Services will provide
----------
Customer *** as more specifically described in the user documents: the User
Guide, User Data File Manual, User Training Manual, Conversion Manual,
Operations Guide, and Customer Bulletins issued by CSG (the "Documentation").
Customer's personnel shall ***. CSG and Customer acknowledge and agree that the
Documentation describing the CCS Services is subject to ongoing review and
modification from time to time.
2. COMMUNICATIONS SERVICES AND FEES. CSG shall provide, at Customer's expense,
***. Customer shall pay all fees and charges in connection with the installation
and use of and peripheral equipment related to the *** in accordance with the
fees described in Schedule F attached hereto.
----------
3. IMPLEMENTATION/CONVERSION SERVICES AND FEES. CSG shall provide services as
described on Exhibit A-2 attached hereto in connection with Customer's
conversion of each System Site and for those added by mutual agreement of the
parties to CSG's data processing system subsequent to the execution of this
Master Agreement (the "Implementation/Conversion Services'). For System Sites
added to Exhibit A- I subsequent to the Effective Date of the Master Agreement,
Customer shall pay CSG the fees set forth in Schedule F for the performance of
-----------
the Implementation/Conversion Services.
4. DECONVERSION SERVICES AND FEES. If Customer sells, transfers, assigns or
disposes of any of the assets of or any ownership or management interest in any
System Site (the "Disposed Site(s)"), Customer agrees to pay CSG *** which
amounts shall be due and ***. CSG shall be under no obligation or liability to
provide any deconversion tapes or records until all amounts due hereunder, and
as otherwise provided in the Master Agreement shall have been paid in full.
5. OPTIONAL AND ANCILLARY SERVICES. At Customer's request, CSG shall provide
optional and ancillary services, including but not limited to any described on
Schedule F at CSG's then-current prices, or as may otherwise be set forth in
Schedule F. and where applicable on the terms and conditions set forth in
- ----------
separately executed Schedules to the Master Agreement.
6. CUSTOMER INFORMATION. Any original documents, data and files provided to CSG
hereunder by Customer ('Customer Data") are and shall remain Customer's
property, and upon termination of this Master Agreement for any reason or
deconversion of any System Site, such Customer Data shall be returned to
Customer by CSG, subject to the payment of CSG's then-current rates for
processing and delivering the Customer Data, any applicable deconversion fees
required under Section 4 hereof and all unpaid charges for services and
equipment if any, including late charges incurred by Customer. Customer Data
will not be utilized by CSG for any purpose other than those purposes related to
rendering the services to Customer under the Master Agreement. Data to be
returned to Customer includes: Subscriber Master File (including Work Orders,
Converters and General Ledger), Computer-Produced Reports (reflecting activity
during period of 90 days immediately prior to Schedule A termination), House
Master File, Any other related data or files held by CSG on behalf of Customer.
7. PROCESSING MINIMUM. If at any time the fees and charges for the CCS
Services incurred as computed pursuant to Schedule F are less than a minimum of
*** in processing fees *** (the "Minimum"), Customer agrees to pay the Minimum
for each System Site.
8. DISCONTINUANCE FEE. CSG has determined the fees for the CCS Services
hereunder based upon certain assumed volumes of processing activity for the
System Sites and the length of the term of this Schedule A- Customer
acknowledges that, without the certainty of revenue promised by the commitments
set forth in this Master Agreement, CSG would have been unwilling to provide the
CCS Services at the fees set forth in Schedule F. Because of the difficulty in
ascertaining CSG's actual damages for a termination or other breach of this
Master Agreement or Schedule A by Customer resulting in a termination of this
--------
Master Agreement or Schedule A before the expiration of the then-current term
with respect to one or more System Sites, Customer agrees that prior to such
termination and in addition to all other amounts then due and owing to CSG,
Customer will pay to CSG (as a contract discontinuance fee and not as a penalty)
an amount equal to ***. If this Schedule A is terminated with respect to less
--------------
than all of the System Sites, the ***. Customer acknowledges and agrees that
the Discontinuance Fee is a reasonable estimation of the actual damages which
CSG would suffer if CSG were to fail to receive the amount of processing
business contemplated by this Schedule A.
----------
9. Term. The first day of the calendar month in which the CCS Services commence
shall be referred to as the "Commencement Date." The CCS Services shall continue
from the Commencement Date for a period of ***.
___________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-8-
<PAGE>
Agreed and accepted this ____ day of _________, 1997, by:
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
------------------------------ -------------------------------------
-9-
<PAGE>
EXHIBIT A-1
SYSTEMS SITES ESTIMATED IMPLEMENTATION
CONVERSION DATE
Chicago, Illinois
-10-
<PAGE>
EXHIBIT A-2
CCS Implementation and Conversion
***
_________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-11-
<PAGE>
SCHEDULE B
CSG TECHNICAL AND CONSULTING SERVICES
-------------------------------------
1. GENERAL. Subject to the terms and conditions of the Master Agreement and for
the fees and expenses described below, Customer hereby hires CSG, and CSG hereby
agrees, to provide the design, development and/or other consulting services
described in the statement of Works contemplated under Section 2, which may
include services by *** to Customer as its independent contractor.
2. TECHNICAL SERVICES.
(a) Reasonable Efforts. CSG will use its reasonable commercial efforts to
----------
perform all Technical Services in a timely and professional manner satisfactory
to Customer and in accordance with the applicable Statement of Work. (b)
Projects Schedules. CSG and Customer will execute a schedule substantially
- ------------------
similar to Exhibit B-1 (the "Statement of Work") for each design, development
and/or other consulting service that Customer wants CSG to undertake. CSG and
Customer acknowledge that all Statement of Works will form an integral part of
this Schedule B.
----------
(c) Location and Access. CSG may perform the Technical Services at Customer's
------------
premises, CSG's premises or such other premises that Customer and CSG may deem
appropriate. Customer will permit CSG to have reasonable access to Customer's
premises, personnel and computer equipment for the purposes of performing the
Technical Services at, Customer's premises.
(d)Insurance. CSG will be solely responsible for obtaining and maintaining
appropriate insurance coverage for its activities under this Schedule B,
----------
including, but not limited to, comprehensive general liability (bodily injury
and property damage) insurance and professional liability insurance.
3. CONSIDERATION.
(a) Project Fees. In consideration for performing the Technical Services,
------------
Customer will pay CSG the fee that may be contemplated under the Statement of
Works (the "Project Fees").
(b) Reimbursable Expenses Unless otherwise contemplated under the Statement of
---------------------
Work, Customer will ***.
(c) Payment. Customer will pay the Project Fees to CSG according to the
-------
applicable terms set forth in the Statement of Work. Unless otherwise
contemplated in the Statement of Work, Customer will pay CSG the Reimbursable
Expenses within *** after the receipt of CSGs invoice and supporting receipts.
***.
4. CSG RIGHTS. Customer acknowledges that all patents, copyrights, trade
secrets or other proprietary rights in or to the work product that CSG may
create for Customer under this Schedule B (the 'Deliverables"), including, but
not limited to, any ideas, concepts, inventions or techniques that CSG may use,
conceive or first reduce to practice in connection with the Technical Services,
are and will be the exclusive property of CSG, except as and to the extent
otherwise specified in the applicable Statement of Work. During and after the
term of this Schedule B. CSG and Customer will execute the instruments that may
----------
be appropriate or n to give full legal effect to this Section 4.
5. DELIVERY OF ITEMS. Upon the expiration or termination of this Schedule B
for any reason, Customer will promptly pay CSG the Project Fees and Reimbursable
Expenses that may be due and outstanding for the Technical Services and
Deliverables that CSG has performed, and CSG will deliver to Customer all
notebooks, documentation and other items that contain, in whole or in part any
Confidential Information that Customer disclosed to CSG in performance of the
Technical Services under this Schedule B.
----------
6. TERM. The term of this Schedule B shall be for a period of ***, but in any
case will extend for the term of any executed Statement of Work.
Agreed and accepted this 28th day of May, 1997, by:
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. (Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
---------------------------- ------------------------------------
EXHIBIT B-1.........SAMPLE STATEMENT OF WORK
_______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-12-
<PAGE>
EXHIBIT B-1
STATEMENT OF WORK (sample form)
THIS STATEMENT OF WORK is made as of 1997, between CSG Systems, Inc. ('CSG"),
and 21st Century Cable TV, Inc. ("Customer"), pursuant to Schedule B of the
Master Agreement that CSG and Customer executed as of _________________, 1997,
and of which this Statement of Work forms an integral part.
OBJECTIVE:
- ----------
PROCEDURES:
- -----------
TIMETABLE: Commencement Date: ____________________
- ----------
Completion Date: ______________________
DELIVERABLES:
- -------------
PROJECT FEES AND PAYMENT TERMS:
- -------------------------------
IN WITNESS WHEREOF, CSG and Customer cause this Statement of Work to be duly
executed below.
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: _____________________________ By: ____________________________________
Name: ___________________________ Name: __________________________________
Tide: ___________________________ Title: _________________________________
Date: ___________________________ Date: __________________________________
-13-
<PAGE>
SCHEDULE C
CCS PRODUCTS SOFTWARE LICENSE
-----------------------------
***
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
---------------------------- -------------------------------------
EXHIBIT C-I PRODUCT SCHEDULE
EXHIBIT C-2 DESIGNATED ENVIRONMENT
EXHIBIT C-3 INSTALLATION, MAINTENANCE AND SUPPORT
____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-14-
<PAGE>
EXHIBIT C-1
***
___________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-15-
<PAGE>
EXHIBIT C-2
***
______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-16-
<PAGE>
EXHIBIT C-3 (page 1 of 3)
***
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-17-
<PAGE>
SCHEDULE F
FEE SCHEDULE
------------
***
__________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-18-
<PAGE>
SCHEDULE G
***
1. SERVICES. Subject to the terms and conditions of the Master Agreement CSG
will provide to Customer, and Customer will purchase from CSG, *** set forth in
this Schedule G for ***.
----------
2. POSTAGE. CSG agrees to *** ("Subscriber Statements"), ***. Customer shall
*** incurred in the performance of the *** by CSG on behalf of Customer.
3. COMMUNICATIONS SERVICES. CSG shall provide, at Customer's expense, ***.
4. ANCILLARY SERVICES. At Customer's request, CSG shall provide the ancillary
services described in Schedule F attached hereto (the "Ancillary Services") at
----------
the rates described in Schedule F.
-------------
5. ***. Presentation Services. If during the original term of the Master
Agreement, Customer provides written notice to CSG of its intent to utilize ***
"Customer's Intellectual Property" means the trademarks, service marks, other
indicia of origin, copyrighted material and art work owned or licensed by
Customer that CSG may use in connection with designing, producing and mailing
*** and performing its other obligations pursuant to this Agreement. "CSG
Intellectual Property" means trademarks, service marks, other indicia of origin,
copyrighted material and art work owned or licensed by CSG and maintained in
CSG's public library that may be used in connection with designing, producing
and mailing ***.
(a) Development and Production of ***. CSG will perform the design,
---------------------------------
development and programming services related to design and use of the ***(the
"Work") and create the work product deliverables (the "Work Product") set forth
in a separately executed and mutually agreed upon *** Work Order (the "Work
Order") after the effective date set forth on the Work Order. The ***. Except
with respect to Customer's Intellectual Property, Customer agrees that the Work
and Work Product shall be the sole and exclusive property of CSG. Customer shall
have no proprietary interest in the Work Product or in CSGs billing and
management information software and technology and agrees that the Work Product
is not a work specially ordered and commissioned for use as a contribution to a
collective work and is not a work made for hire pursuant to United States
copyright law. After CSG has completed the Work and the Work Product, CSG will
produce *** for Customer.
(b) Supplies. CSG will suggest and Customer will select the type and quality
--------
of the paper stock, carrier envelopes and remittance envelopes for the *** (the
"Supplies"). CSG shall purchase Customer's requirements of Supplies necessary
for production and mailing of the***. CSG shall charge Customer the rates set
forth in Schedule F for purchase of Supplies.
----------
(c) License of Customer's Intellectual Property. Customer licenses to CSG to
-------------------------------------------
use all of Customer's Intellectual Property necessary to design, produce and
mail the *** and perform CSG's other rights and obligations pursuant to Section
5(a) of this Schedule G, including, but not limited to, the Intellectual
Property listed in the Work Order. CSG shall have the right by notice to
Customer to cease use of any of Customer's Intellectual Property on *** at any
time. Customer represents and warrants that it owns or has licensed all
Customer's Intellectual Property and has full power and authority to grant CSG
the license set forth herein and that CSG's use of Customer's Intellectual
Property on the *** will not constitute a misuse or infringement of the
Customer's Intellectual Property or an infringement of the rights of any third
party. Customer will use best efforts to maintain its rights to use and license
Customer's Intellectual Property and will immediately advise CSG of the loss of
Customer's right to use any Customer's Intellectual Property and will advise CSG
of all copyright and other notices that must be used in connection with
Customer's Intellectual Property and of any restrictions on use of Customer's
Intellectual Property relevant to CSG.
(d) Indemnification Relating to ***. Customer shall indemnify, defend and hold
-------------------------------
CSG harmless from any claims, demands, liabilities, losses, damages, judgments
or settlements, including all reasonable costs and expenses related thereto
(including attorneys' fees), directly or indirectly resulting from Customer's
breach of any representation or warranty under this Section 5, Customer's
Intellectual Property, the Work Product, and the printing and mailing of ***,
except for those arising out of CSG Intellectual Property.
6. PER CYCLE MINIMUM. As of the Commencement Date as defined in Section 9
below, for each month that this Agreement is in effect, Customer will maintain
per each billing cycle a minimum of *** on the CSG System. Per System Site,
Customer will have a minimum of ***.
_______________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-19-
<PAGE>
7. Discontinuance Fee. CSG has determined the fees for the CCS Services
hereunder based upon certain assumed volumes of processing activity for the
System Sites and the length of the term of this Schedule A. Customer
----------
acknowledges that, without the certainty of revenue promised by the commitments
set forth in this Master Agreement CSG would have been unwilling to provide the
CCS Services at the fees set forth in Schedule F. Because of the difficulty in
ascertaining CSG's actual damages for a termination or other breach of this
Master Agreement or Schedule A by Customer resulting in a termination of this
--------
Master Agreement or Schedule A before the expiration of the then-current term
with respect to one or more System Sites, Customer agrees that prior to such
termination and in addition to all other amounts then due and owing to CSG,
Customer will pay to CSG (as a contract discontinuance fee and not as a penalty)
an amount equal to ***. If this Schedule A is terminated with respect to less
----------
than all of the System Sites, ***. Customer acknowledges and agrees that the
Discontinuance Fee is a reasonable estimation of the actual damages which CSG
would suffer if CSG were to fail to receive the amount of processing business
contemplated by this Schedule A.
----------
8. DEPOSIT. At least seven (7) days prior to the Commencement Date of the ***
set forth in Section 9 below, Customer shall pay CSG a security deposit (the
"Deposit") for the payment of the expenses described in Sections 2 and 3 of this
----
Schedule G (the "Disbursements"). The Deposit will equal the estimated amount
- ----------
of Disbursements for *** as determined by CSG based upon the project volume of
applicable services to be performed monthly by CSG. If Customer incurs
Disbursements greater than the Deposit for any month, Customer shall, within
thirty (30) days of receipt of a request from CSG to increase the Deposit, pay
CSG the additional amount to be added to the Deposit. If Customer fails to pay
the additional amount requested within such 30-day period, CSG may terminate
this Master Agreement as provided for in Section 17. Upon written request from
Customer, CSG will return to Customer a portion of the Deposit if the
Disbursements incurred by Customer on a monthly basis are less than the Deposit
for three (3) consecutive months. In addition to the foregoing, CSG shall have
the right to apply the Deposit to the payment of any invoice from CSG which
remains unpaid during the term of this Agreement, and Customer agrees to
replenish any such Deposit amount as set forth above. Any portion of the
Deposit that remains after the payment of all amounts due to CSG following the
termination or expiration of this Master Agreement will be returned to Customer.
Customer shall not be entitled to receive interest on the Deposit while it is
maintained by CSG.
9. TERM. The first day of the calendar month in which the *** commence shall
be referred to as the Commencement Date." The *** shall continue for a period of
*** from the Commencement Date.
Agreed and accepted this ____ day of ______, 1997, by:
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. ('Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
------------------------------ -----------------------------
_______________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-20-
<PAGE>
Exhibit G-1
-----------
System Sites
Chicago, Illinois
-21-
<PAGE>
SCHEDULE H
INCORPORATED THIRD PARTY SOFTWARE AND LICENSES
AND
THIRD PARTY RIGHTS
ADDITIONAL TERMS AND CONDITIONS
A. INCORPORATED THIRD PARTY SOFTWARE
- ------------------------------------
The following terms and conditions supplement, and where in conflict, supersede
the terms and conditions contained in the Agreement but solely with respect to
the identified item of Incorporated Third Party Software.
There is no Incorporated Third Party Software in the CCS Products.
B. THIRD PARTY RIGHTS
- ---------------------
The following terms and conditions supplement, and where in conflict supersede
the terms and conditions contained in the Master Agreement and any Schedule, but
solely with respect to the Third Party Rights described below.
CSG may provide Customer with Products, Incorporated Third Party Software and
Services subject to patent or copyright licenses that third parties, including
***. Customer acknowledges that Customer receives no express or implied license
under the Third Party Licenses other than the right to use the Products,
Incorporated Third Party Software and Services, as provided by CSG, in the cable
system operator industry. Any modification of or addition to the Products,
Incorporated Third Party Software or Services or combination with other
software, hardware or services not made or provided by CSG is not licensed under
the Third Party Rights, expressly or implicitly, and may subject Customer and
any third party supplier or service provider to an infringement claim. *** other
than through the authorized use of the Products, Incorporated Third Party
Software or Services as provided by CSG.
Agreed and accepted this _____ day of _______________1997, by:
CSG SYSTEMS, INC. (-CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
--------------------------- -------------------------------------
_____________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-22-
<PAGE>
SCHEDULE I
***
1. ***. Subject to the terms and conditions of the Master Agreement for the
term set forth in Section 10 below and for the fees set forth in Schedule F,
----------
subsequent to the Effective Date of the Master Agreement once Customer provides
CSG with written notice of its desire to obtain the ***
2. ADDITIONAL SERVICES. In the event Customer desires for CSG to provide other
services in addition to the Basic Services set forth in Section 1, the parties
agree to negotiate in good faith with respect to the terms and conditions
(including without limitation, pricing) on which such services shall be
provided. Such services include, but are not limited to (i) special computer
runs or reports, special accounting and information applications; and (ii) data
processing and related forms and supplies and equipment other than those
provided as standard pursuant to this Agreement (die "Additional Services").
The description of any such additional services, and any other terms and
conditions related thereto, shall be set forth in an amendment to , this
Agreement signed and dated by both parties. Unless otherwise agreed in writing
by the parties in such amendment any such additional services shall be subject
to the terms of this Schedule 1.
----------
3. ***
4. SUBSCRIBER AUTHORIZATION. Customer shall obtain from each Subscriber ***.
5. REVIEW OF REPORTS. To maintain system integrity, Customer will inspect and
review all reports and output created from information transferred or delivered
by CSG and reject all incorrect reports within ***. Failure to timely reject any
report or output shall constitute acceptance thereof, and Customer shall be
deemed to have waived its rights and assumed all risks with respect thereto.
6. COMPLIANCE WITH LAWS. Customer will comply in all material respects with
all federal state or local km and regulations pertaining to electronic payment
processing. In the event of clear evidence of significant fraudulent activity
by Customer, the Basic Services and any Additional Services will be discontinued
immediately and any funds on the way to Customer will be impounded immediately.
7. COLLECTION DATA. Customer shall update subscriber account balance
information to provide necessary data for the Basic Services and any Additional
Services and shall ensure through periodic checks and updates that the data is
current and accurate at all times.
8. SETTLEMENT OF RETURNS. Customer is ultimately responsible (a) for adequately
funding the reserve account when using the weekly or monthly settlement process
as described in Schedule A herein, and (b) when using the daily settlement
process as described in Exhibit 1-1 herein, to cover on a daily basis all return
debits incurred by Vendor (as defined in Exhibit I-1) and in the event
collections have ceased, Customer shall be obligated to pay within ten (10) days
any unfunded return amounts not funded to cover all remaining return debits.
9. INDEMNIFICATION BY CUSTOMER. Customer shall indemnify. defend and hold CSG,
its Vendors (as defined in Exhibit 1-1), shareholders, directors, officers and
employees harmless from any and all third party claims, losses, actions, suits,
proceedings or judgments, including, without limitation, costs and reasonable
attorneys' fees, incurred by or assessed against CSG resulting, in whole or in
part, from (i) any and all acts or omissions of Customer, its officers,
directors, shareholders, employees and agents, (ii) any action or failure to act
by CSG in reliance on any Customer instruction, approval, election, decision,
action, inaction, omission or nonperformance relating to the Services, or (iii)
any information or data provided to CSG by Customer, provided, however, Customer
shall not be required to indemnify CSG if such claims arise out of, relates to,
or results from the gross negligence or intentional misconduct of CSG.
____________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-23-
<PAGE>
10. RELIANCE ON INFORMATION. CSG shall be entitled to rely upon and act in
accordance with any instructions, guidelines or information provided to CSG by
Customer, which are given by such persons as have actual or apparent authority
to provide such instructions, guidelines or information and shall incur no
liability in doing so.
11. TERM . This Schedule I shall be effective on the date of commencement of
the *** Services and continue for a period *** years.
Agreed and accepted this _____ day of _____________, 1997, by:
CSG SYSTEMS, INC. ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
------------------------------ ------------------------------------
EXHIBIT 1-1......Basic Services
______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-24-
<PAGE>
EXHIBIT I-1
***
___________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-25-
<PAGE>
SCHEDULE K
***
1. ***.
2. DEFINITIONS RELATING TO INTELLECTUAL PROPERTY. "Customer's Intellectual
Property" means the trademarks, service marks, other indicia of origin,
copyrighted material and art work owned or licensed by Customer that CSG may use
in connection with designing, producing and operating *** and performing its
other obligations pursuant to this Agreement 'CSG Intellectual Property" means
trademarks, servicemarks, other indicia of origin, copyrighted material and art
work owned or licensed by CSG and maintained in CSG's public library that may be
used in connection with designing, producing and operating ***.
3. DEVELOPMENT AND PRODUCTION OF ***. CSG will perform the design, development
and programming services related to design and use of *** and create the work
product deliverables (the "Work Product") set forth in a separately executed
and mutually agreed upon *** work order in the form set forth in Exhibit K-3
attached hereto (the "Work Order") after the Effective Date set forth on the
Work Order. *** will contain the CSG Intellectual Property and the Customer
Intellectual Property set forth on the Work Order. Customer shall pay CSG the
development fee for the Work Product set forth on the Work Order. After CSG has
completed the Work Product CSG will produce and operate *** for Customer.
4. OWNERSHIP OF ***. Except with respect to Customer Intellectual Property,
Customer agrees that all patents, copyrights, trade secrets and other
proprietary rights in or to the Work Product shall be the sole and exclusive
property of CSG, whether or not specifically recognized or perfected under
applicable law. Customer shall not have or acquire any proprietary interest in
the Work Product, including the actual format or layout for Customer or in CSG's
billing and management information software and technology (the "CCS System").
Customer agrees that the Work Product are not works specially ordered and
commissioned for use as a contribution to a collective work and are not works
made for hire pursuant to U.S. Copyright Law. CSG hereby grants to Customer, and
Customer accepts from CSG, a non-exclusive, non-transferable, paid up, royalty
fee and perpetual right to use, reproduce, copy and display the design and
format of the completed Work Product.
5. CUSTOMER'S INTELLECTUAL PROPERTY REPRESENTATIONS. Customer acknowledges that
CSG may use all of Customer's Intellectual Property necessary to design, produce
and operate *** and perform CSG's other rights and obligations pursuant to
Schedule K of this Master Agreement CSG shall have the fight to cease use of any
of Customer's Intellectual Property on *** at any time, upon notice to Customer.
Customer represents and warrants that it owns or has licensed all Customer's
Intellectual Property, and that CSG's use of Customer's Intellectual Property on
***. Pages will not constitute a misuse or infringement of the Customer's
Intellectual Property, or an infringement of the rights of any third party.
Customer will use best efforts to maintain its rights to use and license
Customer's Intellectual Property, will immediately advise CSG of the loss of
Customer's right to use any Customer's Intellectual Property, and will advise
CSG of all copyright and other notices that must be used in connection with
Customer's Intellectual Property and of any restrictions on use of Customer's
Intellectual Property relevant to CSG.
6. INDEMNIFICATION RELATING TO ***. Notwithstanding anything to the contrary
set forth in this Master Agreement Customer shall indemnify, defend and hold CSG
harmless from any claims, demands, liabilities, losses, damages, judgments or
settlements, including all reasonable costs and expenses related thereto
(including attorneys' fees), directly or indirectly resulting from Customer's
breach of any representation or warranty under Section 5 of this Schedule K. and
----------
from any claim arising from CSG's actions on behalf of Customer in designing the
Work Product producing and operating of *** or otherwise relating to this
Schedule K, except for those claims arising from CSG Intellectual Property.
- ----------
____________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-26-
<PAGE>
7. TERM. The day this Schedule K is executed as set forth below shall be
referred to as the "Commencement Date." This Schedule K shall continue from the
Commencement Date for a period of ***.
Agreed and accepted this ______ day of ____________, 1997, by:
CSG SYSTEMS, INC., ("CSG") 21ST CENTURY CABLE TV, INC. ("Customer")
By: /s/ George F. Haddix By: /s/ Richard Wiegand-Moss
---------------------------- -------------------------------------
EXHIBIT K-1....*** Description of Service Service Bureau
EXHIBIT K-2....Word Order (sample format)
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-27-
<PAGE>
EXHIBIT K-1
***
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-28-
<PAGE>
EXHIBIT K-2
WORK ORDER (SAMPLE FORMAT)
THIS WORK ORDER is made as of __________________. between CSG Systems, Inc.,
("CSG"), and ________________ ("Customer"), pursuant to the *** Services
Agreement that CSG and Customer executed as of ________________, 1997, and of
which this Work Order forms an integral part.***.
IN WITNESS WHEREOF, CSG AND CUSTOMER CAUSE THIS WORK ORDER TO BE DULY EXECUTED
BELOW.
CSG SYSTEMS, INC. ("CSG") ("Customer")
By: _______________________________ By: _______________________________
Name: _____________________________ Name: _____________________________
Title: ____________________________ Title: ____________________________
Date: _____________________________ Date: _____________________________
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-29-
<PAGE>
EXHIBIT 10.4
JUNE 26, 1997
-------------
REVISED
JULY 14,1997
PRESENTED TO
21/ST/ CENTURY
THANK YOU
---------
for giving us the opportunity to present
our capabilities to you. This Proposal was
assembled after research and consideration of
how to best meet your stated goals.
In Marketing Services, Inc. believes
we can make a substantial contribution to
your sales and marketing program.
We work hard to determine the best,
most cost-effective way to match our
capabilities with your needs.
We are pleased to present our
recommendations to you today.
ITI Delivers.
GUARANTEED.
ITI marketing Services 902 North 91st Plaza Omaha, Nebraska 68114 Phone
800-562-5000
<PAGE>
CONTENTS
--------
1 Executive Summary
2 Program Overview
3 Critical Success Factors
5 Service Plan
7 Account Management
8 Recruitment & Training
9 Operations
10 Quality Assurance
11 Systems
12 Disaster Recovery
13 Commitment
14 Price Quotation/
Acceptance/Terms
ITI MARKETING SERVICES
The Teleservices Solution
<PAGE>
[LETTERHEAD OF MARKETING SERVICES APPEARS HERE]
July 14, 1997
Richard Wiegand-Moss
Chief Operating Officer
21/st/ CENTURY
350 N. Orleans
Suite 737
Chicago, IL 60654
Dear Richard,
Thank you for your continued interest in ITI Marketing Services, Inc. I am
certain you will find ITI to be a true strategic partner you can rely upon for
telemarketing advice and program consultation in helping you achieve your goals
on this customer care project.
We are pleased to present the attached Revised Proposal for your consideration.
Please review the enclosure at your earliest convenience. Upon approval, sign
both originals, forward one to Amy Schumacher at 902 N. 91/st/ Plaza Omaha, NE
68114, and retain the other for your files. Upon receipt of the signed Proposal
and initial setup fee, we will promptly begin implementation and execution of
your inbound dedicated program.
We are very excited about the customer service opportunity and look forward to a
mutually beneficial relationship. Please contact me with any questions you may
have at (800) 562-5000, or directly at (402) 392-9222. Thank you again for your
consideration.
Sincerely,
ITI MARKETING SERVICES, INC.
Michael J. Lee
<PAGE>
EXECUTIVE SUMMARY
- -------------------------------------------------------------------------------
Since our incorporation in 1986, ITI Marketing Services, Inc. (ITI) has grown to
become one of the nation's leading telemarketing service agencies, providing
Inbound, Outbound, Bilingual (Hispanic) and Interactive services to many of the
Fortune 1000 companies.
With over 3,400 Inbound and Outbound workstations and more than 9,000 talented
employees processing over 150 million calls annually, ITI is consistently listed
in the top 10 of the "Top 50 Service Agencies," as listed annually in
Telemarketing and Call Center Solutions magazine.
ITI's market focus is to support customized programs. We are experienced in a
wide range of applications ranging from basic lead generation and order
processing, to dealer/locator, to the implementation of sophisticated, dedicated
programs and customer service support.
ITI is dedicated to not only working for you, but also with you in achieving
your goals. We believe in establishing partner-like relationships with our
clients based upon mutual understanding and communication supported through
shared dedication and trust.
21/st/ Century: Proposal July 14, 1997
Page 1 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
PROGRAM OVERVIEW
- --------------------------------------------------------------------------------
21/st/ Century has requested ITI to present a comprehensive Proposal for inbound
customer care services. 21/st/ Century is developing a bundled offering with a
cable television service, Internet access, high-speed date transmission, long
distance telephone service, cellular, paging and security services. These
services with be offered to some 300,000 residential houses, and 500,000 hotel
rooms along Chicago's lakefront area. Other areas that might be targeted include
Michigan, Illinois and Indiana.
ITI would utilize the Cable Control Systems (CCS) through CSG Systems, Inc. to
provide the customer care services utilizing ITI Customer Service Sales
Representatives (CSSRs).
If actual call volumes do not meet or exceed minimum projections, both 21/st/
Century and ITI will in good faith discuss future program development's and
direction of ongoing customer service work.
FOR ITI TO BE PREPARED FOR YOUR PROGRAM LAUNCH, YOUR START DATE IS DEPENDENT
UPON RECEIPT OF ALL REQUIRED INFORMATION THREE WEEKS IN ADVANCE OF THE START
DATE. Required information includes, but is not limited to: finalized input and
output requirements, file formats, transmission protocols and specifications,
magnetic media specifications, data editing/formatting rules, scripts, answers,
responses, reporting requirements including samples or drafts of reports, test
files (reference databases), volume projections and media and development
schedules.
21/st/ Century: Proposal July 14, 1997
Page 2 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
CRITICAL SUCCESS FACTORS
- -------------------------------------------------------------------------------
At ITI, we believe the results of your telemarketing initiative are contingent
upon focused, consistent attention to the following critical success factors.
ITI is dedicated to addressing these fundamentals which will be integrated as
part of an overall service plan:
Call Quality ITI requires all CSSRs conduct themselves in a professional,
competent, and courteous manner to portray a sense of
integrity. Every call must create a favorable impression and a
seamless service plan.
ITI is committed to the uncompromising quality of our CSSR
staff. A Quality Assurance Plan, which includes service
standards, will be developed for your program. Those components
include: call monitoring, accuracy, script adherence, test
calling and on-the-floor observation, coaching and counseling.
Data Accuracy ITI believes it is imperative that the data collected on your
and Reporting program be be accurately recorded and reported. ITI
consistently monitors the information gathered for accuracy and
incorporates a verification system for all data collected. ITI
has the technical expertise to report and transmit data in a
wide variety of formats and within the timeframes required.
Volume Capacity ITI has experience with programs that produce wide volume
fluctuations and constantly monitors programs to determine
needs for realignment of volume coverage. ITI will work closely
with you to develop anticipated call volume coverage
requirements and create alternative staffing plans for timely
implementation as required.
21/st/ Century: Proposal July 14, 1997
Page 3 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
CRITICAL SUCCESS FACTORS - CONTINUED...
- -------------------------------------------------------------------------------
Account Management ITI assigns an Account Team consisting of a Sales
Team Executive,Account Manager, Quality Assurance Manager,
Systems Manager, Operations Manager and Training
Coordinator to each program. These members hold the
responsibility for analyzing business plans and developing
detailed agendas for implementation and on-going
maintenance. Additionally, an Account Executive from the
Vice Presidential level or higher is assigned to serve and
provide valuable insight.
Cost Effectiveness ITI believes a superior service plan is able to
balance costs and the quality of service. ITI has years of
experience in handling a wide variety of programs. Our goal
is to provide you with cost-effective services and,
whenever possible, recommend ways to reduce costs while
still maintaining the level of service our clients require.
21/st/ Century: Proposal July 14, 1997
Page 4 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
SERVICE PLAN - INBOUND
- --------------------------------------------------------------------------------
ITI will provide the following inbound services to support the 21/st/ Century
program:
Service Availability Inbound call handling services are available 24 hours a
day, 7 days a week. On a monthly average, we manage to
an 80 percent service level of all calls within our
Shared Group.
Toll-Free Number ITI will assign exclusive toll-free numbers if necessary
Assignment for the entire length of the program. Clients may also
elect to transfer their preferred numbers to ITI for the
entire length of the promotion.
Customized Greeting Your specifically preferred greeting is delivered on
programs utilizing exclusive toll-free numbers.
Script Design Working in conjunction with you and your organization,
ITI will develop automated call scripting. Script
revisions may be made as needed to introduce new
products or services, or to improve the efficiency or
effectiveness of the call. Program-specific resource
materials can also be made available for on-line
reference.
Training A Training Supervisor will be assigned to coordinate the
introduction of the program as well as the CSG/CCS
System Training. This individual develops both the
implementation training material and enhancement
training as required. All representatives will be
required to pass a product knowledge examination prior
to handling your calls.
Quality Assurance A comprehensive Quality Assurance Plan, including
program standards, will be implemented. Components of
this plan typically include call monitoring, accuracy,
script adherence, test calling and on-the-floor
observations.
21/st/ Century: Proposal July 14, 1997
Page 5 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
SERVICE PLAN - INBOUND - CONTINUED...
- --------------------------------------------------------------------------------
Reporting Detailed call summary reports, including incomplete call
summaries, are available on a daily basis. In our Shared
Services Group, client specific reporting relative to the
number of calls which are busied or other ACD reporting is
not available. ACD reports will be e-mailed on a daily basis
with a month end report sent two business days after the end
of the month.
Account Team members assigned to your program will include a Sales
Management Team Executive, Quality Assurance Manager, Account Manager,
Systems Manager, Operations Manager, Training Coordinator
and Senior Account Executive.
Quarterly Business Quality Business Reviews (QBRS) include an analysis of call
Reviews handling, overall performance, and results achieved relative
to goals and objectives. Future objectives and strategies,
as well as service requirements to support them, are also
addressed. These reviews may involve client visits to ITI's
facility, although business reviews conducted via conference
call have been successful as well.
21/st/ Century: Proposal July 14, 1997
Page 6 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
<PAGE>
PENALTIES FOR NON PERFORMANCE
- --------------------------------------------------------------------------------
As long as actual call volume fall within ***% of client supplied projections
and service level requirements are based on ***% of the calls answered within 30
seconds; ITI will reduce price of dedicated staffed station $*** per hour for
every 2.5 seconds we exceed 30 seconds. This will be looked at on a weekly basis
to determine the actual average speed of answer.
If ITI exceeds client's goal of ***% of the customer calling in receiving a busy
signal in the dedicated environment, ITI will deduct $*** per hour for every one
percent over three percent.
21/st/ Century: Proposal July 14, 1997
Page 7 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
ACCOUNT MANAGEMENT
- --------------------------------------------------------------------------------
Upon receipt of a signed contract, your Sales Executive will formally transition
the bulk of the day-to-day communications regarding the account to your Account
Manager. The Account Manager is the primary point of contract and will
coordinate the setup and execution of your account.
Within ITI, the Account Manager interacts with Department Heads to coordinate
the launch of your program. The Account Manager serves as the central point of
contact and your advocate to ensure your goals are being achieved.
The Account Manager will work with you, the client, and our internal departments
to develop and maximize critical performance factors to include, but not be
limited to:
. Develop Scripting
. Test Data
. Performance Objectives
. Analyze and Interpret Results
. Forecast Staffing Needs
. Plan Strategies To Meet Performance Objectives
ITI has a track record of establishing mutually profit-able, long-lasting
relationships with our clientele. We believe our approach to Account Management
and our commitment to partnerships have been the cornerstones to our success.
21/st/ Century: Proposal July 14, 1997
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
RECRUITMENT AND TRAINING
- --------------------------------------------------------------------------------
ITI recruits qualified individuals who not only meet specific standards of
performance and possess the necessary skills, but also people with a dedication
to quality and drive for success. Skills include: sales and communication
abilities, spelling, speech, grammar, reading comprehension, typing and, in some
cases, mathematical aptitude.
All potential CSSRs must initially pass a telephone interview, which determines
voice quality and speech proficiency. The second step involves a group interview
which includes an overview of the position, introduction to ITI, as well as a
script reading by each candidate. Typing, spelling and abbreviation tests are
then administered, and those who qualify move on to a personal interview-.
Through our in-depth recruiting analysis, ITI's clients are assured high quality
call center representation (only 17 percent of those people interviewed become
CSSRS).
ITI is recognized for offering compensation packages which exceed those of any
competitors within the cities in which we operate. Additionally, M offers a full
benefits package, including medical coverage, a 401k Plan and profit sharing to
both full-time and part-time employees. These factors allow ITI to recruit the
most qualified individuals and to retain these valuable employees longer than
our competition. In fact, ITI's turnover is just one quarter of the industry
average. ITI's commitment to providing industry-leading compensation packages
enables us to provide our clients with representatives, as well as reduced
turnover and training costs.
Upon acceptance, CSSRs begin a five to ten day classroom training program.
Initial training involves a corporate orientation and an overview of policies
and procedures with an emphasis on ITI's standards of quality and performance.
Training includes a comprehensive introduction to ITI's clients and their
programs as well as intensive product knowledge education. The class is also
educated, in depth, on our automated system, followed by group and individual
role-play exercises. Product knowledge/system examinations are conducted and
each new employee must pass with a minimum score of 90 percent. As the CSSRs
move from the classroom environment to the call center, they begin on-the-job
training (OJT). During the OJT period, Team Sales Supervisors are assigned to
small, manageable teams of CSSRS. The trainer may also work with each team,
providing one-on-one education through call coaching, demonstration and side-by-
side call monitoring.
ITI maintains the highest standards while hiring and training quality sales
representatives who will master your program, capture the information required
and ensure your company s image is maintained.
21/st/ Century: Proposal July 14, 1997
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
OPERATIONS
- --------------------------------------------------------------------------------
The ITI Inbound Operations Management Team is responsible for managing all
aspects of the Inbound Calling Center. This team consists of a Director of
Operations, Operations Managers, Program Managers, Program Supervisors and Team
Supervisors.
The Director of Operations and Operations Managers are responsible for managing
the call centers on a global basis. They oversee all hiring, training,
performance, quality, call flow and all administrative aspects of the call
center.
Operations Managers, Program Managers, and Program Supervisors are responsible
for managing the day-to-day activities of the CSSRs. The primary objective of
this group is to ensure all personnel are handling each call in accordance with
the agreed-upon client standards and objectives.
To ensure adherence to our client's objectives, ITI provides extensive training
to all Supervisory Personnel. Typically, an ITI Supervisor will have spent at
least six months taking inbound calls prior to being eligible for promotion to
Supervisor. This training affords an ITI Supervisor the ability to have a
greater understanding of the demands of the CSSR position.
The ratio of Supervisory Personnel to CSSRs vary to program requirements, but
will approximate 1 Management Person to 9.4 Representatives. Maintaining ratios
at these levels ensures each client that the individuals taking their calls are
being given the necessary attention to properly execute each phone call.
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
QUALITY ASSURANCE
- --------------------------------------------------------------------------------
The key component to ITI's industry-leading level of call quality is our
commitment to a structured quality assurance process which involves
systematically monitoring each CSSR on a daily basis.
During each shift a CSSR works, the ITI Quality Assurance Team monitors a
minimum of two calls per CSSR per shift, to ensure adherence to both internal
and claim specific standards, and to provide each individual feedback for
improvement. This process is executed by both a Quality Assurance Representative
(QAR) and Floor Supervisory Personnel.
In an effort to make this subjective process more objective, ITI extensively
trains each QAR and has developed monitoring sheets which allow for evaluation
on specific elements of each phone call. Once the call has been critiqued, the
QAR quickly communicates with the Floor Supervisor giving feedback about the
call. The Floor Supervisor then provides this feedback to the CSSR during his or
her work shift.
To further ensure call quality, ITI Account Management Personnel frequently
conduct test calls and provide feedback to Operation Personnel.
This multi-faced approach to quality assurance in Inbound Operations has earned
ITI a leadership position within the telemarketing industry.
21/st/ Century: Proposal July 14, 1997
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
SYSTEMS
- -------------------------------------------------------------------------------
ITI -utilizes both a Northern Telecom ACD and a Tandem Himalaya K1000 as inbound
calling processing systems. The Northern Telecom system, with dual common
control, has full ACD capability with Dialed Number Identification Service
(DNIS), as well as Direct Terminal Interface (DTI) capabilities, connecting the
Tandem Himalaya K1000 and the Northern Telecom through an ISDN (two-way)
gateway. This facilitates an automated presentation of the script to the CSSR
screen and may include your customized greeting.
The Tandem Himalaya K1000 is supported by our custom-developed software and
provides our clients with sophisticated scripting and branching capabilities.
The Tandem is a specialized fault-tolerant system which is non-stop and utilizes
redundant mirrored discs, enhancing data protection. The system requires no
daily downtime for maintenance and processing.
Via the Northern Telecom's Call Management System, ITI Inbound Services can
provide many detailed management reports relating to service levels and
statistical call data.
All ITI software programs are developed internally and are proprietary. Our
expertise in specialized, flexible script development has helped to make us an
industry leader.
21/st/ Century: Proposal July 14, 1997
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
DISASTER RECOVERY/BACK-UP SYSTEMS
- --------------------------------------------------------------------------------
ITI understands the critical need to ensure our Inbound Operations are fully
functional at all times. The following steps have been taken to ensure
uninterrupted service to our clients, 24 hours a day, 7 days a week:
. Tandem mainframe system is a fault-tolerant central processing unit
which offers dual processing functionality at all times. We also have
the ability to access the development system for back-up purposes and
for remote processing.
. ITI subscribes to 24-hour maintenance with Tandem and is connected to
Tandem's National Secure Center, which automatically' receives warning
calls from the Tandem processor if trouble is detected. The Northern
Telecom ACD system also has maintenance available 24 hours a day in
addition to an internal alarm system.
. All software is duplicated and all data files are backed up daily with
copies stored onsite and in an off-site controlled warehouse facility
which specializes in records and data back-up storage.
. ITI utilizes an Exide UPS (Uninterrupted Power Supply) which is also
on-line with a Cummins diesel generator to supply a consistent flow of
power to all phone stations, as well as to all critical support staff
departments. Should a loss of power occur, standard operating
procedures are supported by the back-up systems for the required
duration. Both back-up systems are tested and maintained on a regular
basis.
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
COMMITMENT
- --------------------------------------------------------------------------------
The cornerstones of ITI are knowledge, leadership, intensity, dedication and a
commitment to accountability. Our goal is to redefine the standards by which all
direct marketing companies are judged. You can trust that you have our
unconditional commitment to excellence in achieving your goals.
We welcome the opportunity to provide you with the services outlined within this
Proposal, and are confident we are effectively deliver the quality service you
deserve. More importantly, we are certain we can attain this in a cost-effective
manner by utilizing our experiences, our economies of scale, our commitment to
quality and our sales expertise. ITI welcomes the opportunity to establish a
long-term working relationship with 21/st/ Century. Thank you for your time and
consideration.
21/st/ Century: Proposal July 14, 1997
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PROPRIETARY AND CONFIDENTIAL
<PAGE>
ITI MARKETING SERVICES PRICE QUOTATION
INBOUND PRICING - DEDICATED SERVICE GROUP
================================================================================
ITI Price Quotation: This price quotation is valid for 30 days from the date
shown below. Please read the back of this form for terms
and conditions on the services we provide.
***
NOTE: Setup will be determined by script complexity, transmission format,
transfer options and transmission protocol.
21/st/ CENTURY DATE ITI MARKETING SERVICES, INC. DATE
/s/ Richard Weigand-Moss /s/ Daniel S. Hicks
- ---------------------------------- -----------------------------------------
Daniel S. Hicks
Vice President, Inbound Account Management
21/st/ Century: Proposal July 14, 1997
Page 15 pub/mikelee/proposals
PROPRIETARY AND CONFIDENTIAL
_______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
ADDITIONAL TERMS
1. Payment Terms; Conditions.
--------------------------
(a) Invoices; Finance Charge. Client shall be invoiced weekly in
------------------------
accordance with the prices set forth on the front of this agreement. Payment of
invoices is due ten (10) days from the date of invoice. Invoices remaining after
the due date shall be subject to a finance charge of one and one-half percent
(1.5%) per month.
(b) Nonpayment; Withholding Data. If ITI has not received payment of an
----------------------------
invoice within ten (10) days from the invoice date. ITI may, at its sole and
absolute discretion, with prior notice to Client, (i) withhold all call data in
the possession of ITI at that time, (ii) refuse to furnish same to Client until
said account is brought current, (iii) cancel any and all services being
provided to Client, and (iv) refuse to deliver any and all information in the
possession of ITI until Client's account is brought current.
(c) Price Change. ITI may change the price of its services quoted in this
------------
Agreement for just cause shown or because of an increase in the service supplied
to or by ITI or because of governmental increases not controlled by ITI, as long
as written notice of the increase is given to Client prior to the change taking
effect.
(d) Drag Calls. Upon termination of this Agreement. Client agrees to
----------
compensate ITI for any drag calls that may occur at the stated per call rate, as
set forth in the pricing schedule.
(e) Taxes. Client shall pay all service, sales, use and valued-added
-----
taxes, duties, assessments and any other taxes or fees which may be assessed or
levied by any governmental or regulatory authority with respect to the services
provided by ITI to the Client pursuant to this Agreement.
(f) Credit Approval; Deposits. ITI's acceptance of this Agreement is
-------------------------
subject to satisfactory credit investigation and approval of Client. Upon such
credit approval, Client may be required, in ITI's sole discretion, to place a
security deposit with ITI in an amount to be determined by ITI to guarantee
payment of all obligations owed to ITI hereunder. Upon termination of this
Agreement, ITI will return such deposit to Client after deducting any amounts
payable to or otherwise owed to ITI hereunder.
2. Changes to Project Agreements. ITI and Client further agree that it is
-----------------------------
understood between the parties hereto that due to the nature of this business:
(a) Service Change. Changes made in the scope of service specified in the
--------------
service description after the terms of the same have been agreed to or any
changes made by date changes, media requirements, additions or deletions, may
result in additional charges to Client and will be governed by paragraph 1(c)
above.
(b) Oral Change. ITI shall not be held liable for errors to Client's
-----------
project caused by oral changes, additions or deletions. All oral changes may be
subsequently verified and approved in writing between Client and ITI to be
valid.
3. Warranties; Representations. Client represents and warrants to ITI that:
---------------------------
(a) Authorization; Compliance with Laws. Client is fully authorized to
-----------------------------------
provide the products and/or services being offered to the prospects pursuant to
the solicitations to be made by ITI under this Agreement. Client further
represents and warrants to ITI that all products and/or services and the
offering of all products and/or services to be provided by ____ to the prospects
will fully comply with all applicable federal, state and local laws, _____ and
regulations, including, but not limited to, the Telephone Consumer Protection
Act of 1991, the Telemarketing and Consumer Fraud and Abuse Prevention Act (the
"TCFAPA") and any similar federal and state legislation regarding telephone
marketing.
(b) Scripts; FTC's Rule. Client has provided ITI with all necessary
-------------------
information concerning the products and/or services to be marketed pursuant to
this Agreement to enable ITI to assist in the development of telephone marketing
scripts containing the disclosures required by Section 310.3 of the Federal
Trade Commission's Telemarketing Sales Rule (the "Rule") and any other
regulation or law specifically applicable to such products and/or services. All
such information is true and correct and, if applicable, consistent with
representations made by or on behalf of Client in the marketing of such products
and/or services in other media. Client will immediately inform ITI of any
changes in its policies or practices or in the description of such products
and/or services that may require a change in such disclosures. If applicable,
Client further represents and warrants that product labeling, packaging and
instructions comply with applicable law.
(c) Disclosure. Client has disclosed the existence of any decrees, orders
----------
or consent agreements, and of any pending formal or informal governmental
investigations, regarding the products and/or services that are the subject of
this Agreement or Client's business practices based upon the Rule or any other
consumer protection law and Client will immediately inform ITI of any change in
the status of such matters or the institution of other or further investigations
under such laws as soon as it becomes aware of them.
<PAGE>
4. Performance in Accordance with Accepted Standards. ITI shall perform all
-------------------------------------------------
duties and obligations required of it pursuant to this Agreement in accordance
with accepted telemarketing industry standards. ITI represents to Client that
it will comply with all applicable federal, state and local laws, rules and
regulations, including the TCFAPA. Except as set forth in the immediately
preceding sentence, ITI makes no express or implied warranties (whether implied
in fact or in law). ITI has made no affirmations of fact or other
representations to the Client other than those expressly set forth in this
Agreement and Client hereby agrees that it has not relied on any affirmation of
fact or other representation from ITI in entering into this Agreement other than
those expressly set forth in this Agreement.
5. Intellectual Property; Call Data. ITI and Client agree that all software
--------------------------------
programs developed by ITI for Client are owned by ITI and remain the exclusive
property of ITI and shall be retained by ITI at the termination of this
Agreement. ITI and Client further agree that all call data and all customer
information generated by this contract belong to Client, subject to the terms of
this Agreement.
6. Identification; Limitation of Damages
-------------------------------------
(a) Indemnification. Subject to the limitations set forth in this
---------------
Agreement, each party (the 'Identifying Party") agrees to indemnify and hold
harmless the other party, its officers, directors, shareholders, employees or
agents (the "Indemnified Party") from any and all liabilities, losses, damages,
claims, suits, judgments, costs and expenses (including reasonable attorneys'
fees and costs of any investigation of action related thereto) ("Losses")
suffered or incurred by the Indemnified Party, its officers, directors,
shareholders, employees or agents, arising out of any error, omission,
misconduct or negligence of the Indemnifying Party. Further, Client shall
indemnify and hold ITI harmless from any Losses arising out of any scripts
and/or support materials provided or approved by Client, and hereby releases ITI
from any Losses in connection herewith.
(b) Consequential; Total Damages. In no event shall ITI be liable to
----------------------------
Client for any incidental or consequential damages of any kind (including,
without limitation, lost profits) which result from one or more of the
following: (i) a breach by ITI of the terms of this Agreement or of any
agreement implied in law arising by reason of the transactions contemplated by
this Agreement; or (ii) any negligent actions or omissions of ITI. In no event
shall either party be liable to the other for any punitive damages arising by
virtue of any dealings between the parties. In no event shall ITI be liable for
any claims or demands against Client by a third party arising out of, or
connected with the services provided hereunder. ITI's entire liability to Client
for damages (other than consequential and incidental damages and damages arising
by virtue of third-party claims and demands for which ITI has no liability as
provided above) in connection with the services provided to Client, or provided
by Client to its Clients, shall not exceed in the aggregate the total contract
price due ITI under this Agreement.
7. Diversion of Employees. During the term of this Agreement and for a
----------------------
period of two (2) years following the expiration or termination of this
Agreement, Client will not, directly or indirectly: (a) induce or attempt to
influence any employee of ITI to terminate his or her employment with ITI; (b)
employ or recommend for employment any employee of ITI; or (c) identify for
employment any employee of ITI.
8. Term; Termination.
-----------------
(a) ***
(b) Termination for Cause. Notwithstanding any other provision in this
---------------------
paragraph, either party hereto may terminate this Agreement with ten (10) days
advanced written notice of the termination date to the other party hereto, if:
(1) The other party hereto has falsified information that led to this Agreement:
(2) The other party hereto is found to not be conducting its business in a
proper manner; (3) The other party is unable to pay its debts generally as they
come due or is declared insolvent or bankrupt, is the subject of any proceeding
relating to its liquidation, insolvency or the appointment of a receiver or
similar officer, or makes an assignment for the benefit of all, or substantially
all of its creditors, or enters into an agreement for the composition,
extension, or readjustment of all or substantially all of its obligations.
(c) Termination for Changed Laws. Either Party shall have the right to
----------------------------
terminate this Agreement, without liability to the other, in the event of any
judicial, regulatory or legislative change rendering performance of this
Agreement impossible, illegal or impractical. Such Party shall provide the
other with written notice of such termination as promptly as possible, but in no
event less than ten (10) days prior to the termination date.
9. Entire Agreement. This Agreement constitutes the complete Agreement
----------------
between ITI and Client and no other verbal representations or written
representations will supersede this Agreement, except that additions and changes
properly documented and authorized and referred to for the purpose of this
Agreement as an amendment will become part of this original Agreement as if
fully rewritten herein.
10. Waiver. The waiver by either Party, or the failure by either Party to
------
claim a breach of any provision of this Agreement or to give notice with respect
thereto, shall not be held to be a waiver of any subsequent breach of such
provision or any other provision.
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
11. Severability. In the event any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable to any extent, the legality, validity and
enforceability of the remainder of this Agreement shall not be affected thereby
and this Agreement shall continue in fully force and effect as modified and
shall be enforced to the fullest extent permitted by law.
12. Assignment. Neither this Agreement, nor any of the rights, duties or
----------
obligations hereunder, may be assigned (whether by operation of law or
otherwise) or otherwise delegated by either Party without the prior written
consent of the Non-Assigning Party and any attempted assignment which is not in
conformity herewith shall be voidable at the option of the Non-Assigning Party.
If such an assignment is approved, this Agreement shall be binding upon, and
inure to the benefit of and be enforceable by, the parties hereto and their
respective successors and permitted assigns.
13. Force Majeure. Each party hereto (other than the obligation of Client to
-------------
make payments for any services rendered hereunder) shall be excused from
performing any obligations under this Agreement, in whole or in part, as a
result of delays or interference caused by the other party or by an act of God,
war, labor disputes, strikes, floods, lightning, severe weather, shortage of
materials, failures or fluctuations in electrical power, heat, light, air
conditioning, disruption of a line, service or program by a common carrier or
billing services provider, disruption or malfunction of any data processing or
telecommunications network, facility or equipment, third-party nonperformance,
or other cause beyond a party's reasonable control, and such nonperformance
shall not be a default hereunder or a basis for termination hereof.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the local laws of the State of Nebraska.
<PAGE>
EXHIBIT 10.5
POLE ATTACHMENT AGREEMENT
This POLE ATTACHMENT AGREEMENT (the "Agreement") is dated this 3rd day of
April, 1996 by COMMONWEALTH EDISON COMPANY ("ComEd"), an Illinois corporation,
and 21ST CENTURY CABLE TV, INC. ("21st Century"), an Illinois corporation.
In consideration of the mutual covenants,, terms and conditions herein
contained, the parties agree as follows:
1.0. PURPOSE AND CONSTRUCTION OF AGREEMENT
1.1 21st Century provides or intends to provide certain telecommunication
services to residents of the portions of ComEd's service territory set forth in
Exhibit A to this Agreement. Exhibit A may be amended at any time during the
Term. of this Agreement by the mutual written consent of the parties. In order
to expedite construction and otherwise save costs in providing such services,
21st Century desires to attach fiber optic-strands and/or cable wire, strand
hardware and other associated equipment, hardware and power supplies to utility
poles that are owned in whole or in part by ComEd within such service area.
1.2 ComEd owns, both wholly and jointly with others, valuable pole plant,
which it acquired and maintains at considerable cost and expense. ComEd is
willing to permit the placement of the fiber optic strands and/or cable wire,
strand hardware and other associated equipment, hardware and power supplies
referred to above on certain of its poles that it owns in whole or in part,
provided that (i) it receives appropriate compensation as set forth in this
Agreement, (ii) it is protected from all liability that may result therefrom as
set forth in this Agreement, and (iii) such attachments do not materially
interfere with its own service and operating requirements, including
considerations of economy and safety.
1.3 This Agreement is not intended, and shall not be construed, to
authorize any action by 21st Century that would adversely affect the quality or
reliability of the electric service provided by ComEd. Nor shall it be
construed so as to preclude ComEd from taking any action that it considers
necessary to maintain the reliability or quality of such electric service or to
ensure the safety of its employees or the public.
1.4 The parties agree that it would serve their mutual economic and other
interests for 21st Century, under the conditions set out herein and to the
extent it may lawfully do so, to attach
<PAGE>
its fiber optic strands and/or cable wire, strand hardware and other associated
equipment, hardware and power supplies to the pole plant owned by ComEd,
pursuant to the conditions set forth below and in return for payment to ComEd of
the fees set forth in this Agreement, where such attachment will not materially
interfere with ComEd's service and operating requirements. Through this
Agreement, ComEd intends to give 21st Century licenses to use particular poles
in the manner and for the purpose set forth herein. No easement rights,
interest in real estate or other interest in property is granted or intended to
be granted by this Agreement. No use, however extended, of ComEd poles under
this Agreement shall create or vest in 21st Century any ownership or property
rights in ComEd's poles.
1.5 21st Century acknowledges that this Agreement was negotiated between
ComEd and 21st Century, that 21st Century has had an adequate opportunity to
review the Agreement and to suggest or request changes thereto, that it has made
an independent assessment of the business risks and benefits of entering into
this Agreement, that based on this evaluation 21st Century desires to enter into
this Agreement, and that the Agreement is, as a whole, just and reasonable.
2.0 DEFINITIONS.
2.1 "Attachment" means the fiber optic strand or cable wire, strand or
wire hardware or equipment mounted on the strand or wire, including but not
limited to the cable, amplifiers, and splice boxes that are used in providing
21st Century Service. An Attachment is placed "on," or is "attached to," a
ComEd Pole if any portion of it is physically located on the ComEd Pole, if any
portion of it is located within 10 feet of the ComEd Pole, or if any portion of
it precludes the use of the adjacent ComEd Pole space by others.
2.2 "21st Century Service" means the broad band telecommunication services
provided by 21st Century to its customers, including community antenna
television service which is operated to perform for hire the service of
receiving and distributing video and audio program signals by wire, cable or
other means to members of the public who subscribe to such service.
-2-
<PAGE>
2.3 "ComEd Poles" means wooden poles included in ComEd Account 364 that
ComEd owns in whole or in part.
2.4 "Effective Date" means the date ComEd executes this Agreement.
2.5 "Facility" or "Facilities" means equipment and hardware other than,
and incidental to, the Attachment or Power Supply, such as, but not limited to,
vertical risers and grounding wires, that are used in providing 21st Century
Service and that are placed on ComEd Poles in conjunction with placement of the
Attachment or Power Supply. A facility is placed "on," or is "attached to," a
ComEd Pole if it is physically located on the pole, if it is located within 10
feet of the ComEd Pole, or if it precludes the use of the adjacent ComEd Pole
space by others.
2.6 "Power Supply" means the 21st Century power supply mounted on or by a
ComEd Pole. A power supply is placed "on," or is "by" a ComEd Pole if it is
physically located on the pole, if it is located within 10 feet of the ComEd
Pole, or if it precludes the use of the adjacent ComEd Pole space by others.
3.0 AUTHORITY FOR ATTACHMENTS.
3.1 21st Century agrees that it will, at its own expense, procure and
maintain any and all easements, licenses, consents, franchises, certifications,
permits, approvals or authorizations .that it may require to engage in business
and to use public streets and thoroughfares in the area served, or for the
placement of its Attachments, Facilities or Power Supplies by any property
owners or by any municipal, state or governmental agency having jurisdiction.
ComEd may, at its discretion, request evidence that all such approvals or
authorizations have been obtained and are in full force and effect.
3.2 21st Century shall not place any Attachment, Facility, or Power Supply
on ComEd Poles until after the Effective Date of this Agreement and shall not
place any Attachment, Facility, or Power Supply on ComEd Poles until written
permission has been requested and granted as provided in Section 4 of this
Agreement, all conditions of such
-3-
<PAGE>
permission have been satisfied, and all necessary licenses, easements, consents,
franchises, certifications and permits have been obtained by 21st Century.
3.3 21st Century agrees to not place any Attachment, Facility, or Power
Supply on ComEd Poles until all necessary makeready work, as set forth in
Section 5 of this Agreement, has been performed by ComEd.
4.0 APPLICATIONS FOR PERMISSION TO PLACE ATTACHMENTS.
4.1 21st Century shall submit a written Application for Permission to Make
Attachment("Application"), to ComEd, substantially in the form of attached
Exhibit B-1, for the placement of each proposed Attachment, Facility, or Power
Supply, specifying the location of the ComEd Pole, the nature of the placement
sought, and the date proposed for such placement.
4.2 ComEd will indicate on the Application the replacements, changes and
rearrangements to the facilities, equipment or plant of ComEd or other joint
owners or users of the ComEd Pole that will be necessary to accommodate the
proposed placement of 21st Century's Attachments, Facilities or Power Supplies
and the estimated cost of such replacements, changes or rearrangements to be
charged to 21st Century ("Marked Application"). Such estimates shall be based
on fully allocated costs and will include all direct and indirect costs for
labor, time, service and applicable administrative overheads, and will be made
in accordance with ComEd's General Order 25, as that order may be amended from
time to time. Within thirty (30) days of receipt of the Application, ComEd will
return the Marked Application to 21st Century.
4.3 If after receiving the Marked Application, 21st Century still desires
to place the identified Attachments, Facilities or Power Supplies on ComEd Poles
under the conditions indicated, and to pay the costs estimated, 21st Century
shall return the Marked Application to ComEd to indicate acceptance.
4.4 ComEd reserves the right to deny any Application when it believes that
the proposed placement of an Attachment, Facility or Power Supply would
adversely affect current or proposed utilization of the ComEd Poles by ComEd or
other owners, or would otherwise
-4-
<PAGE>
adversely affect ComEd's service or operations. ComEd further reserves the right
to specify conditions under which the placement of an Attachment, Facility or
Power Supply that would otherwise be denied will be permitted.
4.5 When an Application is granted as provided herein, a permit will be
issued by ComEd substantially in the form of attached Exhibit B-2.
5.0 MAKEREADY.
5.1 21st Century agrees to pay in advance the estimated cost of
replacements, changes and rearrangements necessary to accommodate the placement
of 21st Century's Attachments, Facilities or Power Supplies, as shown on the
Application. ComEd shall make such replacements, changes and rearrangements
upon receipt of such payment in due course and pursuant to a schedule which will
not interfere with ComEd's other responsibilities and duties, unless 21st
Century requests, and ComEd agrees to, an expedited makeready schedule as set
forth in this Section.
5.2 21st Century may request in writing that all or part of the makeready
work be performed on an expedited schedule. If 21st Century makes a request,
ComEd may, in its discretion, accept or deny such request. If ComEd agrees to
undertake such expedited makeready, ComEd and 21st Century will negotiate a
schedule acceptable to both, which schedule will be confirmed in writing. 21st
Century agrees to pay ComEd 1.5 times its costs as estimated pursuant to
Paragraph 5.1 (including overtime labor costs) for all work performed according
to any such expedited schedule.
5.3 21st Century agrees to also pay the costs (to the extent not paid
pursuant to Paragraphs 5.1 or 5.2 above), when billed, for any engineering work
performed by ComEd, including any analysis, survey or inspection of the proposed
route of 21st Century's Attachments, Facilities or Power-Supplies, or the
preparation of engineering documentation or work orders and drawings for any
replacements, changes and rearrangements of ComEd Poles and facilities or the
facilities of other users, that may be necessary to accommodate 21st Century's
Attachments, Facilities or Power Supplies, whether occurring prior or subsequent
to the placement of any Attachments, Facilities or Power Supplies. 21st Century
shall be entitled to reimbursement of
-5-
<PAGE>
such costs actually paid by 21st Century to the extent that ComEd receives
reimbursement of such costs from other users.
5.4 21st Century agrees to pay when billed the cost of any additional
guying required to accommodate 21st Century's Attachments, Facilities or Power
Supplies to the extent such costs are not paid pursuant to Paragraphs 5.1, 5.2,
or 5.3 of this Section.
6.0 PROCEDURES FOR ATTACHMENT.
6.1 21st Century agrees to make its Attachments, and place its Facilities
and Power Supplies, in a safe and workmanlike manner, in accordance with ComEd's
rules and regulations and in compliance with all applicable laws, rules and
regulations imposed by any governmental unit or agency having jurisdiction. In
particular, all placements of Attachments, Facilities, and Power Supplies
coveted by this Agreement shall meet the requirements and specifications of 83
Ill. Admin. Code Part 305, as it may be amended from time to time, and all
21st Century workers shall be equipped for and conform to OSHA safety
regulations.
6.2 21st Century shall bond its Attachments at the first, last and tenth
poles in each of its cable runs. 21st Century's cable shall be bonded to ComEd's
multi-grounded neutral systems in accordance with ComEd's instructions. At
ComEd's discretion, ComEd may bond 21st Century's cable to ComEd's systems. If
ComEd chooses to perform the bonding, 21st Century agrees to pay when billed
ComEd's costs for bonding 21st Century's cable to ComEd's systems.
6.3 21st Century agrees that it will not place any Attachments on a ComEd
Pole at more than one level without the express, written permission of ComEd.
6.4 All cables shall be attached flush with the ComEd Pole except where
otherwise indicated by ComEd in writing.
6.5 Each Attachment and Power Supply shall be clearly labeled with 21st
Century's name and a phone number where a representative of 21st Century can be
reached, twenty-four (24) hours a day, to receive reports of problems with 21st
Century's Attachments, Facilities or Power Supplies. 21st Century shall
investigate all such reports in a timely manner.
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<PAGE>
7.0 MAINTENANCE, REPAIR, RELOCATION, REMOVAL AND INSPECTION.
7.1 ComEd will maintain the ComEd Poles and repair or replace ComEd Poles
as necessary to fulfill its own service requirements. ComEd is not required to
maintain any ComEd Poles for a period longer than demanded by its own service
requirements. In the event that ComEd determines that it will no longer
maintain a ComEd Pole on which 21st Century has placed an Attachment, Facility,
or Power Supply, ComEd will send written notice to 21st Century that it will no
longer maintain the ComEd Pole and may, at ComEd's discretion, offer 21st
Century alternative pole space or the right to purchase the subject ComEd Pole
pursuant to terms and conditions set forth in the offer.
7.2 21st Century will at its oft expanse maintain its Attachments,
Facilities, and Power Supplies placed on a ComEd Pole in a safe condition, in
thorough repair, and in accordance with ComEd's rules and regulations and in
compliance with all applicable laws, rules and regulations imposed by any
governmental unit or agency having jurisdiction. In particular, all placements
of Attachments, Facilities, and Power Supplies covered by this Agreement shall
at all times meet the requirements and specifications of 83 Ill. Admin. Code
Part 305, as it may be .amended from time to time, and all 21st Century workers
shall be equipped for and conform to OSHA safety regulations. 21st Century
agrees to maintain its Attachments, Facilities, and Power Supplies in such a
manner as will not interfere with the use of any ComEd Pole or facilities placed
thereon by ComEd or other users and shall exercise special precautions to avoid
damaging ComEd's property and facilities or the property and facilities of other
parties on the ComEd Poles. Upon notice by ComEd that any Attachment, Facility,
or Power Supply is interfering with or endangering equipment, property or
facilities of ComEd or other pole users, 21st Century agrees that it will, at
its own expense, immediately take all steps necessary to remedy such
interference or dangerous condition.
7.3 21st Century may at any time remove its Attachments, Facilities or
Power Supplies but shall immediately give ComEd written notice of such removal.
No refund of fees or charges previously billed will be made upon such removal.
-7-
<PAGE>
7.4 Upon notice from ComEd to 21st Century that the use of any ComEd Pole
is forbidden by municipal or public authorities or property owners, the license
granted by this Agreement covering the use of such ComEd Pole shall immediately
terminate. 21st Century agrees to remove all of its Attachments, Facilities, and
Power Supplies from such ComEd Pole at its own expense within thirty (30) days
of receipt of such notice. However, if the municipal or public authority or
property owner requires removal within less than thirty (30) days, then 21st
Century agrees to remove all of its Attachments, Facilities, and Power Supplies
from such ComEd Pole at its own expense within the time set by the municipal or
public authority or property owner. No refund of fees or charges previously
billed will be made upon such removal. If 21st Century fails to remove all of
its Attachments, Facilities, and Power Supplies within the time set forth above,
ComEd may, at its option, effect the removal and 21st Century agrees to pay,
when billed, the costs of such removal.
7.5 21st Century shall, at its own expense, upon notice from ComEd,
relocate, replace or remove its Attachments, Facilities or Power Supplies, or
transfer the Attachments, Facilities or Power Supplies to substitute poles, or
perform any other work in connection with their relocation, replacement or
removal that may be required by ComEd to accommodate the service or operating
requirements of ComEd or any joint owner of a ComEd Pole. If 21st Century fails
to perform any act or work pursuant to this Paragraph in a timely manner as set
forth in ComEd's notice to 21st Century, ComEd may, at its option perform such
act or work and 21st Century agrees to pay, when billed, ComEd's costs and
expenses. 21st Century may request in writing that ComEd relocate, replace or
renew 21st Century's Attachments, Facilities or Power Supplies, or transfer the
Attachments, Facilities or Power Supplies to substitute poles, or perform any
other work in connection with their relocation, replacement or removal. ComEd
may, in its sole discretion, accept or reject 21st Century's written request.
If ComEd accepts 21st Century's written request, 21st Century will pay ComEd its
costs and expenses within thirty (30) days from the date that a bill for such
costs and expenses is rendered by ComEd. ComEd's decision to reject 21st
Century's request that ComEd perform work pursuant to this Paragraph shall not
relieve 21st Century of its duties and obligations under this Paragraph.
7.6 If 21st Century places any Attachments, Facilities or Power Supplies
on ComEd Poles in violation of Section 3 of this Agreement, or fails to remove
all Attachments, Facilities, and Power Supplies following termination of this
Agreement, ComEd may remove such
-8-
<PAGE>
Attachments, Facilities or Power Supplies without incurring any liability and
without any duty to account to 21st Century for the removed property. ComEd will
bill 21st Century for the expense of removal and 21st Century will pay ComEd
such expenses within thirty (30) days from the date of each such bill rendered
by ComEd. The rights contained in this Paragraph are in addition to all other
rights ComEd has under this Agreement including, but not limited to, ComEd's
right to terminate the Agreement and ComEd's right to collect charges for
unauthorized placement of Attachments, Facilities or Power Supplies.
7.7 If ComEd determines that its own service or operating requirements,
including but not limited to considerations of economy and safety, require the
immediate relocation, replacement, removal or disconnection of any-of the
Attachments, Facilities or Power Supplies located on any ComEd Pole, ComEd may,
without notice and at its own expense, affect such relocation, replacement,
removal or disconnection, and may, but need not, transfer the facilities to
substitute poles, or perform any other work that may be required in the
maintenance, replacement, removal or relocation of poles, or facilities located
thereon, or that may be otherwise required to meet the service or operating
needs of ComEd. ComEd shall give 21st Century notice of any such change in 21st
Century's facilities that requires subsequent attention by 21st Century.
7.8 ComEd also reserves the right to make periodic inspections of the
entire plant of 21st Century located within ComEd's service area, or a portion
of that plant, as often as conditions warrant. The cost of such inspection will
be borne by 21st Century. ComEd will bill 21st Century for the cost of such
inspection and 21st Century will pay ComEd such cost within thirty (30) days
from the date of each such bill rendered by ComEd. If ComEd determines that
corrections or changes need to be made to any of 21st Century's Attachments,
Facilities or Power Supplies in order to ensure ComEd's service or operating
requirements, including considerations of economy and safety, 21st Century will
make such corrections or changes at its own expense, in a timely manner.
7.9 Neither the occurrence nor the nonoccurrence of any inspection will
relieve 21st Century of any responsibility, obligation or liability assumed
under this Agreement.
8.0 CHARGES.
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<PAGE>
21st Century agrees to pay ComEd all fees and charges set forth in this
Section within thirty (30) days from the date of each bill rendered by ComEd.
8.1 Annual Fee.
----------
8.1.1 Century agrees to pay *** per year for each Attachment or
Power Supply for which 21st Century has been issued a permit to attach to or
place on a ComEd Pole. Such Annual Fee shall be paid in the year that ComEd
grants a permit for the placement of such Attachment or Power Supply and
thereafter will be payable on or before the first day of January of each year
during which this Agreement remains in effect.
8.1.2 Payment of the Annual Fee to ComEd shall not in ,-any way
affect 21st Century's obligations or duties to pay monies, whether in the form
of fees, charges, or otherwise, to any joint owner of a ComEd Pole.
8.2 Charge for Unauthorized Attachment: 21st Century recognizes that
----------------------------------
ComEd incurs administrative and other expenses when an unauthorized placement is
made on a ComEd Pole. Accordingly, 21st Century agrees to pay ComEd *** per
ComEd Pole for each Attachment or other placement made by 21st Century in
violation of Section 3, or any other Section, of this Agreement. This charge
will be paid in addition, and without prejudice, to any of the other rights and
remedies ComEd may have under this Agreement in the event of 21st Century's
violation of the terms and conditions of this Agreement, including but not
limited to ComEd's right to collect an Annual Fee for the ComEd Pole on which
the unauthorized placement is made, ComEd's right to remove or relocate the
Attachment, Facility, or Power Supply, and ComEd's rights to terminate this
Agreement.
8.3 Interest. 21st Century agrees to pay interest at *** on all rates and
--------
charges not timely paid, on and from the date that payment is due.
8.4 Taxes. Each party will be solely responsible for any taxes or
-----
assessments levied on any of its wires, cables, equipment or facilities.
___________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-10-
<PAGE>
9.0 RESOLUTION OF DISPUTES.
9.1 The parties agree to address disagreements and disputes relating to
technical fee and billing issues arising in the implementation of this Agreement
through the procedures set forth in this Section before resorting to legal
proceedings.
9.2 Each party shall designate an employee who will be the "Dispute
Coordinator" for purposes of this Section and a more senior employee who will be
the "Review Manager" for purposes of this Section. The employees initially
designated by each party as their Dispute Coordinators and Review Managers are
set forth in Exhibit C to this Agreement. Parties may change such designation
by giving notice of such change pursuant to Section 18 of this Agreement.
9.3 Each party shall raise any questions, disagreements or disputes, of
the type described in Paragraph 9.1, arising in the implementation of this
Agreement with the Dispute Coordinator.
9.4 Where the Dispute Coordinators have been unable to resolve any such
disagreement or dispute, within thirty (30) days of notice of such dispute, the
parties will refer such disagreement or dispute to the Review Managers for the
respective parties who will work together to resolve the relevant issue in a
manner that meets the interests of both parties.
9.5 If the parties, after complying with the provisions of Paragraphs 9.3
and 9.4, are unable to resolve the disagreement or dispute within sixty (60)
days, and the dispute involves more than One Hundred Thousand Dollars
($100,000.00), they agree to submit such disagreement or dispute to a neutral
independent mediator for non-binding mediation. If a mediator cannot be agreed
upon, one will be selected by the CPR Institute for Dispute Resolution.
9.6 The parties agree that the following timetable shall apply to the
resolution of all matters, unless an extension is agreed to by the parties: (i)
for all billing matters, the mediation shall be completed within thirty (30)
days of the date that the aggrieved party provides notice to
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<PAGE>
the other party that mediation is required; and (ii) for all other matters,
mediation shall be completed within sixty (60) days of the date the aggrieved
party provides notice to the other party that mediation is required.
10.0 LIABILITY AND INDEMNIFICATION.
10.1 ComEd has the right to maintain, replace, relocate, and remove ComEd
Poles and to maintain, replace, relocate, remove, and operate its facilities in
such manner as will enable it to fulfill its own service requirements. ComEd
shall not be liable to 21st Century, or any customer of 21st Century, or any
other person, for any interruption of service or for any interference with the
operation of 21st Century's Attachments, Facilities, Power Supplies, or other
equipment arising in any way out of such maintenance, replacement, relocation,
removal or operation.
10.2 ComEd will not be liable for any noise, induced voltages, currents or
other interference in the facilities owned by 21st Century.
10.3 21st Century agrees to indemnify, hold harmless and defend ComEd from
and against any and all claims and demands for damages to property, or for
injury or death to persons, that are related to, arise out of, or are caused by,
the placement of 21st Century's Attachments, Facilities, and Power Supplies,
including claims arising out of or related to repair and maintenance work
performed by 21st Century, its employees, agents, contractors or subcontractors.
This indemnification shall include, but not be limited to, claims made under any
workman's compensation law or under any plan for employee's disability and death
benefits (including, without limitation, claims and demands that may be asserted
by employees, agents, contractors, and subcontractors). 21st Century shall
immediately notify ComEd of any such claims, demands, damages, injuries or
deaths, and shall provide a written report, or other pertinent material or
information if requested.
10.4 21st Century agrees to indemnify ComEd, its successors and assigns,
against any and all claims and demands for damages or losses resulting from any
interruption of 21st Century's or ComEd's service, or the service of ComEd's or
21st Century's customers, if such interruption in service arises out of or is in
any way related to the exercise by 21st Century of rights granted under this
Agreement.
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<PAGE>
10.5 21st Century agrees to be liable for and promptly reimburse ComEd or
other ComEd Pole users for expenses incurred in repairing or replacing ComEd
Poles or facilities damaged or destroyed if such damage or destruction is
caused, in whole or in part, by the presence on ComEd Poles of 21st Century's
Attachments, Facilities or Power Supplies, or by an act, acts or failure to act
on the part of 21st Century, its agents, employees, contractors, sub-contractors
or customers.
10.6 21st Century's duties and obligations to indemnify ComEd shall survive
termination of this Agreement.
11.0 REPRESENTATIONS AND WARRANTIES.
11.1 Power and Authority. Each party represents and warrants that it is a
-------------------
corporation duly organized, validly existing, in good standing under the laws of
the State in which it is incorporated and has full power and authority to
execute this Agreement and undertake the responsibilities and obligations
.contemplated by it.
11.2 Enforceability. Each of the parties represents and warrants that the
--------------
execution and performance of this Agreement have been duly authorized by all
necessary corporate actions, that the Agreement constitutes a valid and binding
obligation of each of them, enforceable against each of them in accordance with
its terms, and that they have independently reviewed the Agreement, including
the charges set forth in Section 8, and concluded that the Agreement is just and
reasonable.
11.3 Insurance. 21st Century represents and warrants that it maintains and
---------
will continue to maintain policies of insurance to protect the parties to this
Agreement and other users from and against any and all claims, demands, actions,
judgments, costs, expenses and liabilities that may arise or result, directly or
indirectly, from or by reason of any loss, injury, or damage due to 21st
century's placement of its Attachments, Facilities, or Power supplies on ComEd
Poles so long as this Agreement is in effect. 21st Century represents and
warrants that during the entire Term of this Agreement it will carry Workman's
Compensation Insurance and each of the
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following types of insurance in amounts acceptable to ComEd, but, in no event,
less than *** as to any one person and *** as to any one occurrence: (i)
property liability insurance, (ii) personal injury liability insurance, and
(iii) general liability insurance. 21st century represents and warrants that
ComEd shall be named as an additional insured on each such policy of insurance.
21st Century agrees to submit to ComEd certificates from each insurance company
stating the named insureds and the type, amount and term of the insurance and
further stating that the insurance company will not cancel or change any policy
of insurance issued to 21st Century except after thirty (30) days' written
notice to ComEd.
11.4 Bond. 21st Century represents and warrants that during the entire Term
----
of this Agreement it will maintain a bond to guarantee the payment of all sums
that may become due from 21st Century to ComEd under the terms of this
Agreement. At the time this Agreement becomes effective, 21st Century agrees to
furnish a bond to ComEd in the amount shown on the Bond Schedule attached as
Exhibit D for the number of ComEd Poles being used throughout the term of this
Agreement. The bond shall be in a form and with a surety acceptable to ComEd.
If 21st Century's use of ComEd Poles at any time exceeds the number of poles
covered by the bond, 21st Century represents and warrants that it will
immediately raise the total bond amount to the level which satisfies the
requirement set forth in the Bond Schedule.
12.0 DEFAULT, TERMINATION AND OTHER REMEDIES.
12.1 Either party may terminate this Agreement upon the discovery of a
breach of the other party of one of the representations or warranties set forth
in this Agreement and upon written notification to the other party.
12.2 Either party may terminate this Agreement upon the default of the
other party if the default is not timely cured after written notification.
12.3 If 21st Century fails to comply with any of the provisions of this
Agreement, it shall be in default and ComEd shall provide written notification
of the default. If 21st Century fails to correct the default within thirty (30)
days after receiving written notice of such default, then ComEd may, at its
discretion, terminate this entire Agreement or terminate a permit or
__________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
permits granted pursuant to Section 4 this Agreement to place Attachments,
Facilities or Power Supplies on any particular ComEd Poles. These remedies are
not exclusive, but are in addition to all other rights and remedies that ComEd
may have.
12.4 If at any time 21st Century loses a franchise to use the public
streets and highways in any area included in Exhibit A to this Agreement, ComEd
may terminate this entire Agreement or terminate a permit or permits granted
pursuant to Section 4 of this Agreement.
12.5 Upon termination of any permit to use ComEd Poles granted pursuant to
this Agreement, or upon termination of the entire Agreement, 21st century agrees
to immediately remove all Attachments, Facilities, and Power Supplies from all
ComEd Poles affected by the termination at its own cost. If 21st Century fails
to do so, ComEd may remove the Attachments, Facilities or Power Supplies without
incurring any liability and without any duty to account to 21st Century for the
removed property. ComEd will bill 21st Century for the expense of removal and
21st Century will pay ComEd such expenses when billed by ComEd.
12.6 In the event that 21st Century defaults under this Agreement and ComEd
elects to terminate this Agreement, or upon termination of this Agreement, 21st
Century shall not be relieved of its duties or obligations under this Agreement
so long as any 21st Century Attachment, Facility, or Power Supply remains on any
ComEd Pole.
12.7 Unless this Agreement is otherwise terminated in its entirety, this
Agreement shall automatically terminate on the last day of the Term of this
Agreement as defined in Section 19'.
13.0 ASSIGNMENT.
13.1 21st Century agrees that it will not assign or transfer the privileges
granted by this Agreement without the prior written consent of ComEd, which
consent will not be unreasonably withheld. 21st Century recognizes that ComEd
will incur administrative and other expenses when it investigates a request to
assign or transfer the privileges granted by this Agreement and 21st Century
agrees to pay all such reasonable costs when billed.
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<PAGE>
13.2 An unauthorized assignment or transfer of this Agreement includes, but
is not limited to, 21st Century explicitly granting permission or otherwise
allowing, explicitly or implicitly, any party other than 21st Century to use
21st Century Attachments, Facilities or Power supplies, or any portion thereof,
which are placed on a ComEd Pole.
13.3 This Agreement shall extend to and be binding upon any successors or
assigns of 21st Century, whether or not written permission for assignment or
transfer has been granted, and on ComEd's successors and assigns.
13.4 21st Century will not be released of any of its duties or obligations
under this Agreement, including, but not limited to 21st Century's duties and
obligations to indemnify ComEd as set forth in Section 10 of this Agreement,
except by the express written consent of ComEd. ComEd's consent to the
assignment or transfer of all or part of this Agreement shall not constitute
consent to release 21st Century of any of its duties or obligations under this
Agreement unless such intent is explicitly set forth by ComEd in writing.
13.5 21st Century recognizes and agrees that ComEd will incur extra
administrative and other expenses if 21st Century makes an unauthorized
assignment or transfer of this Agreement. Accordingly, to cover such
administrative costs, 21st Century agrees to pay ComEd *** for each
unauthorized assignment or transfer of this Agreement. These charges will be
made in addition, and without prejudice, to any of the other rights and remedies
ComEd may have under this Agreement in the event of 21st Century's violation of
the terms and conditions of this Agreement, including but not limited to ComEd's
right to collect Annual Fees, ComEd's right to remove or relocate unauthorized
placements of Attachments, Facilities or Power Supplies, and ComEd's right to
terminate this Agreement.
14.0 OTHER USERS.
This Agreement does not limit the right of ComEd to make additional
contracts with other persons, firms, corporations, or associations for use of
ComEd Poles or facilities placed thereon, nor is it intended to limit the rights
or privileges previously conferred by ComEd to others.
__________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
15.0 WAIVER OF TERMS OR CONDITIONS.
15.1 The failure of ComEd to enforce or insist on compliance with any of
the terms and conditions of this Agreement shall not constitute a waiver or
relinquishment of any such terms or conditions.
15.2 The acceptance of payment by ComEd of any of the fees or charges set
forth in this Agreement shall not constitute a waiver of any breach or violation
of the terms of this Agreement.
16.0 COMPLIANCE WITH APPLICABLE LAWS.
21st Century agrees to comply with all applicable laws, rules and
regulations relating to the installation, maintenance and use of its
Attachments, Facilities, and Power Supplies. 21st Century is solely responsible
for identifying and complying with all such rules and regulations.
17.0 REGULATORY APPROVAL.
17.1 This Agreement may be filed with, and may be subject to the approval
of, the Illinois Commerce Commission. If this Agreement is subject to the
approval of the Illinois Commerce Commission, the parties agree to jointly seek
such approval; if the Commission does not then grant such approval, this
Agreement shall terminate as of the day such approval is denied.
17.2 If the Annual Fee, or any other fee, charge or expense set forth in
this Agreement is subject to the approval of the Illinois Commerce Commission,
or any other administrative, judicial, or legislative body, and the Annual Fee
or other fee, charge or expense is not approved by the Illinois Commerce
commission or other administrative, judicial, or legislative body, this
Agreement shall terminate as of the day such approval is denied.
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<PAGE>
18.0 NOTICE.
Except where otherwise indicated, notices required under this Agreement
shall be sufficient if sent by certified mail return receipt requested, postage
prepaid, to the parties at the addresses set forth below, or to such other
addresses as the parties may hereafter substitute by written notice given in the
manner prescribed in this Paragraph.
If to Commonwealth Edison Company:
Chris Patchaouras
Commonwealth Edison Company
1319 South First Avenue
Maywood, Illinois 60153
With a copy to:
Commonwealth Edison Company
Office of the General Counsel
125 South Clark Street, Suite 1535
Chicago, Illinois 60603
If to 21st Century Cable TV, Inc.:
(insert name)
21st Century Cable TV, Inc.
North Pier Terminal
401 East Illinois Street Suite 535
Chicago, Illinois 60611
19.0 TERM OF AGREEMENT
This Agreement shall become effective as of the Effective Date and shall
remain in affect for a period of *** years unless otherwise terminated
pursuant to this Agreement.
____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
19.1 Option To Renew. 21st Century shall have an option to renew this
---------------
Agreement for one additional *** year term provided that 21st Century is not in
default under the terms and conditions of this Agreement and provided 21st
Century agrees to pay the fee indicated on Exhibit E attached hereto and all
other fees stated herein.
20.0 AMENDMENT.
Neither this Agreement nor any of the provisions hereof can be amended,
changed, waived, discharged or terminated, except by an instrument in writing
signed by both parties.
21.0 ATTORNEYS' FEES, WAIVER OF JURY TRIAL.
If either party institutes an action or proceeding against the other
relating to the provisions of this Agreement or any default hereunder, the
unsuccessful party to such action or proceeding will reimburse the successful
party therein for the reasonable expenses of attorneys fees, disbursements and
costs, and litigation expenses incurred by the successful party, in an amount
awarded by a court. The parties each hereby waive the right (if any) to trial
by jury in any such action or proceeding.
22.0 ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between ComEd and 21st
Century. --This Agreement supersedes, in all respects, all prior written or oral
agreements, if any, between the parties and there are no agreements,
understandings, warranties or representations between ComEd and 21st Century
except as set forth herein.
23.0 CONSTRUCTION OF AGREEMENT.
ComEd and 21st Century have each read and fully understand the terms of
this Agreement; each has had the opportunity to have this Agreement reviewed by
counsel. The rule of construction providing that ambiguities in a contract
shall be construed against the drafter shall not apply.
________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
24.0 ATTACHMENTS.
All schedules or attachments annexed hereto are incorporated herein for all
purposes as though set forth herein in full.
25.0 APPLICABLE LAW.
The laws of the State of Illinois shall govern the construction of this
Agreement.
IN WITNESS WHEREOF, the parties to this Agreement by their duly authorized
representatives have executed this Agreement.
COMMONWEALTH EDISON COMPANY
By: /s/ Paul D. McCoy
--------------------------------
Printed Name: Paul D. McCoy
----------------------
Title: Vice President
-----------------------------
Date: 4/3/96
------------------------------
21ST CENTURY CABLE TV, INC.
By: /s/ Glenn W. Milligan
--------------------------------
Printed Name: Glenn W. Milligan
---------------------
Title: President & CEO
-----------------------------
Date: 3/26/96
-----------------------------
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Exhibit A
[SURVEY MAP]
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<PAGE>
Exhibit B
[B-1 Application for Permission to Make Attachment
B-2 Permit granting permission to make attachment]
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<PAGE>
Exhibit C
Commonwealth Edison Company
- ---------------------------
Dispute Coordinator:
Chris Patchaouras
Commonwealth Edison Company
1319 South First Avenue
Maywood, Illinois 60153
Review Manager:
Gregory V. Welch
Commonwealth Edison Company
1319 South First Avenue
Maywood, Illinois 60153
21st Century Cable TV, Inc.
- --------------------------
Dispute Coordinator:
[insert name, address and telephone number]
Review Manager:
[insert name, address and telephone number]
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EXHIBIT D
BOND SCHEDULE
-------------
<TABLE>
<CAPTION>
AMOUNT OF BOND REQUIRED
NUMBER OF POLES EDISON POLES
--------------- ------------
<S> <C>
0-100 ***
101-200 ***
201-300 ***
301-400 ***
401-500 ***
501-600 ***
601-700 ***
701-800 ***
801-900 ***
901-1000 ***
1001-2200 ***
2200 - up ***
</TABLE>
In the event that Licensee has executed more than one Pole Lease Agreement,
Licensee may, with Licensor's written permission, in lieu of furnishing a single
bond for each such agreement, furnish either (1) a single bond which covers the
obligations under all such Agreements, or (2) two or more bonds, each of which
is written in an amount called for under this Bond Schedule for the total number
of poles for which permits for pole attachments have been granted in the areas
-------
to which the Agreements covered by any such bond relate.
* Plus $*** for each 100 poles in excess of 1,000 poles. The amount of bond
required, up to a maximum of $***, shall be equal to or in excess of the amount
thus determined for the number of Edison poles covered by approved permits. In
----------------
order to minimize the need for frequent change in the Bond amount, it is
recommended the amount be such that it cover proposed expansion by the COMM
----
Company within the succeeding six to twelve months.
____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-24-
<PAGE>
COMMUNICATION (COMM) GUY REQUIREMENTS
-------------------------------------
POLES SOLELY OWNED BY EDISON OR
-------------------------------
JOINTLY OWNED WITH A TELEPHONE CO
---------------------------------
1. Guy strain due to COMM shall be calculated for heavy ice loading conditions
specified in 83 Ill. Admin. Code Part 305.
2. COMM may provide its own guy, rod and anchor to hold its unbalanced strain
or may utilize Edison and telephone company anchor and rod providing COMM
specifies its strain in down guy an permit application sent to Edison and
the telephone company and providing Edison and the telephone company
approve the installation or upon telephone company approval may utilize
solely owned telephone company guying facilities.
3. COMM shall provide for guying under one of the following plans to hold
unbalanced strain due to facilities.
a. COMM may install its anchor, rod and down guy, providing
sufficient space exists to avoid interference with present guys
and anchors --- during and following installation.
b. COMM may attach to an existing or replaced Edison anchor rod
(requires Edison approval only).
c. COMM may utilizing, replaced or new solely owned telephone
company anchors, rods and guys, or attach COMM guy to sale
telephone company rod and anchor (requires telephone company
approval only).
d. COMM may utilize existing or replaced telephone company guy and
jointly owned Edison and telephone company rod and anchor (Edison
and telephone company approval required).
[CHART]
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<PAGE>
POLE MOUNTED COMMUNICATION (COMM)) CABINET
ON JOINT EDISON & TELEPHONE CO POLE
(ONLY 1-CABINET PER POLE)
[CHART]
Notes:
1. COMM shall not place power supply or other pole mounted equipment cabinets
on:
(a) Corner poles
(b) Transformer poles
(c) Capacitor poles
(d) Disconnect and/or fuse poles
(e) Recloser poles
(f) Primary-cable terminal poles
(g) Other equipment poles so designed by local forces
(h) Any joint pole so designated by telephone co.
(i) Any pole with a telephone co.
2. The COMM System shall be designed in such a way that no power supply can be
electronically backed from another power supply through the COMM Systems.
-26-
<PAGE>
MINIMUM CLEARANCE BETWEEN
EDISON & COMMUNICATION (COMM) FACILITIES
[CHART]
Notes:
1. Telephone company will specify clearances between telephone and
Communication facilities.
2. On each jointly used pole, standard or special space assigned to Edison and
uppermost height of communication facility attachment in telephone space
varies with height of pole, and mutual agreement between Edison and each
telephone company.
3. Vertical separation shall be a minimum of 48" between pole attachments and
a minimum of 40" between bottom of supply conductors and top of
communication equipment.
4. On solely owned Edison poles, Edison will specify maximum attachment height
for Communication facilities.
-27-
<PAGE>
MINIMUM MID SPAN CLEARANCES
[CHART]
-28-
<PAGE>
Exhibit 10.6
AMERITECH - ILLINOIS
Structure License Agreement
This Agreement, effective the 14th day of November, 1996 between Ameritech,
hereinafter called Licensor, and 21st Century Cable TV, Inc., located at 455 N.
Cityfront Plaza Drive, #2950 in Chicago, Illinois hereinafter called Licensee.
WITNESSETH:
Whereas, Licensee proposes to furnish communication services in the municipality
of Chicago, Illinois.
Whereas, Licensee will need to place and maintain aerial and/or underground
communications facilities within the area described above and desires to place
such communications facilities on poles and/or in the conduit system of
Licensor; and,
Whereas, Licensor is willing to permit to the extent it may lawfully do so, the
placement of said communications facilities on or within Licensor's facilities
where reasonably available and where such use will not interfere with Licensor's
service requirements or the use of its facilities by others.
Now therefore, in consideration of the mutual covenants, terms and conditions
herein contained, the parties do hereby mutually covenant and agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Agreement:
A. ANCHOR ROD
A metal rod connected to an anchor and to which a guy strand is attached. Also
known as, a "guy rod".
B. AMERITECH
As used herein "AMERITECH" means Illinois Bell Telephone Company aka Ameritech -
Illinois, a corporation organized and existing under the laws of the State of
Illinois, having its principal office in the City of Chicago, Illinois.
C. CONDUIT
A structure containing one or more ducts.
D. CONDUIT SYSTEM
Any combination of ducts, conduit(s), and manholes joined to form any integrated
system but not including cable vaults or buildings owned or controlled by
Licensor or in the Licensor's remote terminals or controlled environmental
vaults..
E. DUCT
A single enclosed raceway for communications cables.
F. GUY STRAND
A metal cable of high tensile strength which is attached to a pole and anchor
rod (or another pole) for the purpose of reducing pole stress.
G. INNERDUCT
Normally a 1 - 1/4" or 1" duct placed in groups of 2 or 3 inside a larger duct.
-2-
<PAGE>
H. JOINT OWNER
A person, firm or corporation having an ownership interest in a pole and/or
anchor rod with Licensor.
I. JOINT USER
A party who owns poles or anchor rods to which Licensor is extended or may
hereafter be extended joint use privileges or to whom Licensor has extended or
may hereafter extend joint use privileges of Licensor's poles or anchor rods.
J. LICENSEE
A person, firm, corporation or entity which is a telecommunications carrier, as
defined in 220 ILCS 5/13-202 or the owners of a cable television system as
defined in 47 U.S.C. sec 522(5).
K. LICENSEE'S COMMUNICATIONS FACILITIES
The cables and associated equipment and hardware utilized by Licensee in
providing communications service and located between Licensee-provided terminal
equipment and/or patron-provided terminal equipment.
L. LICENSOR'S POLES
Poles owned by Licensor in whole or in part.
M. MANHOLE
An opening in a conduit system which persons may enter for the purpose of
installing and maintaining communications facilities.
N. MAKE-READY WORK
The work required (including field survey, rearrangement and/or transfer of
existing facilities on a pole or in a conduit system, replacement of a pole or
any other changes) to
-3-
<PAGE>
accommodate Licensee's communication facilities on Licensor's poles or in
Licensors conduit system.
O. OTHER LICENSEE
Any entity, other than Licensee herein or a Joint User, to whom Licensor has or
hereafter shall extend the privilege of attaching communications facilities to
Licensor's poles or occupying Licensor's conduit system.
P. PATRON
A person, firm or corporation who receives Licensee's communications service.
Q. POLE ATTACHMENT
Any item of Licensee's communication facilities in direct contact with Licensors
pole.
R. SUSPENSION STRAND
A metal cable of high tensile strength attached to pole and used to support
communications facilities. Also known as "messenger".
Article II
Scope of Agreement
A. Subject to the provisions of this Agreement, Licensor agrees to issue to
Licensee for any lawful communications purpose, revocable, non-exclusive
permits authorizing the attachment of Licensee's communications facilities
to Licensor's poles.
B. Subject to the provisions of this Agreement, Licensor agrees to issue to
Licensee for any lawful communications purpose, revocable, non-exclusive
Permits authorizing the placing of Licensee's communications facilities in
Licensors conduit system.
-4-
<PAGE>
C. Nothing contained in this Agreement shall be construed to compel Licensor
to construct, retain, extend, place or maintain any pole, or other
facilities not needed for Licensor's own service requirements.
D. Nothing contained in this Agreement shall be construed as a limitation,
restriction, or prohibition against Licensor with respect to any agreement
and/or arrangement which Licensor has heretofore entered into, or may in
the future enter into, with others not parties to this Agreement regarding
the poles and conduit systems covered by this Agreement. The rights of
Licensees shall at all times be subject to any such existing agreement
and/or arrangement.
E. This Agreement may be subject to approval by the Illinois Commerce
Commission.
Article III
Fees and Charges
A. Licensee agrees to pay to Licensor the fees and charges as specified
herein and in accordance with the terms and conditions of Appendix 1,
attached hereto and made a part hereof.
B. Nonpayment of any amount due under this Agreement shall constitute a
default of this Agreement.
C. Licensee shall furnish bond in a form of satisfactory to Licensor or other
satisfactory evidence of financial security in such amount as Licensor from
time to time may require, in an initial amount of $*** for each
municipality to guarantee the performance of all of Licensee's obligations
hereunder. The amount of the bond or financial security shall not operate
as a limitation upon the obligations of the Licensee hereunder.
D. At the expiration of one year from the date of this agreement, and at the
end of every six month period thereafter, changes in the amount of the fees
and charges specified in Appendix I may be made by Licensor upon one month
prior written notice to Licensee, and Licensee agrees to pay such changed
fees and charges.
_________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-5-
<PAGE>
Specifications
Notwithstanding any other provision of this Agreement, Licensee may
terminate this agreement at the end of such notice period if the change in
fees and charges is not acceptable to Licensee, by giving Licensor written
notice of its election to terminate this Agreement at least 15 days prior
to the end of such notice period.
E. Changes or amendments to Appendix I shall be effected by the separate
execution of Appendix I as so modified. The separately executed Appendix I
shall become a part of and be governed by the terms and conditions of this
Agreement.
Article IV
Advance Payment
A. Licensee shall make an advance payment to the Licensor unless alternative
methods have been negotiated prior to:
1. any undertaking by Licensor of a field survey in an amount
specified by Licensor sufficient to cover the estimated charges
for completing such field survey.
2. any performance by Licensor of any make-ready work required in
an amount specified by Licensor sufficient to cover the
estimated charges for completing the required make-ready work.
B. The amount of the advance payment required will be credited against the
charge for such field survey and/or make-ready work.
C. Where the advance payment made by Licensee to Licensor for field survey or
make ready work is less than the charge for such work, Licensee agrees to
pay Licensor all sums due in excess of the amount of the advance payment.
D. Where the advance payment made by Licensee to Licensor for field survey or
make ready work exceeds the charge for such work, Licensor shall refund the
difference to Licensee.
Article V
-6-
<PAGE>
Specifications
A. Licensee's communications facilities shall be placed and maintained in
accordance with the requirements and specifications of the latest edition
of the Bell System Manual of Construction Procedures (Blue Book), the
National Electrical Code (NEC), the National Electrical Safety Code (NESC),
the rules and regulations of the Occupational Safety and Health Act (OSHA)
and General Order 160 of the Illinois Commerce Commission or any governing
authority having jurisdiction over the subject matter. Where a difference
in specifications may exist, the more stringent shall apply.
B. If any part of Licensee's communications facilities is not so placed and
maintained and Licensee has not corrected the violation within 15 days from
the date of written notice thereof from Licensor, Licensor may in addition
to any other remedies Licensor may have hereunder, remove Licensee's
communications facilities from any or all of Licensor's poles or perform
such other work and take such other action in connection with said
communications facilities that Licensor's employees or performance of
Licensor's service obligations at the cost and expense to Licensee in
accordance with Appendix I and without any liability on the part of
Licensor, provided, however, that when in the sole judgment of Licensor
such a condition may endanger the safety of Licensor's employees or
interfere with the performance of Licensor's service obligations, Licensor
may take such action without prior notice to Licensee.
Article VI
Legal Requirements
A. Licensee shall be responsible for obtaining from the appropriate public
and/or private authority any required authorization to construct, operate
and/or maintain its communications facilities on public and private
property at the location of Licensor's pole and conduit system which
Licensee uses. Licensor reserves the right to terminate an existing Permit
or refuse to grant a new Permit where such evidence is unsatisfactory.
-7-
<PAGE>
B. The parties hereto shall at all times observe and comply with, and the
provisions of the Agreement are subject to, all laws, ordinances,
regulations and use restrictions which in any manner affect the rights and
obligations of the parties hereto under this Agreement, so long as such
laws, ordinances, regulations, or restrictions remain in effect.
C. No Permit granted under this Agreement shall extend to any of the
Licensor's poles or conduit system where the placement of Licensee's
communications facilities would result in a forfeiture of the rights of
Licensor, Joint Owners or Joint Users, to occupy the property on which such
poles or conduit system are located. If the existence of Licensee's
communications facilities on Licensor's pole or in Licensor's conduit
system would cause a forfeiture of the right of the Licensor, Joint Owners
or Joint Users, or all to occupy such property, Licensee agrees to remove
its communications facilities forthwith upon notification by Licensor. If
said communications facilities are not so removed, Licensor may perform
and/or have performed such removal without liability on the part of
Licensor and Licensee agrees to pay Licensor, Joint Owners or Joint User or
all, the cost thereof and for all losses and damages that may result.
Article VII
Issuance of Permits
A. Before Licensee shall attach to any pole and/or occupy any duct of
Licensor. Licensee shall make Application for and have received an
appropriate permit. (Appendix III, Forms P-1 and P-2 and/or C-1 through C-
2).
B. Licensee agrees to limit filing of Applications for Pole Attachment Permits
(Appendix III, Forms P1 and P2) to include not more than 300 poles on any
one Application and 1500 poles on all Applications which are pending
approval by Licensor at any one time. Such limitations will apply to
Licensor's poles located within a single plant construction district of
Licensor. Licensee further agrees to designate a desired priority of
completion of the field survey and make-ready work for each Application
relative to all other of its Applications on file with Licensor at the same
time.
-8-
<PAGE>
Article VIII
Make-Ready Requirements
A. Pole
1. When an Application for Pole Attachment Permit is submitted by
Licensee a field survey will be required for each pole for which
attachment is requested to determine the adequacy of the pole to
accommodate Licensee's communications facilities. Licensor will advise
the Licensee will advise the Licensee in writing of the estimated
charges that will apply for such field survey. (Appendix III, Form A-
1, Authorization for Field Survey/Make-Ready Work).
2. The field survey may be performed jointly by representatives of
Licensor, Joint Owner and/or Joint User and Licensee.
3. Licensor reserves the right to refuse to grant a Pole Attachment
Permit for attachment to a pole when Licensor determines that the
communications space on such pole is required for its exclusive use or
that of a governmental entity with pole attachment rights and that the
pole may not reasonably be rearranged or replaced to accommodate
Licensee's communications facilities.
4. In the event Licensor determines that a pole to which Licensee desires
to attach is inadequate or otherwise needs rearrangement of the
existing facilities thereon to accommodate the Licensee's
communications facilities. Licensor will advise the Licensee in
writing of the estimated make-ready charges that will apply (Appendix
III, Form A-1, Authorization for Field Survey/Make-Ready Work).
Licensee shall have 30 days from the date of said Form A-1 to indicate
its authorization for completion of the required make-ready work and
acceptance of the resulting charges.
5. Any required make-ready work will be performed following receipt by
Licensor of completed Form A-1. Licensee shall pay Licensor for all
make-ready work completed in accordance with the provisions of this
Agreement and shall also reimburse the owner(s) of other facilities
attached to said poles for any expense incurred by it or them in
transferring or rearranging the facilities
-9-
<PAGE>
of such other owners to accommodate Licensee's pole attachment.
Licensee shall not be entitled to reimbursement of any amounts paid to
Licensor for pole replacements or for rearrangement of facilities on
Licensor's poles by reason of the use by the Licensor or other
authorized user(s) of any additional capacity resulting from such
replacement or rearrangement.
6. Should Licensor, a Joint Owner or a Joint User or a governmental
entity with pole attachment rights, for its own service requirements,
need to attach additional facilities to any of Licensor's poles, to
which Licensee is attached, Licensee's will either rearrange its
communications facilities on the pole or transfer them to a
replacement pole as determined by Licensor so that the additional
facilities of Licensor, Joint Owner or Joint User [or governmental
entity] may be attached. The rearrangement or transfer of Licensee's
communications facilities will be made at Licensee's sole expense.
10. Permit Applications received by Licensor from two or more Licensees
for accommodations on the same pole will be processed by Licensor in
attachment accordance with the procedures detailed in Appendix II
attached hereto.
11. Whenever it is necessary for Licensor to replace its pole to
accommodate Licensee's communications facilities, Licensor may grant
Licensee the option. where possible and acceptable to Joint Owner or
Joint User, to become the owner of the pole upon payment of all
replacement costs on a fully installed basis. This option is subject
to the further conditions that:
a. Licensee grants Licensor and any Joint Owner or Joint User
the right to attach their respective facilities to such
replacement pole upon the same terms and conditions as set
forth in this Agreement and
b. that any governmental entity having attachment rights to
Licensor's pole shall be granted similar attachment rights
under the same terms and conditions as apply to the pole
being replaced.
-10-
<PAGE>
12. Should Licensee exercise these options and become the pole owner, it
agrees to maintain the pole in a safe and serviceable condition for
all attachees to the pole for as long as Licensee owns an interest in
the pole.
B. Anchor Rod
1. Licensee may attach its guy strand to Licensor's existing anchor rod
at no charge where Licensor determines that adequate capacity is
available; provided that Licensee agrees to secure any necessary
right-of-way therefore from the appropriate property owner.
2. Should Licensor, Joint Owner or Joint User attached to the anchor rod,
need for its own service requirements to increase its load on the
anchor rod to which Licensee's guy is attached, Licensee will either
rearrange its guy strand on the anchor rod or transfer it to a
replacement anchor as determined by Licensor.
The cost of such rearrangement and/or transfer, and the placement of a
hew or replacing anchor will be at the sole expense of Licensee agrees
to pay.
3. If Licensee does not rearrange or transfer its guy strand within 15
days following the date of written notice from Licensor regarding such
requirement, Licensor, Joint Owner or Joint User may perform, or have
performed, the work involved and Licensee agrees to pay the full costs
thereof.
C. Conduit System
1. When an Application for Conduit Occupancy Permit (Appendix III, Form
C-1) is submitted by Licensee a record check by the Licensor will be
required to determined the availability of the conduit system to
accommodate Licensee's communications facilities. Licensor will advise
the Licensee in writing of the estimated charges that will apply for
field verification and make ready work required. (Appendix III,
Form A-1, Authorization for Field Survey/Make-Ready Work).
2. The Licensor retains the right, in its sole judgment, to determine
whether such requested space is or is not available. The Licensor will
notify the Licensee if the requested space is not available.
-11-
<PAGE>
3. If, in the Licensor's sole discretion, the requested space may be made
available by rearrangement of the existing communications facilities
therein, Licensor will advise the Licensee in writing of the estimated
make-ready charges that will apply (Appendix III, Form A-1,
Authorization for Field Survey Make-Ready Work). Licensee shall have
30 days from the date of said Form A-1 to indicate its authorization
for completion of the required make-ready work and acceptance of the
resulting charges.
4. Should Licensor [or governmental entity with whom Licensor has an
agreement granting such entity priority access to and occupancy of
Licensor's conduit system] need, for its own service requirements, any
of the space occupied by Licensee's communications facilities in
Licensor's conduit system and, if Licensor advises Licensee that
Licensee's communications facilities can be accommodated otherwise in
Licensor's conduit system, Licensee shall be required to rearrange its
communications facilities in the manner designed by the Licensor and
at the expense of Licensee. If Licensee has not so rearranged its
communications facilities within 15 days of the date of written notice
from Licensor requesting such rearrangement, Licensor may perform to
have performed such rearrangement without any liability on the part of
the Licensor and Licensee agrees to pay the costs thereof.
D. In performing all make-ready work to accommodate Licensee's communications
facilities. Licensor will endeavor to include such work in its normal work
load schedule.
Article IX
CONSTRUCTION, MAINTENANCE AND REMOVAL OF COMMUNICATIONS FACILITIES
A. Licensee may attach to the poles of the Licensor or place in the conduit
systems of the Licensor, only those Licensee communication facilities
authorized to be attached or placed in the Permit issued under Article VII,
above. Licensee shall not attach to the poles of the Licensor or place in
the conduit or trench systems of the Licensor, any Licensee communications
facilities not authorized to be attached or placed in a Permit issued under
Article VII. Licensee shall not modify,
-12-
<PAGE>
supplement, add to or rearrange any Licensee communications facilities
attached to the poles of the Licensor, or placed in the conduit of the
Licensor, without having first been issued a Permit by the Licensor under
Article VII.
B. Licensee shall, at its own expense, construct and maintain its
communications facilities on Licensor's poles and in Licensor's conduit
system in a safe condition and in a manner acceptable to Licensor, so as
not to conflict with the use of the Licensor's poles or conduit system by
Licensor or other authorized user's facilities attached thereon or placed
therein. Licensee shall include in its installation of facilities
appropriate permanent labels or other identification to all cables and
equipment placed on Licensor's poles and in Licensor's conduit system.
C. Licensor shall specify the point of attachment on each of Licensor's poles
to be occupied by Licensee's communications facilities. Where multiple
Licensee's attachments are involved, Licensor will attempt to the extent
practical, to designate the same relative position on each pole for each
Licensee's communications facilities.
D. Licensee shall provide written notification to Licensor and obtain specific
written authorization from Licensor before relocating or replacing its
communication facilities on Licensor's poles.
E. Licensee's communications facilities shall be placed in, maintained,
removed from, relocated or replaced in Licensor's conduit system only when
specified authorization for the work to be performed and approval of the
party to perform such work has been obtained in advance from Licensor.
Licensor retains the right to specify what, if any, work shall be performed
by Licensor at Licensee's expense.
F. In each instance where Licensee's communications facilities are to be
placed in Licensor's conduit system, Licensor shall designate the
particular duct the cable will occupy, the location where and manner in
which Licensee's cables will enter and exit Licensor's conduit system, the
racking of cables in the manhole and the specific location for any
associated equipment to be located in the conduit system, Licensor reserves
the right to include or limit the type, number and size of Licensee's
communications facilities which may be placed in Licensor's conduit system.
-13-
<PAGE>
G. Licensor's manholes shall be opened only at permitted by Licensor's
authorized employees or agents. Licensee shall be responsible for
obtaining any necessary permits from appropriate authorities to open
manholes and conduct work operations. Licensee's employees, agents or
contractors will be permitted to enter or work in Licensor's manholes only
when an authorized agent or employee of Licensor is present. Licensor's
said agent or employee shall have the authority to suspend Licensee's work
operations in and around Licensor's manholes if, in the sole discretion of
said agent or employee, any hazardous conditions arise or any unsafe
practices are being followed by Licensee's employees, agents or
contractors. Licensee agrees to pay Licensor the charges, as determined,
in accordance with the terms and conditions of Appendix 1, for having
Licensor's agent or employee present when Licensee's work is being done in
and around Licensor's manholes. The presence of Licensor's authorized
agent or employee shall not relieve Licensee of its responsibility to
conduct all of its work operations in and around Licensor's manholes in a
safe and workman like manner, in accordance with the terms of Article V.
H. Licensor may when it deems an emergency to exist, rearrange, transfer or
remove Licensee's communications facilities attached to Licensor's poles or
occupying Licensors conduit system without incurring any liability on the
part of the Licensor. As soon as practicable thereafter, Licensor will
endeavor to arrange for reacommodation of Licensee's communication
facilities so affected. Licensee agrees to pay Licensor for all expense
incurred by Licensor in connection with such rearrangement, transfer,
removal and reacommodation.
I. If necessary to accommodate the facilities of a subsequent Licensee,
Licensee shall, at Licensor's direction but at the expense of the
subsequent Licensee, rearrange its facilities on a pole, or transfer its
facilities to a replacement pole.
J. Licensee shall be liable for and shall pay for any rearrangements or
transfers of the facilities of the Licensor, a Joint Owner or Joint User, a
governmental entity or other Licensee which is required due to a violation
by Licensee of one or more of the requirements or specifications identified
in Section A of Article V.
K. Licensor may, but is not required to, transfer, or have transferred,
Licensee's facilities from poles on which such facilities are attached to
poles requiring replacement. Licensor shall have no liability to Licensee
for any such transfer. If the Licensor elects not to transfer Licensee's
facilities due to safety considerations,
-14-
<PAGE>
Licensor shall notify Licensee in writing and Licensee shall transfer such
facilities, at its sole costs and without any abatement of the Facility
Transfer Fee.
L. If Licensee shall fail to complete any rearrangement or transfer required
hereunder within 15 days after the date of written notice from Licensor
requesting such rearrangement or transfer, Licensor, or a Joint Owner or
Joint User, may perform or have performed such rearrangement or transfer
without liability on the part of Licensor or the Joint User or Joint- Owner
and Licensee agrees to pay the cost thereof.
M. Licensee, at is expense will remove its communications facilities from
Licensor's pole(s) or duct(s) within 30 days after
1 termination of the Permit covering such pole attachment or
conduit occupancy or
2. the date Licensee substitutes for communications facilities in
one duct with facilities in another duct or ducts.
If Licensee falls to remove its communications facilities within such
periods as specified preceding, Licensor shall have the right to remove
such facilities at Licensee's expense and without any liability on the part
of the Licensor.
Licensee shall advise Licensor in writing as to the date on which the
removal of its communications facilities from each Licensor pole and/or
portion of conduit system has been completed.
ARTICLE X
Termination of Licenses
A. Any Permit issued under this Agreement shall automatically terminate when
Licensee or Licensor ceases to have authority to construct and operate its
communications facilities on public or private property at the location of
the particular pole or duct covered by the Permit.
-15-
<PAGE>
B. Licensee may at any time surrender its Permit and remove its communications
facilities from a pole or portion of a conduit system by giving Licensor
written notice of such intention (Appendix III, Form E and F). Once
Licensee's communications have been removed they shall not again be
attached to such pole or be placed in the same portion of the conduit
system until Licensee has complied with all provisions of this Agreement as
though no previous Permit has been issued.
ARTICLE XI
Inspection of Licensee's Communications Facilities
A. Licensor reserves the right to make periodic inspections of any part of
Licensee's communications facilities and guying attached to Licensor's
poles or occupying Licensor's conduit system, and Licensee shall reimburse
Licensor for the expense of such inspections. Any charge imposed by
Licensor for such inspections shall be in addition to any other sums due to
payable by Licensee under this Agreement.
B. The frequency and extend to such inspections by Licensor will depend
primarily upon Licensee's performance in relation to the requirements of
Articles V, VII and IX herein.
C. Licensor will give Licensee advance written notice of such inspections,
except in those instances where, in the sole judgment of Licensor, safety
considerations justify the need for such an inspection without the delay of
waiting until a written notice has been forwarded to Licensee.
D. The making of periodic inspections or the failure to do so shall not
operate to relieve Licensee of any responsibility, obligation or liability
assumed under this Agreement.
ARTICLE XII
Unauthorized Attachment or Occupancy
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<PAGE>
A. If any of Licensee's communications facilities shall be found attached to
Licensor's poles or in Licensor's conduit system for which no Permit is
outstanding, Licensor, without prejudice to its other rights or remedies
under this Agreement (including termination) or otherwise, may Impose a
charge and require Licensee to submit in writing, within 15 days after the
date of written notification from Licensor or the unauthorized attachment
or occupancy, a pole attachment or Conduit occupancy Permit Application.
If such Application is not received by the Licensor within the specified
time period, Licensee shall remove its unauthorized attachment or occupancy
with 15 days of the final date for submitting the required Application, or
Licensor may remove Licensee's communications facilities without liability,
and the expense of such removal shall be borne by Licensee.
B. For the purpose of determining the applicable charge, absent satisfactory
evidence to the contrary, the unauthorized pole attachment or conduit
occupancy shall be treated as having existed for a period of two year(s)
prior to its discovery or for the period beginning with the date on which
Licensee was initially authorized to attach facilities of the same
communications system to poles or occupy the conduit system, whichever
period shall be the shorter; and the fees and charges as specified in
Appendix 1, shall be due and payable forthwith whether or not Licensee is
permitted to continue the pole attachment or conduit occupancy.
C. No act or failure to act by Licensor with regard to said unlicensed use
shall be deemed as a ratification or the licensing of the unlicensed use;
and if any Permit should be subsequently issued, said Permit shall not
operate retroactively or constitute a waiver by Licensor of any of its
rights of privileges under this Agreement or otherwise; provided, however,
that Licensee shall be subject to all liabilities, obligations and
responsibilities of this Agreement in regard to said unauthorized use from
its inception.
ARTICLE XIII
Licensor's Lien
Should Licensor under any applicable Article of this Agreement remove Licensee's
communications facilities from Licensor's poles or conduit system, Licensor will
deliver to Licensee the communications facilities so removed upon payment by
Licensee of the cost of removal, storage and delivery and all other amounts due
Licensor hereunder.
-17-
<PAGE>
In the event Licensor terminates this Agreement in accordance with Article XIX,
Subparagraph B, then Licensor is granted a lien on Licensee's communications
facilities occupying Licensor's conduit system or attached to Licensor's poles
or removed therefrom, with power of public or private sale, to cover any amounts
due Licensor under the provisions of this Agreement. Such liens shall not
operate to prevent Licensor from pursuing, at its option, any other remedy in
law, equity or otherwise including any other remedy provided for in this
Agreement.
ARTICLE XIV
Liability and Damages
A. Licensor reserves to itself, its successors and assigns, the right to
locate and maintain its poles and conduit system and to operate its
facilities in conjunction therewith in such a manner as will best enable it
to fulfill its own service requirements. Licensor shall not be liable to
Licensee for any interruption of Licensee's service or for interference
with the operation of Licensee's communications facilities, or for any
special, indirect, or consequential damages arising in any manner,
including Licensor's negligence, out of the use of Licensor's pole or
conduit systems or Licensor's actions or omissions in regard thereto and
Licensee shall indemnify and save harmless Licensor from and against any
and all claims, demands, causes of action, costs and attorneys fees of
whatever kind resulting therefrom.
Licensor shall exercise precaution to avoid damaging the communications
facilities of the Licensee; make an immediate report to the Licensee of the
occurrence of any such damage caused by Licensor's employees, agents or
contracts and agrees to reimburse the Licensee for all costs incurred by the
Licensee to repair such damaged facilities.
B. Licensee shall exercise precaution to avoid damaging the facilities of
Licensor and of others attached to Licensors pole or placed in Licensor's
conduit system, and Licensee assumes all responsibility for any and all
loss from such damage caused by Licensee's employees, agents or
contractors.
-18-
<PAGE>
Licensee shall make an immediate report to Licensor and any others attached to
Licensor's poles or conduit system occupant of the occurrence of any such damage
and agrees to reimburse the respective parties for all costs incurred in making
repairs.
C. Licensee shall indemnify, protect and save harmless Licensor from and
against any and all claims, demands, causes of action and costs (including
attorney fees) for damages to property and injury or death to persons,
including payments made under any Workman's Compensation Law or under any
plan for employee's disability and death benefits, which may arise out of
or be caused by the erection, maintenance, presence, use of removal of
Licensee's communications facilities or by their proximity to the
facilities of the parties attached to Licensors poles or placed in
Licensors conduit system, or by any act or omission of Licensee's
employees, agents or contractors on or in the vicinity of Licensor's poles
or conduit system.
D. Licensees shall indemnify, protect and save harmless Licensor from any and
all claims, demands, causes of action, costs (including attorney fees) of
whatever kind which arise directly or indirectly from the construction and
operation of Licensee's communications facilities, including taxes, special
charges by others, claims and demands for damages or loss for infringement
of copyright, for libel and slander, for unauthorized use to television
broadcast programs and other program material, and from and against all
claims and demands for infringement of patents with respect to the
manufacture, use and operation of Licensee's communications facilities in
combination with Licensor's poles, conduit system or otherwise.
E. In the event Licensor is named as a party in any legal or quasi legal
proceeding wherein Licensee's occupation of property is disputed or
challenged, Licensee agrees to reimburse Licensor its full cost of
participation therein including attorney's fees.
F. In those circumstances where a property owner demands that Licensor
relocate facilities located on property and such demand for relocation is
precipitated, in whole or in part, by the activities of the Licensee on the
owner's property or by the attachment of Licensee's communication
facilities to the Licensor's poles or placement of Licensee's communication
facilities in Licensee's conduit (or trench system), and Licensor, in
------------------
response to such demand, relocates such facilities to avoid the owners
property, Licensee shall pay the Licensor's costs of such relocation.
-19-
<PAGE>
ARTICLE XV
Insurance
A Licensee shall carry insurance (including contractual liability coverage)
issued by an insurance carrier satisfactory to Licensor to protect the
parties hereto from and against any and all claims, demands, causes of
actions, judgments, cost (including attorneys fees), expenses and
liabilities of every kind and nature which may arise or covered in Article
XIV preceding.
B. The amounts of such insurance:
1 against liability due to damage to property shall be not less
than *** as to any one occurrence and *** aggregate, and
2. against liability due to injury to or death of persons shall not
be not less than *** as to any one person and ***, aggregate.
C. Licensee shall also carry such insurance as will protect it from all claims
under any Workman's Compensation Law in effect that may be applicable to
it.
D. Licensee shall submit to Licensor certificates by each company insuring
Licensee to the effect that it has insured Licensee for all Liabilities of
Licensee covered by the Agreement and that it will not cancel or change any
such policy of insurance Licensee except after 60 days' written notice to
Licensor.
E. All insurance must be effective before Licensor will authorize Licensee to
attach its communications facilities in Licensor's conduit system and shall
remain in force until such communications facilities have been removed from
all such poles and/or conduit systems.
ARTICLE XVI
Authorization not Exclusive
_______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-20-
<PAGE>
Nothing herein contained shall be construed as a grant of any exclusive
authorization, right or privilege to Licensee. Licensor shall have the right to
grant, renew and extend rights and privileges to others not parties to this
Agreement, by contract or otherwise, to use any pole or conduit system covered
by this Agreement.
ARTICLE XVII
Assignment of Rights
A. Licensee shall not assign or transfer this Agreement or any authorization
granted hereunder, and this Agreement shall not inure to the benefit of
Licensee's successors, without the prior written consent of Licensor.
B. In the event such consent or consents are granted by Licensor, then this
Agreement shall extend to and bind the successors and assigns of the
parties hereto.
ARTICLE VIII
Failure to Enforce
Failure of Licensor to enforce or insist upon compliance-with any of the terms
or conditions of this Agreement or to give notice or declare this Agreement or
any authorization granted hereunder terminated shall not constitute a general
waiver or relinquishment of any term or condition of this Agreement, but the
same shall be and remain at all times in full force and effect.
ARTICLE XIX
Termination of Agreement
A. Subject to provisions of Article XVII, hereof, should Licensee cease to
provide its communications services in the area(s) covered by this
Agreement, then all of Licensee's rights, privileges and authorizations
under this Agreement, including all
-21-
<PAGE>
Permits issued hereunder, shall automatically terminate as of the date
following the final day that such communications services are provided.
B. If Licensee shall fail to comply with any of the terms or conditions of
this Agreement or default in any of its obligations under this Agreement
and shall fail within thirty (30) days after the date of written notice
from Licensor to correct such default or noncompliance, Licensor may at its
option, forthwith terminate this Agreement and all authorizations granted
hereunder, or the authorizations covering the poles or conduit system as to
which such default or noncompliance shall have occurred.
C. Licensor shall have the right to forthwith terminate this entire Agreement,
or any Permit issued hereunder, without prior notice to Licensee:
1 If Licensee's communications facilities are used or maintained in
violation of any law or in aid of any unlawful act or
undertaking; or
2. If Licensee defaults under Article V of this Agreement; or
3. If Licensee attaches to any of Licensor's poles or occupies
Licensor's conduit system without having first been issued a
Permit therefore.
D. If the insurance carrier shall at any time notify Licensor that the policy
or policies of insurance, required under Article XV hereof, will be
canceled or changed so that the requirements of Article XV will no longer
be satisfied, then this Agreement terminates upon the effective date of
such cancellation or change.
E. In the event of termination of this Agreement or any of Licensee's rights,
privileges or authorizations hereunder, Licensee shall remove its
communications facilities from Licensor's poles and conduit system within
six months from the date of termination; provided, however, that Licensee
shall be liable for and pay all fees and charges pursuant to terms of this
Agreement to Licensor until Licensee's communications facilities are
actually removed from Licensor's poles and conduit system.
F. If Licensee does not remove its communications facilities from Licensor's
poles and conduit system within the applicable time periods specified in
this Agreement,
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<PAGE>
Licensor shall have the right to remove them at the expense of Licensee and
without any liability on the part of Licensor to Licensee therefore.
ARTICLE XX
Term of Agreement
A. Unless sooner terminated as herein provided, this Agreement shall continue
in effect for a term of *** from the date hereof, and thereafter until
either party hereto terminates this Agreement by giving the other party at
least six months prior written notice thereof. Such six month's of
termination may be given to take effect at the end of the original ***
period or thereafter.
B. Termination of this Agreement or any Permits issued hereunder shall not
affect Licensee's liabilities andobligations incurred hereunder prior to
the effective date of such termination.
ARTICLE XXI
Notices
All written notices required under this Agreement shall be given by posting the
same in certified first class mail, return receipt requested or overnight
carrier, with all fees prepaid, to Licensee as follows:
Glenn W. Milligan, President & CEO
21st Century Cable TV, Inc.
455 N. Cityfront Plaza Drive, #2950
Chicago, IL 60611
and to Licensor as follows:
Ameritech - Illinois
ATTN: Structure Leasing Coordinator
_____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
54 Mill Street
Box 32
Pontiac, MI 48342
or to such address as the parties hereto may from time to time specify.
ARTICLE XXII
Supersedure of Previous Agreement(s)
This Agreement supersedes all previous agreements, whether written or oral,
between Licensee and Licensor for placement and maintenance of Licensee's
communications facilities on Licensor's poles and in Licensor's conduit system
within the geographical area covered by this Agreement; and there are no other
provisions, terms, conditions to this Agreement except as expressed herein. All
currently effective Permits heretofore granted to Licensee pursuant to such
previous agreements shall be subject to the terms and conditions of this
Agreement.
In Witness Whereof, the parties hereto have executed this Agreement in duplicate
on the day and year first above written.
Witness (Attest) Illinois Bell Telephone Company a.k.a.
Ameritech - Illinois
_________________________ By: ___________________________
Secretary
Title: ________________________
21st Century Cable TV, Inc.
-------------------------------
Company Name
Witness (Attest) By: ___________________________
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<PAGE>
______________________ Title: ________________________
Secretary President & CEO
-25-
<PAGE>
APPENDIX I
Schedule of Fees and Charges
This Appendix I, effective as of _____________, is an integral part of the
Structure License Agreement between AMERITECH (Licensor) and 21st Century Cable
TV, Inc. dated _____________ and contains the fees and charges governing the use
of Licensor's poles and conduit system by Licensee's communications facilities.
POLE ATTACHMENTS AND CONDUIT OCCUPANCY
A. ATTACHMENT AND OCCUPANCY FEES
1. General
a. Attachment and occupancy fees commence on the day the Permit is
issued. Such fees cease as of the final day of the semi-annual
billing period in which the removal of the communications
facilities is completed by the Licensee or by the Licensor.
b. Fees shall be payable semi-annually in advance on the first day
of January and July, without proration.
c. For the purpose of computing the total attachment and conduit
occupancy fees due hereunder, the total fee shall be based upon
the number of poles and duct feet of conduit for which Permits
have been issued before the first day of June and the first day
of December each year. The first advance payment of the semi-
annual fee for Permits issued under this Agreement shall include
a proration from the first day of the month following the date
the Permit was issued to the first regular semi-annual payment
date.
d. Attachment or occupancy fees for initial issuance of a Permit for
attachment or occupancy are due at the time of Permit issuance
for the semi-annual billing period in which the Permit is issued.
The attachment or occupancy fees for initial issuance of a Permit
made in December or June shall also include prepayment for the
subsequent semi-annual billing period.
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<PAGE>
APPENDIX I
SCHEDULE OF FEES AND CHARGES
2. Fees
Pole Attachments Yearly Annual Fee
---------------- -----------------
(a) Suspension strand, each, per pole = *** ***
(b) Drive hook, drops, power supplies or guy strand,
per pole =
(See note below)
Note: Fee applies only where such hardware is the sole attachment to a pole
or bracket.
Facility Transfer Fee ***
---------------------
The Facility transfer fee shall be calculated annually
and shall be the product of ***% (the percentage of
poles Ameritech replaces annually is ***%)
of the total poles multiplied by $*** to which
Licensee is attached as of December 31 of the previous year.
Conduit Occupancy
-----------------
(a) Per foot of duct occupied by *** (within Chicago City Limits)
Licensee's communications *** (outside Chicago City Limits)
facilities
(b) For the purpose of computing the
total fee due hereunder, the length
of duct considered occupied shall
be measured from the center to
_____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-27-
<PAGE>
center of manholes, or from the
center of a manhole to the end of
Licensor's duct occupied by
Licensee's communications
facilities.
-28-
<PAGE>
APPENDIX I
SCHEDULE OF FEES AND CHARGES
B. Charges
1. Computation
All charges for field survey, make-ready work, inspections, removal of
Licensee's facilities from Licensor's poles and conduit system and
other work performed for Licensee shall be based upon the full cost
and expense to Licensor of such work or for having such work performed
by an authorized representative of the Licensor.
2. Pole Replacements
The charge for replacement of a pole required to accommodate
Licensee's attachment, in accordance with Article VIII, a, 3, shall be
based on Licensor's fully installed costs less salvage value, if any.
In such cases, Licensee shall have the option, where possible and
acceptable to any Joint User or owner to become the owner of the
replacement pole in accordance with Article VIII, a, 8.
C. Payment Date
Failure to pay all fees and charges within 30 days after presentment of the
bill therefore or on the specified payment date, whichever is later, shall
constitute a default of this Agreement and shall result in the imposition
of a late charge of 1 1/2% per month or part thereof, of the unpaid
balance.
Illinois Bell Telephone Company a.k.a.
Ameritech - Illinois
By: _____________________________
Title: __________________________
By: _____________________________
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<PAGE>
Title: __________________________
President & CEO
Appendix II
Multiple Pole Attachment Permit Applications
This Appendix, effective as of ___________ is an integral part of the Structure
License Agreement between AMERITECH Company (Licensor), and 21st Century Cable
TV, Inc. (Licensee), dated __________________ and contains the procedure for
processing multiple Pole Attachment Permit Applications governing the use of
Licensor's poles.
PROCEDURE FOR PROCESSING
MULTIPLE POLE ATTACHMENT PERMIT APPLICATIONS
The following procedure shall be adhered to in processing Applications to attach
to Licensor's poles by multiple Licensees.
A. Definitions
Simultaneous Permit Applications
--------------------------------
Properly completed Pole Permit Applications relative to the same pole which
are -received by the Licensor from multiple applicants on the same business
day.
Non-Simultaneous Permit Applications
------------------------------------
Properly completed Pole Permit Applications relative to the same pole which
are received by the Licensor from multiple applicants on different business
days.
Initial applicant
-----------------
The applicant filing the first properly completed Permit Applications
(nonsimultaneous) for attachment to a specific pole.
Additional applicant
--------------------
Each applicant filing a properly completed Permit Application (non-
simultaneous) for attachment to a specific pole for which a prior Permit
Application has been received by the Licensor.
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<PAGE>
Make-Ready Work
---------------
The work required (including field survey, rearrangement and/or transfer of
existing facilities on a pole, replacement of a pole or any other changes)
in connection with the accommodation of the Licensee's communications
facilities on Licensor's pole.
Option 1
--------
An arrangement whereby Licensor will process the Permit Application of
initial applicant as if there is no other Permit Application on file for
the same pole.
Option 2
--------
An arrangement whereby Licensor will process Permit Applications of initial
and additional applicant in accordance with the procedure applicable for
simultaneous multiple Permit Applications.
B. MULTIPLE PERMIT APPLICATIONS PROCESSING
---------------------------------------
Both simultaneous and non-simultaneous multiple Permit Applications for the same
pole will be processed by the Licensor in accordance with the procedures set
forth in the flow chart which comprises pages 4 to 6 inclusive, of this
Appendix.
C. OPTION ARRANGEMENTS
-------------------
1. Upon being offered Options 1 and 2, the initial applicant will be
advised that he may make an immediate selection of the option desired
or may delay selection until the required make-ready survey work has
been completed and the estimate or make-ready charges are quoted by
the Licensor. An initial applicant electing to delay its decision,
shall indicate the option desired within 15 days after the Licensor
has quoted the estimate of the make-ready charges that will apply,
otherwise, the Licensor will deem the initial applicant to have
selected Option 1.
2. The Permit Application processing procedure to be adhered to in
accordance with Option 2 will be subject to acceptance by all of the
multiple applicants involved. The additional applicant(s) will have
15 days from the date of notification by the Licensor that the initial
applicant has selected Option 2 to accept or reject the conditions
applicable under Option
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<PAGE>
2, otherwise, the Licensor will deem the additional applicant(s) to
have rejected such conditions.
3. All work in progress on the initial applicant's Permit Application
involving multiple pole attachments will be suspended by the Licensor
from the time that the initial applicant is offered Options 1 and 2
until the Licensor receives notification of the initial applicant
option selection in accordance with C.1. above.
D. MAKE-READY SURVEY REQUIREMENT
1. Where required make-ready survey is to be completed on two bases, the
multiple applicants shall be so advised before such survey is
Commenced.
2. The make-ready survey required to develop the estimated charges
applicable for Options 1 and 2 will include a determination of the
work requirements necessary to:
a. issue Permits simultaneously to the multiple applicants and,
b. issue a Permit to the initial applicant before commencing the
required make-ready work necessary to accommodate the additional
applicant(s).
3. Licensor will consider any Permit Application involving simultaneous
multiple attachments as canceled upon the failure of an applicant to notify
the Licensor in writing of his acceptance of the estimate of make-ready
charges and accompany such acceptance with the advance payment within 30
days of receipt of such estimate from the Licensor.
4. Licensor or Licensor's authorized representative will perform the
make-ready survey in all situations involving simultaneous Permit
Applications.
5. Where an initial applicant has been authorized by Licensor to perform
its own make-ready survey, and properly completed pole Applications
are received from an additional applicant(s), establishing a non-
simultaneous Permit Application situation, the conditions of Option 1
will automatically apply and
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<PAGE>
the option arrangements, detailed in Section C of this Appendix, will
not be applicable.
E. MAKE-READY WORK SCHEDULE
Any simultaneous multiple applicant who does not agree with the alternative
arrangement that provides for the Licensor to complete ALL make-ready work
before simultaneously granting Permits to all multiple applicants will be
deemed by the Licensor to have canceled his Application.
F. CHANGES IN APPENDIX
This Appendix may be changed in whole or in part at any time during the
term of this Agreement at the sole option of the Licensor upon the giving
of not less than 30 days written notice thereof of the Licensee(s) and to
substitute in place thereof such other provisions as the Licensor may deem
necessary as relative to multiple attachments to poles of the Licensor.
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<PAGE>
PROCEDURE FOR PROCESSING
MULTIPLE POLE ATTACHMENT PERMIT APPLICATIONS
WHERE NO MAKE-READY
SURVEY EXPENSE HAS
BEEN INCURRED BY
LICENSOR
<TABLE>
<CAPTION>
Make-Ready Survey Make-Ready Survey Make-Ready Work Make-Ready Cost
Requirement Cost Allocation Schedule Cost Allocation
<S> <C> <C> <C> <C>
To be done on two Multiple applicants must
bases to determine develop mutually agreeable
accommodation
requirements for: Total cost to be 1. order of pole Total cost shared
A Simultaneous 1. attachment by shared equally availability and equally by multiple
Applications single licensee by multiple 2. overall completion applicants
2. attachment by applicants. schedule - If only one
multiple - where multiple applicants applicant agrees to
licensees within 15 days from estimated shared
(a) simultaneously receipt of estimate from portion of total
(b) non- Licensor, Licensor, will cost that applicant
simultaneously offer as an alternative, to will be quoted the
complete all make-ready cost applicable to
work involved before accommodate a single
simultaneously granting licensee. (see 1, under
permits to multiple Make-Ready Survey
applicants. Requirement)
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
B. Non-Simultaneous
Applications
Options Available Initial Applicant Initial Applicant
to Initial Applicant Licensor will treat as Is charged the cost
non-multiple applicant. attributable to the
Option 1 - any change of priority of pole work involved to
availability or overall accommodate
(Licensor will process completion schedule that is attachment by one
as if no multiple To be done on two bases desired after either has been licensee.
permit applications to determine initially agreed upon with the
exist) accommodation Licensor is subject to
requirements for: Licensor's ability to
1. attachment by single accommodate in its
licensee established work schedule.
2. attachment by Total cost to be
multiple licensees shared equally by Additional Applicant Additional Applicant
(a) simultaneously multiple applicants Required make-ready work will Is charged the cost
(b) non-simultaneously not be performed until permits attributable to the
have been granted to initial work involved to
applicant unless the accommodate
performance of such work will attachment by an
not delay the completion of the additional licensee
make-ready work required to on a pole attached
accommodate the initial by initial licensee.
applicant.
</TABLE>
PROCEDURE FOR PROCESSING
MULTIPLE POLE ATTACHMENT PERMIT APPLICATIONS
WHERE PARTIAL MAKE-READY
SURVEY EXPENSE HAS
BEEN INCURRED BY
LICENSOR
<TABLE>
<CAPTION>
Make-Ready Survey Make-Ready Survey Make-Ready Work Make-Ready Cost
Requirement Cost Allocation Schedule Cost Allocation
<S> <C> <C> <C>
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Options Available to
Initial Applicant Balance of required survey to be Initial Applicant
Option 1 completed on two
bases to determine Will be charged the cost
accommodate requirements incurred for that portion
(Licensor will process for: of the survey which has
as if no multiple already been completed. SAME AS 1 B. SAME AS 1 B.
permit applications 1. attachment by single Additional Applicant
exist) licensee
2. attachment by multiple Will be charged the cost
licensees incurred to resurvey the
(a) simultaneously completed portion of the
(b) non-simultaneously survey to determine the
requirements to
Portion of survey already accommodate attachment by
completed for initial multiple licensees.
application will be
resurveyed to determine the Total cost of the balance
requirements to of the required survey
accommodate an additional will be shared equally by
licensee. the multiple applicants.
</TABLE>
PROCEDURE FOR PROCESSING
MULTIPLE POLE ATTACHMENT PERMIT APPLICATIONS
WHERE PARTIAL MAKE-READY
SURVEY EXPENSE HAS
BEEN INCURRED BY
LICENSOR
<TABLE>
<CAPTION>
Make-Ready Survey Make-Ready Survey Make-Ready Work Make-Ready Cost
Requirement Cost Allocation Schedule Cost Allocation
<S> <C> <C> <C> <C>
Option 2
(Licensor will process
as simultaneous
permit applications) SAME AS 1 A. SAME AS 1 A.
</TABLE>
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<PAGE>
PROCEDURE FOR PROCESSING
MULTIPLE POLE ATTACHMENT PERMIT APPLICATIONS
WHERE MAKE-READY
SURVEY IS COMPLETE
BUT MAKE-READY WORK
<TABLE>
<CAPTION>
Make-Ready Survey Make-Ready Survey Make-Ready Work Make-Ready Cost
Requirement Cost Allocation Schedule Cost Allocation
<S> <C> <C> <C> <C>
Options Available to
Initial Applicant
Will be charged the cost
Option 1 Resurvey required to of the survey which has SAME AS 1. B. SAME AS 1. B.
determine accommodate already been completed.
(Licensor will process requirements for
as if attachment by Additional Applicant
no multiple multiple licensees.
permit
applications 1. simultaneously Will be charged the cost
exist) to resurvey to determine
2. non-simultaneously the requirements for
accommodations multiple
licensees.
Option 2
(Licensor will process SAME AS 1. A. SAME AS 1. A.
as simultaneous permit
applications)
</TABLE>
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<PAGE>
ADMINISTRATIVE FORMS AND NOTICES
This Appendix, effective as of ______________, is an integral part of the
Structure License Agreement between AMERITECH Company (Licensor) and 21st
Century Cable TV, Inc. (Licensee), dated ______________ and contains the
administrative forms governing the use of Licensor's poles and conduit system by
Licensee's communications facilities.
INDEX OF ADMINISTRATIVE FORMS
<TABLE>
<S> <C>
Authorization for Field Survey/Make-Ready Work A-1
Application and Duct Occupancy Permit C-1
Application for Conduit Route Planning Services C-1A
Cost Request/Duct Permit Application Data Sheet C-2
Notification of Surrender or Modification of Duct Occupancy
Permit by Licensee C-3
Application and Pole Attachment Permit P-1
Pole Data Sheet P-2
Notification of Surrender or Modification of Pole Attachment
Permit by Licensee P-3
</TABLE>
-38-
<PAGE>
Appendix III
Form A-1
AUTHORIZATION FOR FIELD SURVEY/MAKE READY WORK
(LICENSEE)
The necessary work associated with your Application and Conduit
-----------------------
Occupancy Permit. Application and Pole Attachment Permit or Application for
- ---------------- -------------------------------------- ---------------
Conduit Alternate Route Selection Services. number ____________ in the
- ------------------------------------------
municipality of for the placement of communication facilities in Ameritech owned
conduit or on Ameritech owned poles has been completed. The results of the
record check as well as any necessary Field Survey and Make Ready work and
associated estimated charges are indicated on the attached Cost Request/Conduit
--------------------
Permit Application Data Sheet or Cost Request/Pole Permit Application Data Sheet
- ----------------------------- -----------------------------------------------
and map(s).
Following is a summary of the estimated charges which will apply.
---------
Field Survey Make Ready
Hours Cost Hours Cost
----------- ---- --------- ----
Engineering
Construction
Material
Contractor
Total
All charges for Field Survey and/or Make Ready work associated with your
application shall be based on the actual full cost and expense. including
overhead. to the Licensor for performing such work. If the actual Charges
exceed the amount of your deposit, a bill for the difference will be issued,
unless prior alternate billing methods have been negotiated.
Licensor must Inform Licensee of the desired method to proceed below within 30
days of this notification
AMERITECH - IL IN MI OH WI (circle one)
By: ___________________________ ______________________________
(Signed) (Telephone number)
(Title) (Date)
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<PAGE>
Based on information provided to me on these forms. please proceed as
indicated:
Licensee requests the Licensor to complete the indicated Field Survey work
required.
Licensee requests the Licensor to complete the indicated Make Ready work
required.
Licensee requests the Licensor to complete both the indicated Field Survey
and Make Ready work concurrently.
Licensee requests the Licensor to perform additional Route Record Checks as
indicated an the attached revised stick maps or drawings and Cost
----
Request/Conduit Permit Application Data Sheet (form C2). Included is an
- -------------------------------------------------------
additional deposit of *** per *** feet increment unless other prior alternate
negotiated billing methods have been arranged. Also included are any other
application or processing fees as outlined in Appendix I of the General
Agreement
Licensee requests the Licensor to perform Planning Record Check Services as
indicated on the attached revised stick maps or drawings and Cost
----
Request/Conduit Permit Application Data Sheet (form C2). Included is an
- -------------------------------------------------------
additional deposit of *** per *** feet increment or fraction thereof unless
other prior alternate negotiated billing methods have been arranged. Also
included are any other application or processing fees as outlined in Appendix I
of the General Agreement.
Licensee requests no additional work be done at this time and understands
that the information and estimated charges provided remains in effect for only
30 days.
The required Field Survey and/or Make Ready work to be incurred by the Licensor
associated with my Application And Conduit Occupancy Permit or Application And
---------------------------------------- ---------------
Pole Attachment Permit, number ___________ is authorized for the charges as
- ----------------------
summarized above. If the actual charges exceed the estimated amount. payment to
the Licensor will be made in accordance with the terms described above.
LICENSEE.
By: __________________________ _______________________
(Signed) (Telephone number)
______________________________ _______________________
(Title) (Date)
Top portion to be completed by Licensor. Bottom portion to be completed by
Licensee.
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-40-
<PAGE>
APPENDIX III
Form C-1
Application and Conduit Occupancy Permit
To Ameritech - IL IN Ml OH WI (Circle one) Customer application
(Street address)
(City, State & Zip)
In accordance with the terms and conditions of the Structure License Agreement
between us dated ___________19__, application is hereby made for a Permit to
occupy feet of conduit for communications facilities as indicated on the
attached stick map and conduit data sheet in the municipality of __________
Licensee has indicated on the attached data sheet the number and type of
communication cables, outside diameters and any locations where it wishes to
enter and exit manholes and/or place splices or fiber maintenance loops in
Licensor's manholes.
Enclosed is a deposit of *** per *** increment or fraction thereof in the total
sum of $_________for Ameritech to provide a stick map and data sheet detailing
the locations of manholes, center to center measurements and conduit
availability associated with this application based on a record check (no field
visit), unless Alternate Route Selection Services apply or other alternative
billing methods have been negotiated, plus any other application or processing
fees as outlined in Appendix of the Structure License Agreement. Licensee also
understands that there is a *** Structure License Agreement processing fee if an
initial issuance or a modification of a Structure License Agreement is required
prior to the execution of this conduit occupancy Permit by the Licensor.
By:
(Name of Licensee) (Signed)
(Billing address) (Printed)
(City, State & Zip code) (Title)
(Telephone Number) (Date)
__________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-41-
<PAGE>
Make Ready work has been completed. Conduit occupancy Permit Number is hereby
granted to place communication facilities described in this application.
Ameritech - IL IN Ml OH WI Inventory of conduit occupied per this Permit
(Circle one) by Licensee:
By:. Conduit occupied this Permit
(Signed)
(Title) Previous count per last executed Permit
Number
(Telephone number) Total conduit footage occupied
(Date)
Top portion to be filled in by Licensee. Bottom to be ruled in by Licensor.
-42-
<PAGE>
APPENDIX III
Form C-lA
APPLICATION FOR CONDUIT ALTERNATE ROUTE SELECTION SERVICES
To Ameritech - IL IN Ml OH WI (circle one) Customer Application #____________
(Street Address)
(City, State & Zip)
Application is hereby made for Conduit Alternate Route Selection Services of
approximately _______________ feet of conduit for communications facilities as
indicated on the attached map and data sheet specifying the desired start and
termination points. The Licensee has indicated on the attached map and data
sheet the number and type of communication cables, outside diameters and any
locations where it desires to enter or exit the conduit system.
Enclosed is a deposit of *** per *** feet increment of conduit or fraction
thereof in the sum of $ for the Licensor to provide Conduit Alternate Route
-
Selection Services to check the Licensor's records (No field survey) to
identify a primary route and up to two alternative routes (if available). The
Licensor will provide a stick map and data sheet by municipality indicating
manhole locations, center to center measurements, duct availability, manhole
entrance or exit availability and manhole congestion associated with this
application. Where conduit is not available, the Licensee may suggest buried or
aerial facility alternatives. The Licensee will not be under any obligation to
construct conduit facilities if none are available.
By:
(Name of Licensee) (Signed)
(Billing Address) (Printed)
(City, State & Zip Code) (Title)
(Telephone Number) (Date)
______________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-43-
<PAGE>
Attached are stick maps by municipality or governing entity prepared by the
Licensor suggesting a conduit route based on the information originally provided
by the Licensee. Also attached are Cost Request/Conduit Permit Application Data
Sheets (Form C2) indicating availability within the route and cost estimates for
the necessary Field Survey and Make Ready work required based on the Licenser's
record check. Indicated below is how the Licensee desires the Licensor to
proceed:
( ) Licensee has attached an Application and Conduit Occupancy Permit by
municipality or governing entity for the route selected and the corresponding
stick map. Licensee has also attached an executed Authorization For Field
Survey/Make Ready Work form.
( ) Licensee requests the Licensor to perform additional Conduit Alternate Route
Selection Services as indicated on the attached new maps and Cost
Request/Conduit Permit Application data Sheets (Form C2). Enclosed is an
additional deposit of *** per *** feet increment or fraction thereof.
( ) Licensee requests no additional work be done at this time and understands
that the information and estimated charges provided remain in effect for only 30
days.
LICENSEE:
By: Date:
________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-44-
<PAGE>
COST REQUEST/CONDUIT PERMIT APPLICATION DATA SHEET
[CHART]
-45-
<PAGE>
COST REQUEST/CONDUIT PERMIT APPLICATION DATA SHEET
[CHART]
-46-
<PAGE>
COST REQUEST/CONDUIT PERMIT APPLICATION DATA SHEET
[CHART]
-47-
<PAGE>
EXPLANATION OF COST REQUEST/CONDUIT PERMIT APPLICATION DATA
SHEET
(FORM C2)
(ONE DATA SHEET REQUIRED PER MUNICIPALITY)
IN ITEM ENTITLED... INFORMATION PROVIDED BY
Al CUSTOMER NAME AND ADDRESS Third Party
A2 CUSTOMER APPLICATION NUMBER Third Party or Ameritech
Structure Leasing Coordinator
(ASLC)
A3 MUNICIPALITY Third Party
A4 NUMBER OF CABLES AND TYPE Third Party
A5 OUTSIDE DIAMETER OF CABLE Third Party
A6 SHEET 1 OF Third Party or IIP
A7 INITIATIVE CODE Third Party or ASLC, if required
Bl REQUEST TRACKING NUMBER Third Party or lip
B2 A/W UNDERTAKING NUMBER IIP or Design Engineering
B3 PLANNING ENGINEER IIP
B4 TELEPHONE NUMBER IIP
B5 RESPONSIBILITY CODE IIP
B6 DESIGN ENGINEER IIP, if known, or Design
Engineering
B7 TELEPHONE NUMBER IIP, if known, or Design
Engineering
-48-
<PAGE>
B8. RESPONSIBILITY CODE IIP, if known, or Design
Engineering
B9 CONSTRUCTION FOREMAN IIP or Design Engineering, if
known, or Construction
B10 TELEPHONE NUMBER IIP or Design Engineering, if
known, or Construction
B11 RESPONSIBILITY CODE IIP or Design Engineering, if
known, or Construction
B12 MARKETING REPRESENTATIVE IIP or Design Engineering, if
known, or ASLC
B13 TELEPHONE NUMBER IIP or Design Engineering, if
known, or ASLC
C1 FIELD SURVEY ENGINEERING IIP. Verification and update, if
HOURS necessary, by Design Engineering
C2 FIELD SURVEY ENGINEERING COST IIP. Verification and update, if
necessary by Design Engineering.
Rates provided by ASLC
C3 FIELD SURVEY CONSTRUCTION IIP. Verification and update, if
HOURS necessary, by Design Engineering
or Construction
C4 FIELD SURVEY CONSTRUCTION IIP. Verification and update, if
COST necessary by Design Engineering.
Rates provided by ASLC.
C5 TOTAL ESTIMATED FIELD SURVEY IIP by adding items C2 and
COST C4 and entering. Verification
and update, if necessary, by
-49-
<PAGE>
Design Engineering
C6 ESTIMATED START DATE IIP. Verification and update, if
necessary, by Design
Engineering or Construction
C7 ESTIMATED COMPLETION DATE IIP. Verification and update, if
necessary, by Design
Engineering or Construction
C8 MAKE - READY ENGINEERING IIP. Verification and update, if
HOURS necessary, by Design
Engineering
C9 MAKE - READY ENGINEERING IIP. Verification and update if
COST necessary, by Design
Engineering.Rates.provided by
ASLC.
C10 MAKE - READY CONSTRUCTION IIP. Verification and update, if
HOURS necessary, by Design Engineering
or Construction
C11 MAKE - READY CONSTRUCTION IIP. Verification and update, if
COST necessary, by Design
Engineering. Rates provided by
ASLC.
C12 MAKE - READY MATERIAL COST IIP. Verification and update, if
necessary, by Design Engineering
C13 CONTRACTOR COSTS IIP. Verification and update, if
necessary, by Design
Engineering or Construction
C14 TOTAL ESTIMATED MAKE - READY IIP by adding items C9, C11,
COST Cl 2 and C13 and entering.
Verification and update, if
-50-
<PAGE>
necessary, by Design
Engineering
C15 ESTIMATED START DATE IIP. Verification and update, if
necessary, by Design
Engineering or Construction
C16 ESTIMATED COMPLETION DATE IIP. Verification and update, if
necessary, by Design
Engineering or Construction
D 1 LICENSE NUMBER ASLC
D2 TOTAL DUCT FEET AVAILABLE IIP. Verification and update, if
TO LEASE THIS PERMIT necessary, by Design Engineering
NOTE: Subtract any unavailable section conduit footage from column D4 before
filling in item D2.
D3 SECTION BEGINNING IIP. Verification and update, if
MH/POLE/BLDG necessary, by Design
Engineering
D4 C.C. MEASUREMENT IIP. Verification and update, if
necessary, by Design
Engineering. This is the wall to
wall measurement on records
plus 1/2 beginning manhole
length on records and 1/2
ending manhole length on
records
D5 SECTION ENDING IIP. Verification and update, if
MH/POLE/BLDG # necessary, by Design
Engineering
D6 AVAILABLE DUCT IIP. Yes or NO answer.
Verification and update, if
necessary, by Design
-51-
<PAGE>
Engineering or Construction
D7 AVAILABLE INNERDUCT IIP. Yes or No answer. If No,
provide estimated material and
cost of placing maximum
interducts in D13 and D14.
Verification and update, if
necessary, by Design
Engineering or Construction
D8 FIELD SURVEY REQUIRED IIP. Yes or No answer.
Verification and update, if
necessary, by Design
Engineering
D9 KNOCKOUT IIP. Yes or No answer if
entrance or exit from MH is
requested by Third Party.
Verification and update, if
necessary, by Design
Engineering or Construction
D10 LATERAL DUCT IIP. Yes or No answer if
entrance or exit from MH is
requested by Third Party.
Verification and update, if
necessary, by Design
D11 CONGESTED MH IIP. Yes or No answer if splices
or maintenance loops in MH
are requested by Third Party.
Verification and update, if
necessary, by Design
Engineering or Construction
D12 TERMINATION SPACE IIP. Yes or No answer if
entrance or exit from MH is
requested by Third Party and
-52-
<PAGE>
no knockouts or laterals are
available. Verification
and update, if necessary, by
Design Engineering or
Construction
D13 FIELD SURVEY WORK REQUIRED, IIP or Design Engineering.
MAKE READY WORK REQUIRED, Provide detailed explanations
AND MATERIAL REQUIRED of any specific work or
materials required
found during Record Check or
Field Survey for each NO*
answer in D6-DI2. Also, provide
any additional information
needed at Field Survey or Make
Ready.
D14 ESTIMATED COST IIP. Estimated cost to provide
labor or material for item D13,
if required. Verification and
update, if necessary, by
Design Engineering
D15 CONSTRUCTION COMMENTS Construction. Provide
comments as the result of
Field Survey or Make
Ready work. Examples include:
Size of available
conduit/innerduct,
blockages, duct assignments,
location in MH for terminations
-53-
<PAGE>
Appendix III
Form C-3
NOTIFICATION OF SURRENDER OR MODIFICATION OF
CONDUIT OCCUPANCY PERMIT BY LICENSEE
To Ameritech - IL IN Ml OH WI (Circle one)
(Street Address)
(City, State & Zip Code)
In accordance with the terms and conditions of the Structure License Agreement
between us dated __________ 19_, notice is hereby given that the Permit
covering occupancy of the following conduit in the municipality or governing
entity of is surrendered or modified as indicated.
Permit Number Dated ____________,19___
Conduit Location Facilities Date Facilities Removed
- ---------------- ---------- -----------------------
By
(Name of Licensee) (Signed)
(Billing Address) (Printed)
(City, State & Zip Code) (Title)
(Telephone Number) (Date)
-54-
<PAGE>
To be completed by Licensor
Date Notice Received _ ____Total Duct Feet Discontinued
By ____________________ New Total Duct Feet Occupied
-55-
<PAGE>
EXHIBIT 10.7
THE APPAREL CENTER
THIS LEASE made as of January 31, 1997 between LASALLE NATIONAL BANK, not
individually but as Trustee under a Trust Agreement dated March 1, 1967, as
extended, and known as Trust No. 36223 ("Landlord") and 21ST CENTURY CABLE TV,
INC., an Illinois corporation ("Tenant").
WITNESSETH
1. DEMISED PREMISES; TERM.
(A) Landlord does hereby demise and lease to Tenant, and Tenant accepts
that certain space shown hatched on Exhibit "A" which is attached hereto and
made a part hereof, consisting of approximately 32,422 rentable square feet and
commonly described as a portion of the sixth floor ("Premises") of The Apparel
Center, a building located on land at 350 North Orleans Street ("Building")
(provided, however, the Building does not include the hotel premises [herein
"Hotel Premises",] located in the same physical structure as the Building)
constructed on the north portion of the property bounded by West Kinzie Street,
North Orleans Street, the Chicago River, and a line 352.50 feet south of and
parallel with the south line of West Kinzie Street in Chicago, Illinois (such
land and Building hereinafter referred to, together with all present and future
easements, additions, improvements and other rights appurtenant thereto, as the
"Property"), for a term beginning on the Commencement Date (as hereinafter
defined) and ending on the last day of the *** Lease Year (as hereinafter
defined) thereafter ("Term"), unless sooner terminated as provided herein,
subject to the terms, covenants and agreements herein contained.
The Commencement Date shall be the earlier of (a) substantial completion of
Tenant's Work (as defined Article 35) or (b) July 1, 1997 (subject to extension
in the event of' a Landlord Delay as provided in Article 35(A) or Article
35(B)(3)hereof).
For purposes of this Lease, "Lease Year", shall mean a period of twelve
(12) consecutive calendar months, the first of which shall commence on the
Commencement Date if the Commencement Date shall be the first day of a calendar
month, or on the first day of the first calendar month following the
Commencement Date if the Commencement Date shall be other than on the first day
of a calendar month, and shall end on the last day of the twelfth (12th)
calendar month thereafter. Each successive Lease Year shall be a twelve (12)
calendar month period commencing on the anniversary of the commencement of the
first Lease Year.
__________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
(B) Landlord and Tenant agree that the rentable area of the Premises
initially demised pursuant to this Article 1 and any additional space that at
any time may be demised hereunder shall be computed in accordance with Building
Owners and Managers Association International Standard Method for Measuring
Floor Area in Office Buildings known as American National Standard ANS1 Z65.1-
1996 (approved June 7, 1996) by American National Standards Institute, Inc.
("BOMA Standards"); provided, however, that the rentable area of any space added
to the Premises shall be calculated by adding to the usable area of such space a
percentage of said usable area equal to fifteen percent (15%), or BOMA Standard,
whichever is less. In any event, it is agreed that after the addition of both of
the Take-Down Spaces pursuant to Article 36, Tenant shall occupy the ***
consisting of approximately *** rentable square feet.
(C) Upon final approval of the plans and specifications for Tenant's Work,
Landlord and Tenant agree to confirm the rentable square footage of the Premises
and if the rentable square footage is not *** rentable square feet, then
Landlord and Tenant shall amend this Lease to reflect the actual rentable square
footage of the Premises and the Base Rent payable pursuant to Article 3,
Tenant's Proportionate Share set forth in Article 4 and Landlord's Contribution
set forth in Article 34 shall be adjusted to reflect the actual rentable square
footage of the Premises.
2. USE. Tenant will use and occupy the Premises for general office purposes
and for the transmitting of television, telephone and other telecommunications
signals for which Tenant is legally licensed and incidental uses thereto and for
no other use or purpose. Tenant will not use or permit upon the Premises
anything that will invalidate any policies of insurance now or hereafter carried
on the Building or that will increase the rate of insurance on the Premises or
on the Building. Tenant will pay all extra insurance premiums on the Building
which may be caused by the use which Tenant shall make of the Premises (other
than a use stated in the first sentence hereof). Tenant will not (a) use or
permit upon the Premises anything that may be dangerous to life or limb; (b) in
any manner deface or injure the Building or any part thereof or overload the
floors of the Premises; or (c) do anything or permit anything to be done upon
the Premises in any way creating a nuisance or disturbing any other tenant in
the Building or the occupants of neighboring property, or tending to injure the
reputation of the Building. Tenant shall further not carry-on or permit any
activities which might: (1) involve the storage, use or disposal of medical or
hazardous waste or substances or the creation of an environmental hazard other
than such substances in such amounts customarily used in normal office
operations; or (2) impair or interfere with (i) the structure of the Building or
the operation of Building systems, (ii) the character, reputation or appearance
of the Building as a first-class building, (iii) the furnishing of services
(including utilities, telephone and communications) to any portion of the
Building, or (iv) the enjoyment by any other occupants of the Building or the
benefits of such occupancy (for example, free of noise, odors or vibration
emanating from the Premises). The Premises shall not be used for the purposes
of any so called "office suites", schools, employment
________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-2-
<PAGE>
agencies, medical treatment facilities or any retail or wholesale activities,
except as incidental to Tenant's permitted use described above. Tenant will
fully and promptly comply, and operate the Premises in conformity, with all
applicable federal, state and municipal laws, ordinances, codes, regulations and
requirements respecting the Premises or Tenant's use or occupancy thereof, and
activities therein provided, however, Tenant shall not be responsible for
assuring that the "Building Systems" (as defined in Article 7 hereof), other
than any Building Systems constructed or installed by Tenant, are in compliance
with such laws, ordinances, codes, regulations or requirements. Tenant will not
use the Premises for lodging or sleeping purposes, nor conduct or permit to be
conducted on the Premises any business or activity which is contrary to the
provisions of this Lease or to any applicable governmental laws, ordinances,
codes, regulations and requirements. Tenant shall promptly pay all taxes of
whatever kind which are imposed upon Tenant but which are to be collected by
Landlord. Tenant shall at no time sell food on or from the Premises. Tenant
shall at no time sell (within the meaning of the Illinois Liquor Control Act, as
now or hereafter amended) alcoholic liquor on or from the Premises, provided,
however, that Tenant may occasionally give complimentary food and alcoholic
liquor to its guests on the Premises, on condition that Tenant shall comply with
all applicable governmental requirements, and on further condition that, prior
to the giving of such alcoholic liquor, Tenant shall procure and maintain
continuously thereafter (or cause to be procured and maintained continuously
thereafter) in force a policy of or endorsement for host liquor liability
insurance, as set forth in Article 25 hereof.
3. BASE RENT. Tenant shall pay to Landlord an annual base rent ("Base Rent")
for the Premises, (initially based on *** rentable square feet and including
adjustments necessary to reflect the addition of the First Take-Down Space and
Second Take-Down Space pursuant to Article 36 hereof) as shown below for each
respective period in equal monthly installments during each respective period as
follows:
<TABLE>
<CAPTION>
ANNUAL MONTHLY BASS RENT PER
LEASE YEAR BASE RENT INSTALLMENT RENTABLE SQUARE FOOT
---------- --------- ----------- --------------------
<S> <C> <C> <C>
*** *** *** ***
</TABLE>
_______________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-3-
<PAGE>
Tenant shall pay each installment of Base Rent in advance on the first day of
every calendar month of the Term. All such payments shall be made payable to
Landlord or Landlord's agent and shall be made at the office of the Building or
at such other places and to such other parties as Landlord shall from time to
time by written notice appoint. Base Rent shall be payable without any prior
demand therefor and without any deductions or set-offs whatsoever. If the Term
commences on a day other than the first day of the calendar month, or ends on a
day other than the last day of the, calendar month, the Base Rent for such
fractional month shall be prorated on the basis of 1/365th of the annual Base
Rent for each day of such fractional month.
4. RENT ADJUSTMENTS. Landlord and Tenant agree that the following rent
adjustments shall be made with respect to each calendar year of the Term, or
portion thereof, including the calendar year in which the Term of this Lease
begins and the calendar year in which the Term of this Lease terminates, after
the Base Year (which Base Year for purposes of this Lease shall be the calendar
year ending on December 31, 1997). For purposes of such rent adjustments,
Tenant's Proportionate Share is agreed to be ***%, calculated by dividing ***
rentable square feet, the initial square footage of the Premises by ***, being
the rentable square feet in the Building, and effective on *** Tenant's
Proportionate Share is increased to ***%. to reflect the addition of the First
Take-Down Space of *** rentable square feet to the Premises pursuant to Article
36 hereof and effective on ***, Tenant's Proportionate Share is increased to
***% to reflect the addition of the Second Take of *** rentable square feet to
the Premises.
________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-4-
<PAGE>
(A) Tenant shall pay to Landlord as additional rent an amount equal
to Tenant's Proportionate Share of the amount by which Ownership Taxes (as
hereinafter defined) paid in any calendar year during the Term after the Base
Year exceed Ownership Taxes paid in the Base Year. Subject to the provisions
below in this Paragraph (A), "Ownership Taxes" shall mean all taxes,
assessments, impositions and governmental charges of every kind and nature which
Landlord shall pay in a calendar year because of or in any way connected with
the ownership, leasing, management, and operation of the Building and the
Property. The definition of Ownership Taxes is subject to the following:
(1) the amount of ad valorem real and personal property taxes against
Landlord's real and personal property to be included in Ownership Taxes shall be
the amount shown by the latest available tax bills required to be paid in the
calendar year in respect of which ownership Taxes are being determined. The
amount of any tax refunds shall be deducted from Ownership Taxes in the calendar
year they are received by Landlord;
(2) the amount of special taxes and special assessments to be
included shall be limited to the amount of the installments (plus any interest,
other than penalty interest, payable thereon) of such special tax or special
assessment required to be paid during the calendar year in respect of which
Ownership Taxes are being determined;
(3) there shall be excluded from Ownership Taxes all income taxes
[except for a specific tax or excise on rents or other income from the Property
(or on the value of leases thereon) or a specific gross receipts tax or excise
on rents or other income from the Property (or on the value of leases thereon)],
excess profit taxes, franchise, capital stock and inheritance or estate taxes,
except to the extent that any such tax is in lieu of, in substitution for, or a
supplement to, in whole or in part, any tax included in Ownership Taxes.
Ownership Taxes shall also exclude all taxes, assessments, charges, costs and
disbursements paid in connection with the portion of the Building used for hotel
purposes, and provided Tenant has timely paid Tenant's Share of Ownership Taxes,
ownership Taxes shall exclude any penalties imposed in connection with any
failure of Landlord to timely pay any Ownership Taxes; and
(4) Ownership Taxes shall also include, in the calendar year paid,
any actual out-of-pocket fees, costs and expenses (including reasonable
attorneys' fees) incurred by Landlord in contesting or attempting to reduce or
limit any ownership Taxes, regardless of whether any such reduction or
limitation is obtained.
-5-
<PAGE>
(B) Tenant shall also pay to Landlord as additional rent an amount
equal to Tenant's Proportionate Share of the amount by which Operating Expenses
for any calendar year during the Term after the Base Year exceed Operating
Expenses for the Base Year. Subject to the provisions below in this Paragraph
(B) , Operating Expenses shall mean all expenses, costs and disbursements of
every kind and nature paid, incurred, or otherwise arising in respect of a
calendar year because of or in connection with the ownership, management,
maintenance, repair, and operation of the Building and the Property. The
definition of Operating Expenses is subject to the following:
(i) There shall be excluded from Operating Expenses: (1) costs
of alterations of tenant spaces; (2) depreciation and amortization except as
specifically provided herein; (3) principal and interest payments on mortgages,
and financing or refinancing expenses; (4) return on investment; (5) Ownership
Taxes with the respect to which Tenant is liable for its Proportionate Share
pursuant to the preceding paragraph (A); (6) the cost of capital improvements,
capital repairs in the nature of capital replacements, and capital equipment,
except as provided in clause (ii) below with respect to capital items resulting
in a reduction or limitation in Operating Expenses or required to comply with
governmental requirements; (7) ground lease or master lease rents or costs in
connection therewith; (8) real estate brokers, leasing commissions or
compensation and any other expenses incurred in leasing space or procuring
tenants; (9) any costs for which Landlord has received reimbursement (other than
reimbursements from tenants under operating expense escalation clauses), whether
from insurance or condemnation proceeds or clockwise; (10) attorneys, fees,
costs and disbursements and other expenses incurred in connection with
negotiation or enforcement of leases with tenants or prospective tenants of the
Building; (11) expenses in connection with any service or other benefits of a
type which are not provided to Tenant but which are Provided to another tenant
or occupant of the Building; (12) overhead and profit increment paid to parents,
subsidiaries or affiliates of Landlord or its beneficiary for services on or to
the Building to the extent only that the costs of such services exceed the
competitive costs of such services were they not so rendered by such parent,
subsidiary or affiliate (subject, however, to the provision in clause (15) below
as to management fees); (13) any compensation paid to clerks, attendants or
other persons in commercial concessions operated by Landlord or Landlord's
beneficiary or any affiliate of either; (14) advertising, marketing and
promotional expenditures; (15) management fees to the extent such fees exceed
similar costs incurred in comparable office buildings in the area; provided,
however, that in any event Tenant agrees that there may be included in Operating
Expenses a management fee, whether paid to an affiliate of Landlord's
beneficiary or an unrelated third party, in an amount up to 3% of gross revenues
derived from the Building; (16) wages, salaries or other compensation paid to
any employees of Landlord or Landlord's beneficiary or management agent above
the grade of building manager; (17) penalties or fines incurred in connection
with Landlord's failure to comply with laws unless caused by the act or omission
of Tenant, its agents or employees, and (18) all charges, costs and
disbursements properly allocable to the Hotel Premises.
-6-
<PAGE>
(ii) In the event Landlord makes any capital improvement or any capital
repair in the nature of a capital replacement or installs any capital equipment
during the Term hereof which (a) results in a reduction or limitation in
Operating Expenses, or (b) is required to comply with any governmental rules,
regulations or requirements applicable from time to time to the Building or to
the Property and enacted or initially enforced after the date of execution
hereof, the costs thereof, as amortized in each case on a straight-line basis
(unless otherwise required by generally accepted accounting principles) over the
useful life of the item so capitalized, may be included in Operating Expenses;
provided, however, that the amount paid by Tenant for any calendar year or
portion thereof which falls within the Term of this Lease on account of a
capital item described in clause (a) above shall not exceed the actual reduction
in Tenant's Proportionate Share of Operating Expenses with respect to such
calendar year or portion thereof by reason of such capital item. If the
Building shall not have been fully occupied by tenants at any time during the
Base Year or any succeeding calendar year, the Operating Expenses for such year
may be equitably adjusted to reflect the Operating Expenses which vary with
occupancy as though the Building had been fully occupied throughout such year.
(C) [Intentionally Deleted]
(D) In order to provide for current payments on account of increases in
Ownership Taxes and Operating Expenses over the Base Year, Tenant agrees, at
Landlord's request, to pay on account to Landlord for each calendar year of the
Term or portion thereof following the Base Year, Tenant's share of adjustments
due for such ensuing calendar year or portion thereof, as reasonably estimated
by Landlord from time to time, in equal monthly installments, commencing on the
first day of the month following the month in which Landlord notifies Tenant of
the amount of such estimated rent adjustments or revisions thereto. The
installments of estimated rent adjustments payable for each month of the current
calendar year prior to the date of receipt of Landlord's estimate shall be due
and payable within thirty (30) days after the receipt of such estimate. If, as
finally determined (whether in the succeeding calendar year at the time of
delivery of the statement provided for in paragraph (E) hereof, or in the
current calendar year when the final amount of any portion of Ownership Taxes
becomes known to Landlord), such rent adjustments shall be greater than or less
than the aggregate of all installments so paid on account to Landlord prior to
receipt of an invoice from Landlord, then Tenant upon receipt of such invoice
shall pay to Landlord within twenty (20) days immediately following such
notification the amount of such underpayment, or, provided Tenant is not in
default hereunder, Landlord shall credit Tenant against the rent next coming due
for the amount of such overpayment, as the case may be. It is the intention
hereunder to estimate from time to time the amount of increases in Ownership
Taxes and Operating Expenses for each calendar year over Ownership Taxes and
Operating Expenses for the Base Year, and then to finally determine such rent
adjustments at the end of such calendar year or as soon thereafter as possible
based upon actual increases in Ownership Taxes and Operating Expenses for such
calendar year.
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<PAGE>
(E) Landlord agrees to keep books and records showing the Ownership Taxes
and operating Expenses in accordance with a system of accounts and generally
accepted accounting principles consistently maintained on a year-to-year basis
in compliance with -such provisions of this Lease as may affect such accounts.
Landlord agrees that any cost included in Operating Expenses or Ownership Taxes
shall not be included in more than one category of costs comprising Operating
Expenses or ownership Taxes. Landlord shall deliver to Tenant within one
hundred fifty (150) days after the close of each calendar year (including the
calendar year in which this Lease begins and the calendar year in which this
Lease terminates), a statement certified by an officer of Landlord Is agent
substantially in the form of the sample statement attached hereto and made a
part hereof as Exhibit "B". Failure or delay in delivering any such statement
or accompanying invoice, or failure or delay in computing the rent adjustments
pursuant to this Article 4, shall not be deemed a waiver by Landlord of its
right to deliver such items nor shall any such failure or delay be deemed a
release of Tenant's obligations with respect to any such statement or invoice,
or constitute a default hereunder. All rent adjustments payable hereunder shall
be made without any deductions or set-offs whatsoever.
(F) The obligation of Tenant with respect to the payment of Base Rent and
rent adjustments due hereunder shall survive the expiration or termination of
this Lease. Any payment, refund, or credit made pursuant to this Article shall
be made without prejudice to any right of Tenant to dispute, or of Landlord to
correct, any items as billed pursuant to the provisions hereof. In the event
that the Term of this Lease shall have been in effect for less than the full
calendar year immediately preceding Tenant's receipt of the invoices provided
for in paragraphs (D) and (E) hereof or if the Term shall end on a day other
than the last day of a calendar year, the rent adjustment shall be pro rata on a
per diem basis. In no event shall any rent adjustment result in a decrease in
the Base Rent payable from time to time hereunder. Notwithstanding anything
contained herein to the contrary, Landlord shall not have the right to make
demand upon Tenant for additional amounts due with respect to, Operating
Expenses and Ownership Taxes for any calendar year and Tenant shall not have to
right to dispute or contest the amounts due or paid with respect to Operating
Expenses and Ownership Taxes for any calendar year more than three (3) full
years after the end of said calendar year.
(G) In the event that Tenant disputes the accuracy of the statement, or
the information therein contained, furnished by Landlord to Tenant pursuant to
Paragraph (E) above, Tenant may require upon delivering notice in writing within
sixty (60) days after submission of such statement that Ownership Taxes and
Operating Expenses be audited by an independent, nationally recognized public
accounting firm selected by Tenant and satisfactory to Landlord, at Tenant's
expense, except as hereinafter provided. If as finally determined Tenant's
Proportionate Share of actual Operating Expenses and Ownership Taxes for any
calendar year is ninety-five percent (95%) or less of Tenant's Proportionate
Share of Operating Expenses and Ownership Taxes as shown in the statement
furnished by Landlord to Tenant pursuant to Paragraph (E),
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<PAGE>
Landlord shall pay the reasonable costs and expenses incurred by Tenant in
engaging such public accounting firm to render such statement and if it is
finally determined that Tenant has overpaid for Tenant's Proportionate Share of
Operating Expenses or Ownership Taxes as a result of an error by Landlord,
Landlord shall credit to tenant the amount of such overpayment in the manner
provided above in Paragraph (D); provided, further, that if as finally
determined Tenant's Proportionate Share of actual Operating Expenses or actual
Ownership Taxes for any calendar year is greater than Tenant's Proportionate
Share of Operating Expenses or ownership Taxes as shown in such statement
furnished by Landlord to Tenant, Landlord in such instance reserves the right to
issue to Tenant an amended invoice adjusting the amount of Tenant's
Proportionate Share payable by Tenant to Landlord for such year. The statement
rendered by such public accounting firm shall be final, binding and conclusive
upon Landlord and Tenant.
(H) In the event Tenant selects such firm of nationally recognized
certified public accountants to examine Landlord's books and records for any
calendar year, such firm shall promptly conduct such examination in accordance
with generally accepted accounting principles consistently applied and, as soon
as practicable, render to Landlord and Tenant a report stating such accountants,
determination of the Operating Expense and Ownership Tax increase or decrease
for such year over the Base Year and, if such determination is inconsistent with
Landlord's statement of Operating Expense or Ownership Tax increase furnished to
Tenant by Landlord, a reasonably-detailed basis for the determination and
explanation of each discrepancy.
Such accountants engaged by Tenant may inspect, audit, review, copy and
examine (and Landlord agrees to make the same available for such purposes) in
Chicago, Illinois only such of Landlord's books and records as are directly
related to the preparation of Landlord's statement of Operating Expense and
Ownership Tax increase, and such accountants engaged by Tenant may examine none
of Landlord's books and records with respect to any property other than the
Property.
Landlord shall not be obligated to permit any individual to examine
Landlord's books and records unless such individual and such individuals
employer first execute and deliver to Landlord a written acknowledgment
affirming that (i) such individuals examinations of Landlord's books and records
shall be strictly confidential, and (ii) the results thereof and information
derived therefrom or obtained in the course thereof shall not be (a) disclosed
by such parties to any. person other than such individual's direct supervisor
and Tenant's employees who have a position within Tenant requiring them to know
such information and other individuals to whom disclosure is required by law or
governmental rule or regulation, or (b) used by such parties for any purpose
other than in preparing the report to be rendered to Landlord and Tenant;
provided, however, such results and information from the accountant's
examination may be used by Landlord and Tenant in enforcing their respective
rights and obligations hereunder.
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<PAGE>
Tenant hereby covenants and agrees with Landlord that any examination of
any information relating to Operating Expenses or Ownership Taxes furnished by
Landlord to Tenant and any examination of Landlord's books and records by
Tenant, its employees or agents shall be confidential in accordance with the
provisions of this Paragraph (H) and the results of such examinations and
information derived therefrom or obtained in the course thereof shall not be
disclosed to anyone or used for any purpose other than as permitted pursuant to
this Article 4.
5. CONDITION OF PREMISES. Tenant's entry into possession of all or any
part of the Premises shall be conclusive evidence as against Tenant that such
part of the Premises was in good order and satisfactory condition when Tenant
took possession, except for (a) any latent defects in the structure of the
Building (including the exterior of the Building and exterior windows of the
Building), or (b) any latent defects in the Shell and Core Work constructed for
Tenant's occupancy pursuant to Article 35(A) or in the electrical, plumbing,
HVAC or other common systems of the Building, excluding items of damage caused
by Tenant, its agents, contractors and suppliers, or (c) any incomplete Shell
and Core Work which shall be identified by Landlord and Tenant prior to 14
Tenant's entering into possession of the Premises for the purpose of conducting
its business therein, or (d) any latent defects in any Tenant's Work furnished
by Landlord pursuant to Article 35.B, and any punchlist items in such Tenant's
Work identified by Landlord and Tenant prior to Tenant's entering into
possession of the Premises for the purpose of conducting its business therein.
Tenant acknowledges that no promise of Landlord or its agents to alter, remodel
or improve the Premises or the Building and no representation respecting the
condition of the Premises or the Building have been made by Landlord or its
agents to Tenant other than as may be contained herein.
6. POSSESSION.
(A) In the event that possession of the Premises shall not be delivered to
Tenant on the date above fixed for the commencement of the Term, this Lease
shall nevertheless continue in full force and effect, and no liability shall
arise against Landlord out of any such delay beyond the abatement of rent as
provided in Article 35(A).
(B) Tenant shall have the right from time to time to enter into possession
of all or any part of the Premises prior to the Commencement Date for the
purpose of conducting its business therein. All of the covenants and conditions
of this Lease (including, without limitation, Landlord's provision of services
as described in Article 9 hereof) shall be binding upon the parties hereto in
respect of such pre-Term possession the same as if the first day of the Term had
been fixed as of the date when tenant entered such possession, except that
Tenant shall not be obligated to pay any Base Rent or any rent adjustments
pursuant to Article 4 hereof for the period prior to the Commencement Date, but
Tenant shall be responsible for the payment of electricity pursuant to Article
9(C) and for the payment of all costs incurred for janitorial and
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<PAGE>
cleaning services for the Premises from and after the date that Tenant so enters
into possession for purposes of conducting business therein.
7. REPAIRS. Subject to Force Majeure events (as defined in Article
35(A)), Tenant will, at its own expense and subject to the provisions of Article
8 of this Lease, keep the "Tenant Responsible Premises" (as defined below in
this Article 7) in good repair and tenantable condition at all times during the
Term of this Lease, and Tenant shall promptly and adequately repair all damages
to the Tenant Responsible Premises (except reasonable wear and tear and as
otherwise provided in Article 25 of this Lease) and replace or repair all
damages or broken interior glass (including any glass demishing walls and signs
thereon, fixtures and appurtences, under the cited supervision and with the
approval of Landlord, and within any reasonable period of time specified by
Landlord. If Tenant does not do so, ten (10) days after written notice from
Landlord (or sooner in an emergency situation or other situation giving or
threatening to give rise to damage to person or property exists), Landlord may,
but need not, make such repairs or replacements and the amount paid by Landlord
for such repairs and replacements (including Landlord's overhead and profit and
the cost of general conditions at Landlord's then published rates) shall be
deemed additional rent reserved under this Lease due and payable within thirty
(30) days after delivery of a bill therefor by Landlord. Landlord may, but
shall not be required so to do, enter the Premises at all reasonable times to
make such repairs or alterations, improvements and additions, including but not
limited to ducts and all other facilities for air conditioning service, as
Landlord shall deem necessary or appropriate for the safety, preservation or
improvement of the Premises or the Building or any equipment located in the
Building, or as Landlord may be required to do by the City of Chicago or by the
order or decree of any court or by any other governmental authority, provided
that Landlord gives Tenant prior notice (except in cases of an emergency) of any
such repairs, alterations, improvements and additions in the Premises, and
(except in cases of an emergency) so long as the performance of such work during
ordinary business hours does not unreasonably interfere with Tenant's ability to
conduct its business in the Premises.
In the event Landlord or its agents or contractors shall elect or be
required, in accordance with the preceding grammatical paragraph, to make
repairs, alterations, improvements or additions to the Premises or the Building
or any equipment located in the Building, Landlord shall be allowed to take into
and upon the Premises all material that may be required to make such repairs,
alterations, improvements or additions and, during the continuance of any said
work, to temporarily close doors, entryways, public space and corridors in the
Building and to interrupt or temporarily suspend Building services and
facilities without being deemed or held guilty of eviction of Tenant or for
damages for Tenant's property, business or person, and the rent reserved herein
shall in no way abate while said repairs, alterations, improvements or additions
are being made, and Tenant shall not be entitled to maintain any off-set or
counterclaim for damages of any kind against Landlord by reason thereof.
Landlord may, at its option, make all repairs, alterations, improvements and
additions in and about the Building and the Premises
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<PAGE>
during ordinary business hours, so long as (except in case of an emergency) the
performance of such work during ordinary business hours does not materially
interfere with Tenant's access to the Premises or Tenant's ability to conduct
its business in the Premises, and if such work during ordinary business hours is
not of an emergency nature and does not materially interfere with Tenant's
access to the Premises or Tenant's ability to conduct its business in the
Premises and Tenant nonetheless desires to have the same done during any other
hours Tenant shall pay for all overtime and additional expenses resulting
therefrom.
As used herein, "Tenant Responsible Premises" shall mean all alterations,
additions and improvements in and to the Premises at any time or from time to
time existing, whether constructed by Landlord or Tenant, including but not
limited to all items of work constructed in the Premises in preparation for
Tenant's initial occupancy thereof and any Antennae installed by Tenant from
time to time on the Roof as described in Article 40, but excluding all "Building
Systems" (as defined below in this Article 7).
Subject to Force Majeure events, Landlord shall keep in good order and
repair (and the cost thereof may be included in Operating Expenses), except as
otherwise provided in Subparagraph B(ii) of Article 4 hereof) the following
items ("Building Systems"): (i) the structural components and common areas of
the Building serving the Premises; (ii) the mechanical, electrical, plumbing,
heating ventilation, and air cooling systems serving the Premises unless
installed by Tenant, including components of said systems outside and up to the
perimeter of the Premises, but, other than as set forth in clauses (iii) and
(iv), excluding any related systems, fixtures and equipment located within the
Premises which are not a part of the Shell and Core Work; (iii) HVAC ducts in
the Premises, but excluding variable air volume (VAV) boxes, reheats, in-ducts
and other equipment and devices in or attached to the ducts; and (iv) the
Building sprinkler system serving the Premises, including piping up to the
Premises but excluding any piping, heads and apparatus within the Premises.
Any liability of Tenant or Landlord for the performance of their respective
obligations under this Article 7 shall be subject to the provisions of Articles
11 and 25 hereof.
8. ALTERATIONS. Tenant shall not, without the prior written consent of
Landlord in each instance obtained, make any repairs, replacements, alterations,
improvements or additions (collectively, "Improvements") to the Premises, the
performance of which affects the Building structure, Building systems, common
areas or other tenants' premises. Tenant shall give Landlord reasonable prior
notice of all Improvements during the Term whether or not Landlord's consent
thereto is required. To the extent Landlord's consent is required for any
Improvements, such consent shall not be unreasonably withheld or delayed, but
such consent may be conditioned upon such requirements regarding such
Improvements as Landlord deems appropriate, including without limitation, the
submission of detailed plans and specifications, and such Improvements shall be
of a quality equal to or better than the standards of the Building. At
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<PAGE>
the time that Landlord gives its consent to any such improvements, Landlord may
designate in writing any items which are atypical for standard office uses or
require unusual expense for the removal (such as, but not limited to, staircases
and vaults) as items which Landlord reserves the right to require Tenant to
remove upon the expiration of the Term or upon any termination of this Lease or
Tenant's right to possession hereunder. Neither approval of any plans and
specifications nor supervision of any improvement work by Landlord or its agents
shall constitute a representation or warranty by Landlord or its agents that
such plans or work either (i) are complete or suitable for their intended
purpose, or (ii) comply with applicable laws, ordinances, codes and regulations,
it being expressly agreed by Tenant that Landlord assumes no responsibility or
liability whatsoever to Tenant or to any other person or entity for such
completeness, suitability or compliance. All such Improvements shall be done at
Tenant's expenses by employees or agents of Landlord or contractors hired by
Landlord (or by contractors hired by Tenant which contractors shall be subject
to Landlord's prior written consent, which shall not be unreasonably withheld,
and which contractors must be reputable and financially responsible, maintain
proper insurance and ***), and, in either event, Tenant shall pay to Landlord
or its agent a reasonable charge for supervision, general conditions, overhead
and other actual out-of-pocket costs and expenses incurred by Landlord in
connection with such work, as established by Landlord from time to time. The
billing for such employees' time and general conditions shall be based upon the
then published rates of the Building.
In the event that Tenant uses its own contractors for the Improvements
Landlord may, without limitation, require Tenant to: (a) comply with such
constructions standards or procedures as may be applicable from time to time for
construction activities in the Building; (b) give assurances reasonably
satisfactory to Landlord that the construction of such Improvements will not
***; (c) submit satisfactory insurance certificates; (d) obtain all necessary
permits; (e) furnish satisfactory security for the payment of all costs to be
incurred in connection with the Improvements; and (f) upon completing any such
Improvements, furnish Landlord with contractors' affidavits and full and final
waivers of lien and receipted bills covering all labor and material expended and
used and furnish Landlord with final construction drawings (marked up as
constructed) for any such Improvements.
Landlord and Tenant acknowledge that the Americans With Disabilities Act of
1990 (42 U.S.C. (S) 12-101 et seq.) and regulations and guidelines promulgated
-- ---
thereunder, as all of the same may be amended and supplemented from time to time
(collectively "ADA"), establish requirements for business operations,
accessibility and barrier removal, and that such requirements may or may not
apply to the Premises and the Building depending on, among other things,
whether: (1) Tenant's business is deemed a "public accommodation" or
"commercial facility", (2) such requirements are "readily achievable", and (3) a
given alteration affects a "primary function area" or triggers "path of travel"
requirements. The parties hereby agree that
________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
(a) Landlord shall be responsible for ADA Title III compliance in the common
areas of the Building, except as provided below, (b) Tenant shall be responsible
for ADA Title III compliance in the Premises, including direct access into the
Premises and any leasehold improvements or other work to be performed in the
Premises under or in connection with this Lease other than the Shell and Core
Work, and (c) Landlord may perform, or require that Tenant perform, and Tenant
shall be responsible for the cost of, ADA Title III "path of travel"
requirements triggered by alterations in the Premises other than the Shell and
Core Work and the Tenant's Work to be performed in connection with Tenant's
initial occupancy of the Premises. Tenant shall be solely responsible for
requirements under Title I of the ADA relating to Tenant's employees.
All Improvements shall comply with all insurance requirements and with all
applicable governmental laws, requirements, codes, ordinances and regulations.
All Improvements shall be constructed in a good and workmanlike manner and only
good grades of material shall be used. Except for he negligence of Landlord,
its beneficiary or their respective agents, Tenant shall protect, defend,
indemnify and hold Landlord, the Building and the Property, Landlord's
beneficiaries, and their respective officers, directors, beneficiaries,
partners, agents and employees harmless from any and all liabilities of every
kind and description which may arise out of or in connection with such
Improvements.
All Improvements made by Landlord or Tenant in or upon the Premises whether
temporary or permanent in character, including but not limited to wall
coverings, carpeting and other floor covering, lighting installations, built-in
or attached shelving, cabinetry, and mirrors, and shall become Landlord's
property and shall remain upon the Premises at the termination of this Lease by
Lapse of time or otherwise without compensation to Tenant [excepting only
Tenant's movable office furniture, trade fixtures (other than attached or
installed lighting equipment), telecommunications and broadcasting equipment and
office equipment]; provided, however, that Landlord shall have the right to
require Tenant to remove at Tenant's sole cost and expense in accordance with
the provisions of Article 16 of this Lease: such Improvements which, in the
case of initial Improvements to the Premises, are atypical for standard office
uses or require unusual expense for removal (such as, but not limited to,
staircases, vaults and telecommunications and broadcasting equipment) and are so
identified in writing by Landlord at the time of its approval of the Plans
pursuant to Article 35; any and all hazardous materials installed or placed in
the Premises by Tenant; any equipment installed by Tenant on the roof of the
Building or elsewhere outside the Premises, and any cabling and wiring and other
facilities located outside the Premises and serving or intended to serve the
Premises; and any items which Landlord previously designated for possible
removal, at the time Landlord granted its consent to such Improvements, as
provided above in this Article 8.
All cabling, wiring and equipment installed at any time by or on behalf of
Tenant outside of the Premises on the Property, whether as part of the initial
Tenant's Work or otherwise,
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<PAGE>
including, without limitation, any such items installed in connection the
Antennae described in Article 40 hereof (any installation of any such cabling,
wiring or equipment shall in all cases be subject to Landlord's consent in its
absolute discretion), shall be operated and maintained at Tenant's sole cost and
expense in a manner which does not disturb improvements on the Property or the
operation thereof or interfere with the operations of, or services provided to,
tenants in the Building. Any such installation, operation, and maintenance shall
be in accordance with any reasonable rules and regulations established by the
Landlord from time to time, shall be at Tenant's sole risk, and shall be subject
to the Tenant insurance requirements of Article 25 hereof and the provisions of
Article 11 hereof. All such cabling, wiring and equipment shall be appropriately
identified by color code, identification plate and/or other means reasonably
specified by Landlord at the time of installation if initially installed by
Tenant, and Tenant shall provide Landlord with plans and drawings locating and
identifying such items in such detail as may be reasonably requested by
Landlord.
9. SERVICES. Landlord shall provide the following services on all days
during the Term of this Lease excepting Sundays and holidays (which holidays are
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day and may, in addition, include any other holiday from time to time
observed by Tenant), unless otherwise stated:
(A) Adequate passenger elevator service will be furnished daily as
determined by Landlord, including the services of at least one (1) passenger
elevator at all times (including holidays), subject to Force Majeure.
(B) Conditioned air for heating, ventilating and cooling when
necessary for normal comfort in the Premises will be provided from 8:00 A.M. to
8:00 P.M. Monday through Friday, and 8:00 A.M. and 1:00 P.M. Saturday, in
accordance with the standards for the Premises set forth in Exhibit "C" attached
hereto and made a part hereof. Whenever heat-generating machines, equipment or
lighting fixtures installed by Tenant or excessive electrical usage by Tenant
affect the temperature maintained by Landlord in the Premises, Landlord shall be
relieved of responsibility for maintaining air conditioning in the Premises, and
in such event Landlord further reserves the right at its option to (1) require
Tenant to discontinue use of such heat-generating machines, equipment, lighting
fixtures or excessive electrical load, or (2) install supplementary air
conditioning units in the Premises, the cost, installation, operation and
maintenance of which shall be paid by Tenant to Landlord at such rates as
Landlord charges from time to time in the Building. Tenant agrees that at all
times it will cooperate with Landlord and abide by all regulations and
requirements which Landlord may prescribe for proper functioning of the
ventilating and air conditioning systems.
Landlord agrees that it shall make available to Tenant after-hours
HVAC service at the expense of Tenant at times other than those identified above
in this Paragraph (B),
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<PAGE>
provided that if Tenant desires any such service on Mondays through Fridays
(holidays described above excepted), it shall request such service from Landlord
on or before 4:00 p.m. on the day for which such service is requested, and in
the event Tenant desires such service on Saturdays or Sundays or holidays (as
described above), it shall request such service from Landlord no later than 4:00
p.m. on Friday (for service on Saturday or Sunday) and by 4:00 p.m. on the day
preceding any holiday (for service on such holiday). Tenant shall pay for all
such after-hours HVAC services at Landlord's published rates in effect in the
Building from time to time (the published rates currently in effect being
$81/hour per fan for water chilled air and $51/hour per fan for circulating
air). Tenant may request such after-hours HVAC service by zone (determined by
the respective areas served by separate fan rooms); and if another tenant has
also specifically requested such after-hours service in the same zone during the
same time period as requested by Tenant, Landlord shall reasonably allocate the
charge for such service between Tenant and such other tenants so requesting such
service.
(C) Electricity for the Premises shall not be furnished by Landlord
but shall be furnished and billed directly to Tenant by the electric utility
company serving the Building. Landlord shall cause the Premises to be separately
metered, if necessary. Tenant shall make all necessary arrangements with the
utility company for paying for electric current furnished by it to Tenant and
Tenant shall pay for all charges for electric current consumed on the Premises
during the Term of this Lease. Tenant agrees that the minimum electrical load of
the Premises shall be engineered so that during and after normal business hours
the minimum temperature required therein shall be maintained by Tenant at all
times so long as electrical service to the Premises is not terminated or
interrupted through no fault or neglect of Tenant. Tenant shall not install or
operate any electrical equipment or fixtures that overload lines servicing the
Premises or which exceed a connected electrical load of the incidental use
equipment of an average of one watt per square foot of the Premises, and an
average of 7 watts per square foot of the Premises when added to Tenant's
electrical load for lighting.
(D) Janitorial services, as specified on Exhibit "D" attached hereto
and made a part hereof, shall be provided at the sole cost and expense of
Landlord, except that commencing on January 1, 1998, all increases in the costs
of providing such janitorial services to Tenant in any calendar year in excess
of Landlord's annualized cost per rentable square foot of providing such
services to Tenant in calendar year 1997 shall be paid by Tenant on an estimated
basis in monthly installments subject to final year-end adjustment in the same
manner as provided for the payment of Operating Expense adjustments in Article 4
hereof. Tenant may from time to time procure directly from Landlord's cleaning
contractor at Tenant's Expense such additional cleaning services as are desired
by Tenant.
(E) Building directory identification of a reasonable number of
listings for Tenant (not to exceed (10) listings).
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<PAGE>
(F) Additional services (including after-hour cooling and ventilation
and the provision of water) may be provided on terms and conditions as may be
mutually agreed upon by Landlord and Tenant. Subject to Force Majeure, Tenant
and its employees and invitees shall have access to the Premises twenty-four
(24) hours a day, seven (7) days a week, fifty-two (52) weeks a year. At times
other than normal business hours (i.e. 8 A.M. to 6 P.M. Monday through Friday)
access shall be available through limited entrances and subject to regulations
and procedures in place in the Building from time to time, including the
furnishing of proper employee identification or authorization and the
registering of a person's name, room number and time of entry and departure in a
register furnished by Landlord and placed in the Lobby of the Building.
Tenant shall apply to the applicable utility company or municipality for gas,
telephone and all other utility services, other than those provided by Landlord,
required by Tenant for use in the Premises in accordance with Article 2 hereof
and, subject to Article 8 hereof, Tenant shall be responsible for the connection
and installation of same.
All charges for any services shall be deemed rent reserved under this Lease and
shall be due and payable at the same time as the installment of rent with which
they are billed, or, if billed separately, shall be due and payable within
twenty (20) days after such billing. In the event Tenant shall fail to make
payment for such services within ten (10) days from notice from Landlord that
such amount has not been received, Landlord may, in addition to all other
remedies which Landlord may have for the non-payment of rent without notice to
Tenant, discontinue any or all such services (including, without limitation,
electric current for lights and power in the Premises), and such discontinuance
shall not be held or pleaded as an eviction or as a disturbance in any manner
whatsoever of Tenant's possession, or relieve Tenant from the payment of rent
when due, or vary or change any other provision of this lease or render Landlord
liable for damages for any kind whatsoever.
Tenant agrees that, to the extent permitted by law, neither Landlord nor its
beneficiaries nor any of their respective agents, partners or employees, shall
be liable to Tenant, or any of Tenant's employees, agents, customers or invitees
or anyone claiming through, by or under Tenant, for any damages, injuries,
losses, expenses, claims or causes of action, because of any interruption,
diminution, delay or discontinuance at any time in the furnishing of any of the
above services (including access to the Premises as described above in this
Article 9) when such interruption, diminution, delay or discontinuance is
occasioned, in whole or in part, by repairs, renewals, improvements or
additions, by any strike, lockout or other labor trouble, by inability to secure
gas, electricity, water or other fuel at the Building, by any accident or
casualty whatsoever, by act or default of Tenant or other parties, or by any
other cause beyond Landlord's reasonable control; nor shall any such
interruption, diminution, delay or discontinuance be deemed an eviction or
disturbance of Tenant's use or possession of the Premises or any part thereof;
nor shall any such interruption, diminution, delay or discountenances relieve
Tenant from full performance of
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Tenant's obligations under this Lease, except as otherwise expressly provided
herein. Notwithstanding the foregoing, in the event that (i) any interruption or
discontinuance of services (including access to the Premises as described above)
required to be provided pursuant to this Article 9 which was within the
reasonable control of Landlord to prevent continues beyond three (3) consecutive
business days after written notice to Landlord and materially and adversely
affects Tenant's ability to conduct business in the Premises or (ii) the
performance by Landlord of repairs in the Building that are not the
responsibility of Tenant materially and adversely affects Tenant's ability to
conduct business in the Premises and continues beyond three (3) consecutive
business days after written notice to Landlord, and on account of such
interruption or discontinuance described in clause (i) or such performance of
repairs described in clause (ii), Tenant ceases doing business in the Premises
(or a material portion thereof), Base Rent shall abate thereafter (as to the
Premises or as to such material portion thereof, as the case may be) and for so
long as Tenant remains unable to conduct its business in the Premises (or such
material portion thereof). Landlord agrees to use reasonable efforts to restore
such interrupted or discontinued service or to complete such repairs, as the
case may be, as soon as reasonably practicable.
10. COVENANT AGAINST LIENS. Tenant agrees to pay when due for any work
done or materials furnished by or on behalf of Tenant in or about the Premises
or to all or any part of the Property and nothing in this Lease contained shall
authorize or empower Tenant to do any act which shall in any way encumber the
title of Landlord in and to the Premises or to the Property, nor shall the
interest or estate of Landlord therein be in any way subject to any claims by
way of lien or encumbrance whether claimed by operation or law or by virtue of
any express or implied contract of Tenant, and any claim to a lien upon the
Premises or the Property arising from any act or omission of Tenant shall accrue
only against Tenant and shall in all respects be subordinate to the title and
rights of Landlord to the Premises and the Property. Tenant covenants and
agrees not to suffer or permit any lien or encumbrance to be placed against the
Premises, the Building or the Property with respect to work or services claimed
to have been performed for or materials claimed to have been furnished to Tenant
or the Premises and, in case of any such lien or encumbrance attaching, or claim
thereof being asserted, Tenant agrees to cause it to be immediately released and
removed of record, or to provide security as hereinafter provided. If Tenant
has not removed any such lien or encumbrance or provided Landlord with a title
indemnity bond or such other security as is reasonably satisfactory to Landlord
within thirty (30) days after notice to Tenant by Landlord, such failure shall
constitute a default hereunder and, in addition to all other remedies available
herein, Landlord may, but shall not be obligated to, pay the amount necessary to
remove the lien or encumbrance, without being responsible for making any
investigation as to the validity thereof, and the amount so paid together with
all costs and expenses, including reasonable attorneys' fees, incurred in
connection therewith shall be deemed additional rent reserved under this Lease
due and payable forthwith.
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11. WAIVER OF CLAIMS. Subject to the provisions of Article 25 hereof,
Tenant agrees that Landlord, Landlord's beneficiaries and their respective
officers, directors, beneficiaries, partners, agents, and employees shall not be
liable for (subject, however, to the provisions of Article 9 as to the abatement
of rent for interruption of services) any direct or consequential damage
(including, without limitation, damages claimed for actual or constructive
eviction) either to person or property sustained by Tenant or any other person,
due to the Building, the Property, or any part thereof or any appurtenances
thereof becoming out of repair, or due to the happening of any accident in or
about the Building or the Property, or due to any act or neglect of any tenant
or occupant of the Building or the Property, or any other person, except to the
extent that any such damage is caused by the negligence or intentional acts of
Landlord, its beneficiaries or their respective agents, contractors, servants or
employees. The foregoing provision, subject in all events to the provisions of
Article 25 as stated above, shall apply particularly (but not exclusively) to
damage caused by fire, explosion, water, snow, frost, steam, sewerage,
illuminating gas, sewer gas or odors, or by the bursting or leaking of pipes,
plumbing fixtures, or sprinkler system; without distinction as to the person
whose act or neglect was responsible for the damage and whether the damage was
due to any of the causes specifically enumerated above or to some other cause of
an entirely different kind. Tenant further agrees that all personal property
upon the Premises or brought or caused to be brought within the Building by
Tenant shall be at the risk of Tenant only and that Landlord shall not be liable
for any damage thereto or any theft thereof, except to the extent caused by the
negligence or intentional acts of Landlord, its beneficiaries or their
respective agents, contractors, servants or employees, subject in all events,
however, to the provisions of Article 25. Subject to the provisions of Article
25 hereof, and except for the negligence or intentional acts of Landlord, its
beneficiaries or their respective agents, contractors, servants or employees,
Tenant shall protect, indemnify, defend and save Landlord, its beneficiaries and
their respective officers, directors, agents, beneficiaries, partners, and
employees harmless from and against any and all liabilities, damages, costs,
claims, obligations and expenses arising out of or in connection with Tenant's
use or occupancy of the Premises or Tenant's activities in or about the Building
or the Property, or arising out of (and to the extent caused by) any act or
negligence of Tenant or its agents, contractors, servants, employees or
invitees.
Subject to the provisions of Article 25 hereof, Landlord agrees that Tenant
and its officers, directors, agents and employees shall not be liable to
Landlord for any direct or indirect damage to the Building Systems or to person
or property sustained by Landlord or any other person, caused by any portion of
the Tenant Responsible Premises or any of Tenant's fixtures or equipment
becoming out of repair or due to the happening of any accident in or about the
Premises, except to the extent that any such damage is caused by the negligence
or intentional acts of Tenant or Tenant's agents, contractors, servants or
employees.
Subject to the provisions of Articles 9 and 25 hereof, and except for the
negligence or intentional acts of Tenant or Tenant's agents, contractors,
servants or employees, Landlord shall
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protect, indemnify, defend and save Tenant, its officers, directors, agents and
employees harmless from and against any and all liabilities, damages, costs,
claims, obligations and expenses arising out of or in connection with Landlord's
operation of the Building or Landlord's activities in or about the Building or
the Property other than the Premises or arising out of (and to the extent caused
by) any act or negligence of Landlord, its beneficiaries or their respective
agents, contractors, servants or employees.
12. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior written
consent of Landlord, (a) assign, convey, mortgage, pledge or otherwise transfer
this Lease, or any part thereof, or any interest hereunder; (b) permit any
assignment of this Lease, or any part thereof, by operation of law; (d) sublet
the Premises or any part thereof; or (d) permit the use of the Premises, or any
part thereof, by any parties other than Tenant, its agents and employees.
Tenant shall, by notice in writing, advise Landlord of its desire from, on and
after a stated date (which shall not be less than thirty (30) days after the
date of Tenant's notice), to assign this Lease, or any part thereof, or to
sublet any part or all of the Premises for the balance or any part of the Term.
Tenant's notice shall: state the name and address of the proposed assignee or
subtenant; provide financial information in reasonable detail concerning the
proposed assignee or Tenant's obligation to provide such additional information
concerning the financial condition of the proposed assignee or subtenant as may
be requested by Landlord); include all of the material terms of the proposed
assignment or sublease (whether contained in such assignment or sublease or in
separate agreements) and state the consideration therefor and financial aspects
thereof. In the event Tenant delivers such notice, Landlord shall have the
right, to be, exercised by giving written notice to Tenant within ten (10)
business days after receipt of Tenant's notice, to recapture the space described
in Tenant's notice and such recapture notice shall, if given, cancel and
terminate this Lease with respect to the space therein described as of the date
stated in Tenant's notice. If Tenant's notice shall cover all of the Premises,
and Landlord shall have exercised its foregoing recapture right, the Term of
this Lease shall expire and end on the date stated in Tenant's 'notice as fully
and completely as if that date had been herein definitely fixed for the
expiration of the Term. If, however, this Lease be canceled with respect to less
than the entire Premises, Base Rent and rent adjustments reserved herein shall
be adjusted on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, as described in this Lease, and this Lease as so amended shall
continue thereafter in full force and effect.
If Landlord, upon receiving Tenant's notice with respect to any such space,
shall not exercise its right to recapture as aforesaid, and if Tenant is not in
default under the terms of this Lease, Landlord will not unreasonably withhold
its consent to Tenant's assignment of the Lease or subletting such space to the
party identified in Tenant's notice and upon the terms set forth ,in Tenant's
notice, provided, however, that in the event Landlord consents to any such
assignment or subletting, and as a condition thereto, Tenant shall pay to
Landlord fifty per cent (50%) of all profit derived by Tenant from such
assignment or subletting. For purposes of the foregoing,
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profit shall be deemed to include, but shall not be limited to, the amount paid
or payable to Tenant or any other party to effect or to induce Tenant or any
third party to enter into any such transaction, and the amount of all rent and
other consideration of whatever nature payable by such assignee or sublessee or
a third party in excess of the Base Rent and rent adjustments payable by Tenant
under this Lease, after deducting therefrom Tenant's reasonable expenses
incurred in connection with such sublease or assignment, including advertising
expenses, brokerage commissions, rent concessions, tenant improvement
allowances, other financial concessions, and legal fees. If a part of the
consideration for such assignment or subletting shall be payable other than in
cash, the payment to Landlord of its. share of such non-cash consideration shall
be in such form as is reasonably satisfactory to Landlord.
Tenant shall and hereby agrees that it will furnish to Landlord upon request
from Landlord a complete statement, certified by an officer of Tenant
responsible for such information, setting forth in detail the computation of all
profit derived and to be derived from such assignment or subletting, such
computation to be made in accordance with generally accepted accounting
principles. Tenant agrees that Landlord or its authorized representatives shall
be given access at all reasonable times upon prior notice to Tenant to the
books, records and papers of Tenant relating to revenue, expenses and the
computation of profit with respect to any such assignment or subletting, and
Landlord shall have the right to make copies thereof. The percentage of profit
due Landlord hereunder shall be paid to Landlord within thirty (30) days of
receipt of each payment of profit made from time to time by such assignee or
sublessee to Tenant.
Landlord's consent to any assignment or sublease shall not operate as a
consent to any subsequent assignment or sublease or as a waiver of Landlord's
right to require Tenant to seek Landlord's approval of all subsequent
assignments and subleases. Any subletting or assignment hereunder shall not
release or discharge Tenant of or from any liability, whether past, present or
future, under this Lease, and Tenant shall continue fully liable hereunder. Any
subtenant or assignee shall agree in a form reasonably satisfactory to Landlord
to comply with and be bound by all of the terms, covenants, conditions,
provisions and agreements of this Lease to the extent of the space sublet or
assigned, and Tenant shall deliver to Landlord promptly within twenty (20) days
after execution, a fully executed copy of each such sublease or assignment and
all other agreements related thereto and an agreement of compliance by each such
subtenant or assignee. Tenant agrees to pay to Landlord, on demand, all
reasonable costs incurred by Landlord (including reasonable fees paid to
attorneys) in connection with any request by Tenant for Landlord to consent to
any assignment or subletting by Tenant. Any sale, assignment, mortgage,
transfer, or subletting of this Lease which is not in compliance with the
provisions of this Article shall be of no effect and void. Notwithstanding any
requirement for Landlord to consider, solicit or obtain a sublease or
assignment, whether statutory or otherwise, Landlord and Tenant expressly agree
that Landlord's obligation with respect to such sublease or assignment shall
arise only when Tenant submits such sublease or assignment to Landlord in the
manner set out in this Article 12.
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For purposes of the foregoing, (a) if Tenant is a partnership, any change
in the partners of Tenant resulting in a change in the control of such
Partnership, or (b) if Tenant is a corporation the voting stock of which is not
listed on a nationally recognized security exchange or the National Association
for Securities Dealers Automated Quotations (NASDAQ) or its equivalent, any
transfer of any or all of the shares of stock of Tenant by sale, assignment,
operation of law or otherwise resulting in a change in the present control of
such corporation, or (c) the transfer of all or substantially all of the assets
of Tenant, shall be deemed to be an assignment within the meaning of this
Article 12.
Notwithstanding anything set forth above to the contrary, Tenant shall have
the right without the prior consent of Landlord, except as provided below, to
assign this Lease or sublet the Premises or any part thereof to any Successor or
Affiliate, as hereinafter defined, of Tenant, or to effect a transfer of
ownership, control or assets of Tenant to a Successor or Affiliate of Tenant, on
the following conditions: (a) Tenant shall notify Landlord in writing of such
assignment, subletting or transfer not less than thirty. (30) days prior to the
effective date thereof, and furnish to Landlord such information (including the
most recent financial statement) regarding the identity, business, reputation
and financial condition of such Affiliate or Successor as Landlord may
reasonably require; (b) Tenant shall deliver to Landlord evidence reasonably
satisfactory to Landlord that such Affiliate or Successor satisfies the
requirements of this grammatical paragraph of Article 12; (c) in the case of any
assignment (other than a deemed assignment by transfer of ownership, control or
assets of Tenant) or any subletting, Tenant shall deliver to Landlord copies of
all operative documents effecting such assignment or subletting, which documents
shall be subject to Landlord's reasonable approval; and in the case of a deemed
assignment by transfer of ownership, control or assets of Tenant, Tenant shall
deliver to Landlord an executed copy of an agreement in form reasonably
satisfactory to Landlord by which such transferee Affiliate or Successor has
agreed to comply with, be bound by, and assume all of the terms, covenants,
conditions and provisions of this Lease; (d) any such subletting, assignment or
transfer shall not release or discharge Tenant of or from any liability, whether
past, present or future, under this Lease and Tenant shall continue fully liable
hereunder; and (e) the creditworthiness of such Successor or Affiliate shall be
reasonably acceptable to Landlord. "Successor" is defined as any corporation or
entity resulting from a merger or consolidation with Tenant or any corporation
or entity succeeding to substantially all of the business and assets of Tenant;
and "Affiliate" is defined as any corporation that through one or more -
intermediaries, controls or is controlled by, or is under common control with,
Tenant ("control" meaning the possession of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract or otherwise) if, after giving
effect to any such assignment, subletting or transfer to a Successor or
Affiliate and any merger, consolidation, reorganization or transfer of
assets in connection therewith, the aggregate net worth of the assigning Tenant
(remaining liable on the Lease) and
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the assignee, sublessee or transferee would not be substantially the same as or
greater than the net worth of the Tenant (and any Affiliate or Successor
previously liable on the Lease) immediately prior to such assignment, sublease
or transfer (and any merger, consolidation, reorganization or transfer of assets
in connection therewith), then Landlord shall not be deemed to be acting
unreasonably in determining the creditworthiness of the Successor or Affiliate
not to be acceptable.
Notwithstanding anything to the contrary contained in this Article 12,
Tenant shall have the right, without the consent of Landlord, to enter into
license agreements (a "License") permitting the licensees to enter the Premises
and use Tenant's telephone and computer systems in the Premises provided (i)
Tenant gives Landlord reasonable advance notice of any such License with such
information as Landlord may reasonably request, including, without limitation, a
copy of the license agreement, (ii) Tenant shall not be in default under this
Lease at the time such License is granted, (iii) the spaces subject to the
License shall be operated by the licensee under the control of Tenant; however,
the licensee shall not be required to assume Tenant's obligations under this
Lease but shall be subject to, agree to be bound by and shall use and occupy the
Premises in accordance with all of the terms, covenants and conditions of this
Lease, (iv) such Licenses shall permit the use of the Premises only for limited
hours and shall be of limited duration and the aggregate source subject to all
such Licenses shall not exceed twenty-five percent (25%) of the Premises demised
hereunder from time to time, (v) no licensee may use the name or address of or
otherwise identify the Property or the Building in connection with its
activities, and (vi) any such licensee shall have in effect at all times any
necessary permits or licenses for its activities or business and the use of the
Premises by such licensee shall not impair the reputation or character of the
Building as a first class building.
13. EXPENSES OF ENFORCEMENT. Tenant shall pay all reasonable attorneys,
fees and expenses of Landlord incurred in successfully enforcing any of the
obligations of Tenant under this Lease.
Landlord shall pay all reasonable attorneys, fees and expenses of Tenant
incurred in successfully enforcing any of the obligations of Landlord under this
Lease.
14. LANDLORD'S LIEN. Landlord shall have a first lien upon any and all
rents from permitted subtenants or assignees of Tenant (if any) and upon the
interest of Tenant under this Lease to secure the payment of all money due under
this Lease.
15. LANDLORD'S REMEDIES. If default shall be made in the payment of the
rent or any installment thereof or in the payment of any other sum required to
be paid by Tenant under this Lease, or under the terms of any other lease or
agreement between Landlord and Tenant, and such default shall continue for ten
(10) days after written notice to Tenant or if default shall be made in the
performance of any of the other covenants or conditions which Tenant is required
to observe and perform hereunder or under any other lease or agreement
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between Landlord and Tenant and such default shall continue for thirty (30) days
after written notice to Tenant (or if any such default not involving a hazardous
or dangerous condition and not involving Tenant's failure to comply with the
provisions of Article 25 hereof cannot be cured within such 30-day period, so
long as Tenant has promptly commenced to cure such default during such initial
30-day period and thereafter diligently pursues such cure to completion within a
reasonable period of time and in all events within an additional sixty (60) days
after the expiration of said 30-day period) or if the interest of Tenant in this
Lease shall be levied on under execution or other legal process (and such 'levy
is not dismissed within sixty (60) days), or if any petition shall be filed by
or against Tenant to declare Tenant a bankrupt (and is not dismissed within
sixty (60) days) or to delay, reduce or modify Tenant's debts or obligations or
if any petition shall be filed or other action taken to reorganize or modify
Tenant's capital structure, if Tenant be a corporation or other entity, or if
Tenant be declared insolvent according to law or if any assignment of Tenant's
property shall be made for the benefit of creditors or a receiver or trustee is
appointed for Tenant or its property if Tenant shall abandon or vacate the
Premises during the Term this Lease for a period exceeding fifteen (15)
consecutive days, then Landlord may treat the occurrence of any one or more of
the foregoing events as a breach of this Lease, and thereupon at its option may,
without further notice or further demand of any kind to Tenant or any other
person, have any one or more of the following described remedies in addition to
all other rights and remedies provided at law or in equity:
(a) Landlord may terminate this Lease and the Term created hereby, in
which event Landlord may forthwith repossess the Premises by forcible entry and
detainer suit or otherwise and be entitled to recover forthwith as damages a sum
of money equal to the present value of the rent provided to be paid by Tenant
for the balance of the stated Term of the Lease, less the present value of the
fair rental value of the Premises for such period, and any other sum of money
and damages owed by Tenant to Landlord.
(b) Landlord may terminate Tenant's right of possession and may repossess
the Premises by forcible entry and detainer suit, or otherwise, without further
demand or notice of any kind to Tenant and without terminating this Lease, in
which event Landlord shall reasonably attempt to mitigate its damages as
required by law. Landlord in such instances expressly reserves the right to
relet all or any part of the Premises for such rent and upon such terms as shall
be satisfactory to Landlord may terminate greater or Lesser than that remaining
under the Term of this Lease and the right to relet the Premises as a part of a
larger area and the right to change the character or use made of the Premises).
For the purpose of such reletting, Landlord may make such repairs, changes,
alterations or additions in or to the Premises as may be necessary or
convenient. If Landlord shall fail to relet the Premises, then Tenant shall pay
to Landlord as damages a sum equal to the amount of the rent reserved in this
Lease, for such period or periods. If the Premises are relet and a sufficient
sum shall not be realized from such reletting after paying all of the costs and
expenses of such repairs, changes, alterations and additions and the expense of
such reletting and the collection of the rent accruing therefrom, to
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satisfy the rent above provided to be paid, Tenant shall satisfy and pay any
such deficiency upon demand therefor from time to time; and Tenant agrees that
Landlord may file suit to recover any sums falling due under the terms of this
paragraph from time to time and that any suit or recovery of any portion due
Landlord hereunder shall be no defense to any subsequent action brought for any
amount not theretofore reduced to judgment in favor of Landlord.
(c) In addition to all other rights and remedies of Landlord hereunder or
at law, in the event of a default by Tenant which continues beyond any cure
period provided in this Article 15, Landlord shall be entitled to receive as
damages from Tenant (in addition to any other damages provided herein) an amount
equal to (i) the then unamortized Landlord's Contribution made available to
Tenant pursuant to Article 34 hereof, assuming amortization of such amount over
a period of 180 calendar months, commencing on the first full Lease Year, at a
level monthly payment with an interest factor equal to *** percent (***%) per
annum, plus (ii) any then unamortized Take-Down Improvement Allowance made
available to Tenant pursuant to Article 36 hereof, assuming amortization of such
amount over a period commencing on the date of disbursement thereof and ending
on the expiration of the initial Term hereof at a level monthly payment with an
interest factor equal to *** percent (***%) per annum; provided, however, in no
event shall the provisions of this subparagraph (c) permit Landlord to receive a
double recovery of any rent actually paid by Tenant.
16. SURRENDER OF POSSESSION. On or before the date this Lease and the Term
hereby created terminate, or on or before the date Tenant's right of possession
terminates, whether by lapse of time or at the option of Landlord, Tenant will:
(a) remove those alterations, improvements and additions installed by Tenant
which Tenant is required to remove pursuant to Article 8 hereof and restore the
Tenant Responsible Premises to the same condition they were in upon completion
of Tenant's Work (except for reasonable wear and tear and as otherwise provided
in Article 25 of this Lease) and repair any damage to the Tenant Responsible
Premises or the Building caused by Tenant's removal of such alterations,
improvements or additions; (b) remove from the Premises and the Building all of
Tenant's trade fixtures and personal property; and (c) surrender possession of
the Premises to Landlord. If Tenant shall fail or refuse to restore the Premises
to the above described condition on or before the above-specified date, Landlord
may upon notice to Tenant enter into and upon the Premises and put the Premises
in such condition, and recover from Tenant Landlord's cost of so doing. If
Tenant shall fail or refuse to comply with Tenant's duty to remove all trade
fixtures and personal property from the Premises and the Building on or before
the above-specified date, the parties hereto agree and stipulate that Landlord
may, as its election: (1) treat such failure or refusal as an offer by Tenant to
transfer title to such trade fixtures and personal property to Landlord, in
which event title hereto shall thereupon pass under this Lease as a bill of sale
to and vest in Landlord absolutely without any cost either by set-off, credit
allowance or otherwise, and Landlord may remove, sell, retain,
_____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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donate, destroy, store, discard, or otherwise dispose of all or any part of said
personal property in any manner that Landlord shall choose; or (2) treat such
failure or refusal as conclusive evidence, on which Landlord and any third party
shall be entitled absolutely to rely and act, that Tenant has forever abandoned
such trade fixtures and personal property, and without accepting title thereto,
Landlord may at Tenant's expense enter into and upon the Premises and remove,
sell, retain, donate, destroy, store, discard or otherwise dispose of all or any
part thereof in any manner that Landlord shall choose without incurring
liability to Tenant or to any other person. In no event shall Landlord ever
become or accept or be charged with the duties of a bailee (either voluntary or
involuntary) of any personal property or trade fixtures; and the failure of
Tenant to remove all personal property and trade fixtures from the Premises and
the Building shall forever bar Tenant from bringing any action or from asserting
any liability against Landlord with respect to any such property which Tenant
fails to remove. If Tenant shall fail or refuse to surrender possession of the
Premises to Landlord on or before the above-specified date, Landlord may
forthwith re-enter the Premises and repossess itself thereof as of its former
state and remove all persons and effects therefrom, using such force as may be
necessary, without being guilty of any manner of trespass or forcible entry or
detainer.
17. HOLDOVER. Tenant will pay to Landlord an amount equal to *** percent
(***%) the sum of the annual Base Rent plus *** percent (***%) of rent
adjustments for all the time Tenant shall retain possession of the Premises or
any part thereof after the termination of this Lease, whether by lapse of time
or otherwise, and, in addition thereto, all damages, whether direct or
consequential, sustained by Landlord on account of or as result of any such
holdover extending for more than twenty (20) days, but the provisions of this
Article shall not operate as a waiver by the Landlord of any right of re-entry
hereinbefore provided. Landlord agrees that, upon receipt of written request
from Tenant during the last thirty (30) days of the Term, Landlord will use
reasonable efforts to estimate the nature and scope of the damages that Landlord
would anticipate incurring if Tenant failed to vacate the Premises promptly upon
expiration of the Term of this Lease. At the option of Landlord, expressed in a
written notice to Tenant and not otherwise, any holding over by Tenant extending
more than twenty (20) days beyond the termination of this Lease for any portion
of a calendar month shall constitute a holding over and extension of this Lease
for such entire calendar month at a rental equal to the greater of the holdover
rental specified above in this Article 17 or the then prevailing rental rates
for similar space in the Building.
18. [Intentionally Omitted.]
19. NOTICE. In every case where it shall be necessary or desirable for
Tenant to give or serve upon Landlord any notice or demand,. Tenant shall give
the requisite notice either (a) by delivering or causing to be delivered to
Landlord a written or printed copy of such notice or
___________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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demand, or (b) by sending a written or printed copy of such notice or demand by
either (i) Federal. Express or similar commercial overnight delivery service, or
(ii) certified or registered mail-, return receipt requested, postage prepaid,
addressed to Landlord at:
Merchandise Mart Properties, Inc.
222 The Merchandise Mart, Suite 470
Chicago, Illinois 60654
Attention: President
with a copy to:
Merchandise Mart Properties, Inc.
222 The Merchandise Mart, Suite 470
Chicago, Illinois 60654
Attention: Legal Department
In every case where under the provisions of this Lease it shall be
necessary or desirable for Landlord to give or serve upon Tenant any notice or
demand it shall be sufficient either (a) to deliver or cause to be delivered to
Tenant a written or printed copy of such notice or demand, or (b) to send a
written or printed copy of said notice or demand by either (i) Federal Express
or similar commercial overnight delivery service, or (ii) certified or
registered mail, return receipt requested, postage prepaid, addressed to Tenant,
at:
21st Century Cable TV, Inc. 350 N
Orleans Street 6th Floor
Chicago, Illinois 60654
Attention: Manager of Purchasing and Contracts
with a copy of default notices to:
Neal, Gerber & Eisenberg
Two North LaSalle Street
Suite 2100
Chicago, Illinois 60602
Attention: Susan R. Proffitt
Prior to commencement of the Term hereof and Tenant's occupancy of the
Temporary Source (see Article 39), any notices which may be necessary or
desirable for Landlord to give or serve upon Tenant shall be addressed to Tenant
at 455 North Cityfront Plaza Drive, Suite 2950, Chicago, Illinois 60611, and
addressed to the attention of those corporate titles set forth above.
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Any such notice served upon Landlord or Tenant in accordance with the
foregoing shall be deemed served effective upon receipt or upon refusal to
accept delivery. Landlord and Tenant may designate alternative or additional
addressees and addresses for notice by delivery of notice in accordance with the
provisions of this Article 19; provided that the number of addressees/addresses
to which notices to either party must be sent shall not exceed three (3).
20. NO SOLICITATION. Tenant shall not by itself or through any officer,
salesman, employee, agent, advertisement or otherwise solicit business in the
vestibules, entrances, elevator lobbies, corridors, hallways, elevators or other
common areas of the Building.
21. CONDEMNATION. If the whole or any substantial part of the Premises or
Building shall be taken or condemned by any competent authority for any public
use or purpose or if any adjacent property or street shall be condemned or
improved in such manner as to require the use of a substantial part of the
Premises or the Building, the Term of this Lease, at the option of Landlord,
shall end upon -the- date when the possession of the part so taken shall be
required for such use or purpose and Landlord shall be entitled to receive the
entire award, if any, without any payment to Tenant. Current rent shall be
apportioned as of the date of such termination. Notwithstanding the foregoing,
Tenant may, to the extent permitted by law, seek a separate award in a separate
proceeding for the value of Tenant Responsible Premises and its trade fixtures
and other personal property and moving and relocation expenses, so long as
Tenant does not materially interfere with the proceedings being conducted by
Landlord or otherwise reduce the award to which Landlord is entitled.
22. NONWAIVER. No waiver of any condition expressed in this Lease shall
be implied by any neglect of Landlord or Tenant to enforce any remedy on account
of the violation of such condition if such violation be continued or repeated
subsequently, and no express waiver shall affect any condition other than the
one specified in such waiver and that one only for the time and in the manner
specifically stated. The receipt and acceptance by Landlord or Tenant of a sum
of money which is less than the amount due and owing shall not, regardless of
any endorsements or instructions to the contrary, constitute an accord and
satisfaction. No receipt of moneys by Landlord from Tenant after the termination
in any way of the Term hereof or of Tenant's right of possession hereunder or
after the giving of any notice shall, reinstate, continue or extend the Term or
affect any notice given to Tenant prior to the receipt of such moneys, it being
agreed that after the service of notice or the commencement of a suit or after
final judgment for possession of the Premises Landlord may receive and collect
any rent due, and the payment of such rent shall not waive or affect such
notice, suit or judgment.
23. WAIVER OF NOTICE. To the extent that the notice provided in Article
15 hereof satisfies the requirements, if any, for service of notice or demand
prescribed by any
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applicable statute or law, Tenant hereby expressly waives the service of any
other notice of intention to terminate this Lease or to re-enter the Premises
and waives the service of any demand for payment of rent or for possession and
waives the service of any other notice or demand prescribed by any statute or
other law.
24. FIRE OR CASUALTY. If the Premises or any part of the Building shall
be damaged by fire or other casualty and if such damage does not render all or a
substantial portion of the Premises or the 'Building untenantable (and for
purposes of this Article 24, the Premises shall be deemed untenantable if there
is (i) a substantial impairment of the reasonable means of access thereto or
(ii) substantial impairment of reasonable means of access to the Antennae on the
Roof or damage to a substantial portion of the Antennae on the Roof which
materially adversely impairs Tenant Is ability to conduct business in the
Premises), then Landlord shall proceed to repair and restore the Building
Systems (including the Building Systems in the Premises) and the reasonable
means of access to the Premises with reasonable promptness, given the nature of
the damage to be repaired, subject to reasonable delays for insurance
adjustments and delays caused by matters beyond Landlord's control. If any such
damage renders all or a substantial portion of the Premises or the Building
untenantable, Landlord shall, with reasonable promptness after the occurrence of
such damage, but in all events within forty-five (45) days after such damage
occurred, obtain, at no cost to Tenant, an opinion of an independent architect,
engineer or other qualified licensed professional, estimating the length of time
will be required to complete the repair and restoration of the Building Systems
(including the reasonable means of access to the Premises) and the Tenant
Responsible Premises (stating separate estimated time periods for the repair and
restoration of the Building Systems, including those in the Premises, and the
repair and restoration of the Tenant Responsible Premises) and by written notice
advise Tenant of such estimate (such notice being referred to herein as the
"Repair Estimate Notice"). If it is so estimated that the amount of time
required to substantially complete such repair and restoration of both the
Building Systems (including those in the Premises and the reasonable means of
access to the Premises) and the Tenant Responsible Premises will exceed one
hundred eighty (180) days, then either Landlord or Tenant (but as to Tenant,
only if all or a substantial portion of the Premises are rendered untenantable)
shall have the right to terminate this Lease as of the date of such damage upon
giving notice to the other at any time within twenty (20) days after Landlord
delivers the Repair Estimate Notice to Tenant (it being understood that Landlord
may, if it elects to do so, also give such notice of termination together with
the Repair Estimate Notice). Notwithstanding the foregoing, if such damage
renders untenantable a substantial portion of the Building but does not render
untenantable a substantial portion of the Premises, Landlord shall not have the
right to terminate this Lease on account of such damage, unless Landlord elects
generally to terminate all leases in the Building which Landlord is entitled to
terminate on account of such damage or Landlord elects to demolish all or a
substantial portion of the Building, and any such termination of this Lease
shall be effective as of a date, specified by Landlord, not less than sixty (60)
days after the delivery of such termination notice.
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Unless this Lease is terminated as provided in the preceding paragraph, Landlord
shall proceed with reasonable promptness to repair and restore the Building
Systems, including Building Systems in the Premises and the reasonable means of
access to the Premises, subject to reasonable delays for insurance adjustments
and delays caused by matters beyond Landlord's reasonable control, and also
subject to zoning laws and applicable building codes then in effect. when the
repair and restoration of the Building Systems is completed to a degree making
the Premises suitably available for Tenant's repair and restoration of the
Tenant Responsible Premises, Tenant shall proceed with reasonable promptness to
repair and restore the Tenant Responsible Premises, subject to reasonable delays
for insurance adjustments and delays caused by matters beyond Tenant's
reasonable control and applicable building codes then in effect. Landlord shall
have no liability to Tenant, and Tenant shall not be entitled to terminate this
Lease (except as hereinafter provided) if such repair and restoration of the
Building Systems is not in fact completed within the time period specified in
the Repair Estimate Notice. If the Building Systems are not repaired and
restored by the number of days equal to one hundred fifty percent (150%.) of the
number of days specified in the Repair Estimate Notice for completion of the
repair and restoration of the Building Systems, measured from the date of
delivery of the Repair Estimate Notice (provided, however, such number of days
may be extended up to an additional one hundred twenty (120) days due to Force
Majeure events), then either party (but as to Landlord, only if Landlord has
diligently commenced and pursued such repair and restoration) may terminate this
Lease, effective as of the date of such fire or other casualty, by written
notice to the other party delivered not later than thirty (30) days after the
expiration of said period but prior to substantial completion of such repair or
restoration.
Notwithstanding anything to the contrary herein set forth, (a) Landlord
shall have obligation, to repair or restore any of the Tenant Responsible
Premises or Tenant's office furniture, trade fixtures, office equipment,
merchandise or any other items of Tenant's property in the Premises or the
Building; (b) if any such damage rendering all or a substantial portion of the
Premises or the Building untenantable shall occur during the last one (1) year
of the Term and provided Tenant has not delivered a binding notice under Article
37 to extend the Term of this Lease beyond the then current Term (or Extended
Term), each of Landlord and Tenant shall have the option to terminate this
Lease by giving written notice to the other within sixty (60) days after the
date such damage occurred, and if such option is so exercised, this Lease shall
terminate as of a date not less than sixty (60) days after the delivery of such
notice; and (c) Landlord shall have the right -to terminate this Lease by giving
written notice to Tenant within sixty (60) days of the date such damage occurred
if Landlord elects to terminate all tenant leases in the Building which Landlord
is entitled to terminate on account of such damage or to demolish the Building,
and if such right is so exercised, this Lease shall terminate as of a date,
specified by Landlord, not less than sixty (60) days after the delivery of such
notice.
In the event any such fire or casualty damage renders the Premises or any
part thereof untenantable and if this Lease shall not be terminated pursuant to
the foregoing provisions of,
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this Article 24 by reason of such damage, then all rent (including, without
limitation, Base Rent and rent adjustments) payable pursuant to this Lease with
respect to the Premises or such portion so rendered untenantable shall abate
during the period beginning with the date of such damage and ending with the
date that Tenant substantially completes the repair and restoration of the
Tenant Responsible Premises (or such portion rendered untenantable) or commences
substantial use of the Premises (or such portion rendered untenantable) for the
conduct of its business, whichever is earlier, but in all events not later than
the number of days equal to one hundred fifty percent (150%) of the number of
days specified in the Repair Estimate Notice for completion of the repair and
restoration of the Tenant Responsible Premises, measured from the date that the
Building Systems are repaired and restored to a degree making the Premises
suitably available for Tenant to commence and continue without unreasonable
interruption Tenant's repair and restoration of the Tenant Responsible Premises,
provided, however, such number of days may be extended up to an additional one
hundred-twenty (120) days due to Force Majeure events. Such abatement shall be
in an amount bearing the same ratio to the total amount of all rent (including
rent adjustments) payable pursuant to this Lease for such period as the portion
of the Premises rendered and remaining untenantable due to such fire or casualty
from time to time bears to the entire Premises. In the event of termination of
this Lease pursuant to this Article 24, all rent (including, without limitation,
Base Rent and rent adjustments) payable pursuant to this Lease (to the extent
not abated pursuant to the foregoing) shall be apportioned on a per diem basis
and be paid to the date of termination.
25. INSURANCE. In consideration of the leasing of the Premises at the
rental stated in Articles 3 and 4, Landlord and Tenant agree to provide
insurance and allocate the risk of loss as follows:
Tenant, at its sole cost and expense, agrees to purchase and keep in
force and effect during the Term hereof (a) Property Insurance on the Tenant
Responsible Premises and Tenant's contents, furniture, fixtures, equipment and
other personal property located in the Building, covering the interests of
Landlord and Tenant as to damage or other 'loss caused by those perils
customarily covered by an all risk policy, and in any event including without
limitation, fire or other casualty, vandalism, theft, sprinkler leakage, water
damage (however caused), explosion, malfunction and failures of heating and
cooling or similar apparatus, perils covered by extended coverage, and other
similar perils in amounts not less than the full insurable replacement value of
such property with a deductible amount in a commercially reasonable amount,
taking into account the financial condition of Tenant, and (b) broad form
Commercial General Liability Insurance, including blanket contractual liability,
host liquor liability (if alcoholic liquor within the meaning of the Illinois
Liquor Control Act will be given to guests), personal injury liability, and
broad form property damage liability coverages, with limits of not less than
*** for personal injury, bodily injury, sickness, disease or death or for damage
or injury
___________________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
to or destruction of property (including the loss of use thereof) for any one
occurrence. Tenant's Property Insurance policy shall provide that it is specific
and not contributory and shall contain a clause pursuant to which the insurance
carrier waives all rights of subrogation against Landlord and Landlord's-
beneficiary, and its partners, trustees, officers, directors, agents and
employees with respect to losses payable under such policy; and Tenant agrees to
indemnify Landlord and Landlord's beneficiary, and its partners, trustees,
officers, directors, agents and employees against all liabilities, damages,
costs, claims, obligations and expenses (including attorneys, fees) arising from
any failure of Tenant's Property Insurance policy to contain such a waiver of
subrogation. If the potential for host liquor liability shall arise due to
Tenant's activities pursuant to Article 2 of this Lease, the Tenant shall
procure and maintain a policy, or endorsement for, liability insurance before
undertaking such activities. Tenant's Commercial General Liability Policy and,
if required, its host liquor liability policy or endorsement, shall each name
Landlord, its beneficiaries, and their respective officers, directors,
beneficiaries, partners, agents, and employees as additional insureds. All such
insurance shall be provided by commercial insurers of recognized responsibility.
Landlord agrees to purchase and keep in force and effect insurance on the
Building and Building Systems against fire and such other risks as may be
included in extended coverage insurance from time to time available on a
replacement value basis in an amount sufficient to prevent Landlord from
becoming a coinsurer under the terms of the applicable policies and shall
contain a clause pursuant to which the insurance carriers waive all rights of
subrogation against the Tenant, its agents, officers, directors and employees,
with respect to losses payable under such policies.
Tenant shall, from time to time upon request from Landlord but not more
frequently than once each calendar year (except in the case of any change in
coverage or any change in insurer, in any of which events Tenant agrees to
provide Landlord written notice of such change within thirty (30) days of its
occurrence) ,deliver to Landlord certificates of insurance evidencing the
insurance coverage required by this Article 25, with a notation on such
certificates as to the waiver of subrogation provided above.
By this Article, Landlord and Tenant intend that the risk of loss or damage
to property (including personal property and equipment used in connection with
the Building and also including any automobile or other vehicles from time to
time parked in any parking spaces which Landlord may from time to time lease to
Tenant), as described above be borne by responsible insurance carriers to the
'extent above provided and' Landlord and Tenant hereby release each other and
agree to look solely to, and seek recovery only from, their respective insurance
carriers in the event of a loss of a type described above to the extent that
such coverage is agreed to be provided hereunder. For this purpose any
applicable deductible amount shall be treated as though it were recoverable
under such policies. Landlord and Tenant agree that applicable portions of all
moneys collected from such insurance shall be used toward full compliance with
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the obligations of Landlord and Tenant under this Lease in connection with
damage resulting from fire or other casualty.
26. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord shall have the following
rights, exercisable without notice, except as otherwise stated, and without
liability to Tenant for damages or injury to property, person or business and
without effecting an eviction, constructive or actual, or disturbance of
Tenant's use or possession or giving rise to any claim for set-off or abatement
except as otherwise expressly provided herein:
(A) To change the Building's name or street address. Landlord agrees to
give Tenant one hundred eighty (180) days prior notice of such change of street
address (except where Landlord is required to change the street address by any
governmental authority).
(B) To install, affix and maintain any and all signs on the exterior and
interior of the Building.
(C) To designate and approve, prior to installation by Tenant, all types
of window shades, blinds, drapes, awnings, window ventilators and other similar
equipment, and to reasonably control all internal lighting that may be visible
from the exterior of the Building so as to promote the uniformity or harmony of
appearance of the exterior of the Building.
(D) Except as provided otherwise in this Lease, to reserve to Landlord the
exclusive right to designate, limit, restrict and control any business or any
service in or to the Building.
(E) To grant to anyone the exclusive right to conduct any business or
render any service in or to the Building, provided such exclusive right shall
not operate to exclude Tenant from the use expressly permitted herein or
increase the costs therefor to Tenant, and the rates charged by any such vendor
shall be competitive market rates.
(F) To impose reasonable rules and regulations regarding the placing of
vending or dispensing machines of any kind in or about the Premises without the
prior written permission of Landlord.
(G) To show the Premises to prospective tenants at reasonable hours by
appointment during the last nine (9) months of the Term, as it may be extended.
(H) To reasonably approve the weight, size and location of safes and other
heavy equipment and bulky articles in and about the Premises and the Building
(so as not to exceed the legal live load), and to require all such items and
furniture and similar items to be moved into and out of the Building and
Premises only at such times and in such manner as Landlord shall reasonably
direct in writing. Subject to the provisions of Articles 11 and 25, any damages
done
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to the Building or to other tenants in the Building by taking in or taking out
safes, furniture, and other articles or from overloading the floor in any way
shall be paid by Tenant. Furniture, boxes, merchandise or other bulky articles
shall be transported within the Building only upon or by vehicles equipped with
rubber tires and shall be carried only in a freight elevator when such service
is available. Movements of Tenant's property into or out of the Building and
within the Building are entirely at the risk and responsibility of Tenant and
Landlord reserves the right to require registration before allowing any such
property to be moved into or out of the Building. Landlord reserves the right to
reasonably regulate the movement of, and to inspect, all property and packages
brought into or out of the Building to enforce compliance with the terms of this
Lease and to reasonably regulate delivery and service of supplies and the usage
of loading docks, receiving areas and freight elevators. Landlord shall not
discriminate against Tenant in its right to use such loading docks, receiving
areas and freight elevators in conjunction with other tenants.
(I) To have access for Landlord to any mail chutes located on the Premises
according to the rules of the United States Postal Service.
(J) To close the Building after regular working hours and on Saturdays,
Sundays and holidays established by Landlord (subject to the limitations set
forth herein) from time to time subject, however, to Tenant's right to
admittance under such reasonable regulations as Landlord may prescribe from time
to time, which may include, by way of example but not of limitation, that
persons entering or leaving the Building identify themselves to a security
officer by registration or otherwise and that said persons comply with
Landlord's regulations concerning their and leaving the Building (Landlord
agrees to furnish to Tenant prior notice in the case of any scheduled Building
shutdown when Tenant shall not be able to gain access to the Premises provided
such notice shall not limit or affect any rights granted to Tenant in Article 9
hereof).
(K) To change the arrangement, configuration, size or location of
entrances, passageways, doors and doorways, corridors, stairs, toilets,
elevators and escalators and other public service portions of the Building and
the Property not contained within the Premises or any part thereof, so long as
Landlord uses reasonable efforts to give Tenant prior notice in the event of any
changes to common areas of the Building directly and materially serving the
Premises or the Antennae on the Roof and so long as any such change does not
materially and adversely affect Tenant's ability to conduct its business in the
Premises or Tenant's access to the Premises or access to the Antennae on the
Roof.
(L) To change the character or use of any part of the Building or the
Property.
(M) Subject to the rights granted Tenant in Article 40 hereof, to use for
itself the roof, the exterior portions of the Premises and such areas within the
Premises (so long as the useable area of the Premises is not materially reduced)
required for structural columns and their enclosures and the installation of
utility lines, Building systems and other installations required
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to service the Building, the Property or tenants or occupants thereof and to
maintain and repair same, no rights being hereby conferred upon Tenant, and,
unless otherwise specifically provided herein, to exercise for itself any rights
to the land and improvements below the floor level of the Premises or the air
rights above the Premises and to the land and improvements located on and
within the public areas. Neither Tenant nor its employees, invitees, guests and
agents shall, without obtaining in each instance the prior written consent of
Landlord (which consent shall not be unreasonably withheld or delayed, and shall
be conditioned upon such requirements as Landlord deems appropriate) (1) go
above or through suspended ceilings, (2) remove any ceiling tiles or affix
anything thereto, remove anything therefrom or cut into or alter the same in any
way, (3) enter fan rooms or other mechanical spaces, or (4) open doors or remove
panels providing access to utility lines, Building systems or other
installations required to service tenants.
27. RULES AND REGULATIONS. Subject to the rights expressly granted to
Tenant elsewhere in this Lease, Tenant agrees to observe the reservations to
Landlord in Article 26 hereof and agrees to comply and to use reasonable
business efforts to have its employees, agents, and servants to observe and
comply, at all times, with the following rules and regulations and with such
reasonable modifications thereof and additions thereto as Landlord may make for
the Building (so long as Landlord has delivered to Tenant prior notice of any
such modifications and additions and that same are reasonable), and that failure
to observe and comply with such reservations, rules and regulations, after
written notice of such failure and an opportunity to cure as provided in Section
15 hereof, shall constitute a default under this Lease:
(A) No sign, picture, advertisement or notice, typewritten or otherwise,
shall be displayed, inscribed, painted or affixed on any part of the outside or
inside of the Building, or on or about the Premises in any location visible from
outside the Premises, except on glass of the doors and windows of the Premises
and on the directory board of the Building and then only of such nature, color,
size, style and material as shall be first approved by Landlord in writing,
which approval shall not be unreasonably withheld.
(B) Tenant shall not, without Landlord's prior written consent (which
consent shall not be unreasonably withheld), install or operate any heating
device or air conditioning equipment, steam or internal combustion engine,
boiler, stove, machinery, or mechanical devices upon the Premises (other than as
set forth in the final plans for Tenant's Work described in Article 35) or carry
on any mechanical or manufacturing business thereon, or use or permit to be
brought into the Building flammable fluids such as gasoline, kerosene, benzene,
or naphtha (except in such small quantities as customarily used by office
tenants for general office use in compliance with applicable legal requirements)
or use any illumination other than electric lights. All equipment, fixtures,
lamps and bulbs shall be compatible with, and not exceed the capacity of, the
Building's electrical system. No explosives, firearms, radioactive or toxic or
hazardous
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substances or materials, or other articles deemed extra hazardous to life, limb
or property shall be brought into the Building or the Premises.
(C) Any person or persons employed by Tenant to do janitor work or care
for the Premises shall be subject to and under the reasonable control and
direction of the building manager (in such manner and to such extent as
generally applicable to persons employed by Building tenants) while in the
Building and outside of the Premises, but not as agent of Landlord. Tenant shall
be responsible, at its sole cost and expense, for the removal of refuse and
rubbish from the Premises to the designated collection areas in the Building.
Such refuse and rubbish shall be stored and transported in containers reasonably
acceptable to Landlord and shall be deposited in locations acceptable to
Landlord and consistent with policies established by Landlord for the Building
generally.
(D) After completion of the Shell and Core Work, Tenant shall at its
expense provide artificial light for employees of Landlord while doing work and
making repairs or alterations in the Premises.
(E) The location and manner of installation of all telegraph, telephone,
communications, signal and electric connections, cabling and wiring (other than
connections, wiring or cabling located exclusively within the Premises and not
affecting the Building structure, Building Systems, common areas or other
tenants' premises) shall be subject to the reasonable approval of Landlord and
any work in connection therewith shall be subject to the direction of Landlord.
Tenant shall give Landlord reasonable prior notice of the installation of all
such telegraph, telephone, communication, signal and electric connections,
cabling and wiring whether or not Landlord's approval thereto and direction
thereof is required. Landlord reserves the right to control the entity or
entities providing telephone wire installation, repair and maintenance in the
Building to the Building telephone closets on the various floors and to
reasonably restrict and control access to such Building telephone closets.
Tenant may select the vendor or vendors and service providers with respect to
the installation, repair and maintenance of other communication and signal
cabling and wiring subject to the general direction of Landlord and such
reasonable rules and regulations as may be established by Landlord for the
protection of the Building and its efficient, high-quality and harmonious
operation.
(F) Tenant must list all furniture and fixtures to be taken from the
Building at any time and from time to time prior to the expiration of the Term
hereof upon a form furnished by Landlord. Such list shall be presented at the
office of the Building for registration (or if closed, to the security officer)
before acceptance by the security officer or elevator operator.
(G) Tenant, its licensees, agents, servants, and employees and guests
shall not encumber or obstruct sidewalks, entrances, passages, courts,
corridors, vestibules, halls, elevators, stairways or other common areas in or
about the Building.
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(H) No bicycle or other vehicle and no animal (except seeing eye dogs)
shall be allowed in the showrooms, offices, halls, corridors or any other parts
of the Building.
(I) Tenant shall not allow anything to be placed against or near the glass
in the partitions between the Premises and the halls or corridors of the
Building which shall diminish the light in the halls or corridors.
(J) Tenant shall not allow anything to be placed on the outer window
ledges of the Premises, nor shall anything be thrown by Tenant or its employees
out of the windows of the Building. Tenant shall keep all windows closed.
(K) No additional locks shall be placed upon any entry doors to the
Premises and no locks shall be changed without the prior written consent of
Landlord, which shall not be unreasonably withheld. Upon termination of this
Lease, Tenant shall surrender all keys and key cards of the Premises and of the
Building and give to Landlord the explanation of the combination of all locks on
safes or vault doors in the Premises.
(L) The building manager shall at all times keep a pass key and be allowed
admittance to the Premises to cover any emergency, fire or other casualty that
may arise and in other appropriate instances. Landlord and Landlord's agents
shall have the right to enter the Premises at all reasonable hours upon prior
notice (except in case of an emergency) to examine the same.
(M) Unless otherwise advised by Landlord, neither Tenant nor its employees
shall undertake to regulate the radiator controls or thermostats. Tenant shall
report to the office of the Building whenever such thermostats or radiator
controls are not working properly or satisfactorily.
(N) If Tenant desires shades or venetian blinds for outside windows, must
be furnished and installed at the expense of must be of Tenant, and must of such
type, color and material as may reasonably be prescribed by Landlord.
(O) Tenant assumes full responsibility for protecting its space from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry into the Premises closed and secured.
(P) Tenant shall not peddle, canvass, solicit or distribute handbills or
flyers on or about the Property except as specifically authorized by Landlord.
(Q) Tenant shall not sell food of any kind or cook in the Building, unless
in coffee-makers or microwave or similar ovens installed and maintained by
Tenant for use by its
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employees and invitees, and subject to any reasonable applicable Building rules
and regulations and all applicable laws. Tenant may serve complimentary foods to
its guests provided that it shall first comply with all applicable laws,
ordinances, codes and regulations.
(R) Water in the Premises shall not be wasted by Tenant or its employees
by tying or wedging back the faucets of the washbowls or otherwise.
(S) Tenant shall use neither the name of the Building (except as the
address of its business) nor pictures of the Building in advertising or other
publicity or for any other purpose without Landlord's prior written consent.
(T) In the event Tenant designates non-smoking areas in the Premises,
Tenant shall also designate sufficient smoking areas within the Premises for its
employees; and Tenant shall use all reasonable efforts, in dealing with its
employees, to cooperate with and enforce Landlord's policies prohibiting the use
of the public areas of the Building as smoking areas.
Landlord reserves the right upon prior notice to Tenant to make such other
and further reasonable rules and regulations as in Landlord's reasonable
judgment may from time to time be needed for the safety, care and cleanliness of
the Premises and the Building and for the preservation of good order therein so
long as such further rules and regulations do not diminish any rights heretofore
expressly granted to Tenant in this Lease. Landlord agrees that all such rules
and regulations shall be enforced in a manner that does not singularly target
Tenant and no other tenants similarly situated or engaged in conduct similar to
that of Tenant.
28. MISCELLANEOUS. Tenant and Landlord further covenant with each other
that:
(A) All rights and remedies of Landlord and Tenant under this Lease shall
be cumulative, and none shall exclude any other rights and remedies allowed by
law.
(B) The word "Tenant" wherever used herein shall be construed to mean
tenants in all cases where there is more than one tenant, and the necessary
grammatical changes required to make the provisions hereof apply either to
corporations or individuals, men or women, shall in all cases be assumed as
though in each case fully expressed. If there is more than one tenant, all
obligations and liabilities hereunder imposed upon Tenant shall be joint and
several.
(C) This Lease and the rights of Tenant hereunder shall be and are subject
and subordinate at all times to any ground leases or master leases and to the
lien of any mortgages or deeds of trust now or hereafter in force against the
Property or the Building, or both of them, and to all advances made or hereafter
to be made upon the security thereof, and to all renewals, modifications,
amendments, consolidations, replacements and extensions thereof. Any
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mortgagee or beneficiary under a deed of trust, however, may elect to have this
Lease be superior to its mortgage or deed of trust. This provision is self-
operative and no further instrument of subordination or priority shall be
required. In confirmation of such subordination or priority Tenant shall
promptly execute such further instruments as may be reasonably requested by
Landlord and in the event Tenant fails to do so within twenty (20) days after
demand in writing by certified or registered mail, Landlord shall deliver to
Tenant a further written request and if Tenant fails to execute and deliver such
instruments within five (5) business days after receipt of such further notice
from Landlord, such failure shall constitute a material default hereunder and
shall entitle Landlord to exercise the remedies provided by Article 15 hereof
(without any notice otherwise required by said Article 15). Notwithstanding the
foregoing, this Lease and the rights of Tenant hereunder shall not be subject or
subordinate to the lien of any mortgage or deed of trust imposed upon the
Property after the date hereof unless, as a condition thereto, such mortgagee or
holder shall deliver to Tenant a non-disturbance agreement in form and substance
reasonably satisfactory to Tenant.
(D) Each of the provisions of this Lease shall extend to and shall, as the
case may require, bind or inure to the benefit of, not only Landlord and Tenant,
but also their respective heirs, legal representatives, successors and assigns,
provided, this clause shall not permit any assignment contrary to the provisions
of Article 12 hereof.
(E) All of the representations and obligations of Landlord and Tenant are
contained herein and no modification, waiver or amendment of this Lease or any
of its conditions or provisions shall be binding upon Landlord unless in writing
signed by a duly authorized officer of Landlord's agent or upon Tenant unless in
writing and signed by a duly authorized officer of Tenant.
(F) All amounts due and payable from Tenant under this Lease or under any
work order or other agreement relating to the Premises shall be considered as
rent and, if unpaid when due, shall bear interest from such date until paid at
the maximum legal rate of interest available, provided such rate of interest
shall not exceed two percent (2%) per annum plus the Prime Rate as announced by
the Northern Trust Bank in Chicago, Illinois and in effect on the first day of
each calendar quarter, determined and subject to change as of the first day of
each calendar quarter.
(G) Submission of this instrument for examination shall not bind Landlord
or Tenant in any manner, and no lease or obligation on Landlord or Tenant shall
arise until this instrument is signed and delivered by Landlord and Tenant.
(H) Except as set forth in Article 40, no rights to light or air over any
property, whether belonging to Landlord or any other persons, are granted to
Tenant by this Lease.
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(I) The laws of the State of Illinois shall govern validity, performance
and enforcement of this Lease. The invalidity or unenforceability of any
provision of this Lease shall not affect or impair any other provision.
(J) Landlord's title is and always shall be paramount to the title of
Tenant. Nothing herein contained shall empower Tenant to commit or engage in
any act which can, shall or may encumber the title of Landlord.
(K) In case Landlord or any successor owner of the Property or the
Building shall convey or otherwise dispose of any portion thereof to another
person, such other person shall in its own name thereupon be and become Landlord
hereunder and shall assume fully in writing and be liable upon all liabilities
and obligations of this Lease to be performed by Landlord which first arise
after the date of conveyance, and such original Landlord or successor owner
shall, from and after the date of conveyance, be free of all liabilities and
obligations not then incurred.
(L) Neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall constitute a material breach of this Lease.
(M) Nothing contained in this Lease. shall be deemed or construed by the
parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venture or any association or relationship between
Landlord and Tenant other than that of landlord and tenant.
(N) Landlord shall have the right to apply payments received from Tenant
pursuant to this Lease (regardless of Tenant's designation of such payments) to
satisfy any obligations of Tenant hereunder, in such order and amounts as
Landlord in its reasonable discretion may elect.
(O) All indemnities, covenants and agreements of Landlord and Tenant,
respectively, contained herein which inure to the benefit of the other party
shall be construed to inure also to the benefit of the other party's officers,
directors, beneficiaries, partners, agents and employees.
(P) Unless otherwise notified in writing by Landlord, Tenant may rely upon
notices and directions from officers of Merchandise Mart Properties, Inc.,
Landlord's beneficiary's management agent for the Building and Property, as the
authorized action of Landlord.
29. ATTORNMENT. Upon request of the holder of any note secured by a
mortgage or deed of trust on the Building or Property, Tenant will agree in
writing that no action taken by such holder to enforce said mortgage or deed of
trust shall terminate this Lease or invalidate or constitute a breach of any of
the provisions hereof and Tenant will attorn to such mortgagee or
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holder, or to any purchaser of the Property or Building, at any foreclosure sale
or sale in lieu of foreclosure, for the balance of the Term of this Lease and on
all other terms and conditions herein set forth, provided that, in the case of
any mortgage or trust deed imposed upon the Property after the date hereof, as a
condition to such attornment by Tenant, such mortgagee or holder shall deliver a
Non-Disturbance Agreement to Tenant.
30. ESTOPPEL CERTIFICATE. Tenant agrees that from time to time (but not
more frequently than once each year and also upon commencement of the Term and
in connection with any sale or refinancing of the Building and upon any request
by Landlord's lender) upon not less than thirty (30) days' prior request by
Landlord, Tenant or Tenant's duly authorized representative having knowledge of
the following facts shall deliver to Landlord a statement in writing certifying
(a) that this Lease is unmodified and in full force and effect (or if there have
been modifications that the Lease as modified is in full force and effect); (b)
the dates to which Base Rent, rent adjustments and other sums payable under this
Lease have been paid; (c) that, to the best of Tenant's knowledge, neither
Landlord nor Tenant is in default under any provision of this Lease, or, if in
default, the nature thereof in reasonable detail; (d) that, to the best of
Tenant's knowledge, there are no offsets or defenses to the payment of Base
Rent, additional rent or any other sums payable under this Lease, or if there
are any such offsets or defenses, specifying such in reasonable detail; and (e)
such other matters relating to the status of the Lease as may be reasonably
requested. In the event Tenant fails to deliver such statement to Landlord
within such 30-day period, such failure, if not cured within an additional 15-
day period after delivery of written notice thereof, shall constitute a material
default hereunder and exercise the remedies provided by Article 15 hereof
(without any notice otherwise required by said Article 15).
Landlord agrees that from time to time upon not less than thirty (30) days
prior written request by Tenant (but not more frequently than once each year),
and upon not less than thirty (30) days prior written request by any approved
assignee or subtenant in connection with the execution and delivery of any
assignment or sublease, Landlord or Landlord's duly authorized representative
having knowledge of the following facts shall deliver to Tenant a statement in
writing certifying (a) that this Lease is unmodified and in full force and
effect (or if there have been modifications that the Lease, as modified, is in
full force and effect); (b) the dates to which the Base Rent, rent adjustments
and other sums payable under this Lease have been paid; (c) that to the best of
Landlord's knowledge, neither Landlord nor Tenant is in default under any
provision of this Lease, or, if in default, the nature thereof in reasonable
detail; and (d) such other matters relating to the status of the Lease as may be
reasonably requested.
31. BROKERS. Landlord and Tenant represent and warrant to the other that
neither it nor its officers or agents nor anyone acting on its behalf has dealt
with any real estate broker other than CB Commercial Real Estate Group, Inc. and
Chicago Realty Group, L.L.C. in the negotiation or making of this Lease, and
each agrees to indemnify and hold harmless the other
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from the claim or claims of any other broker or brokers claiming to have
interested Tenant in the Building or Premises or claiming to have caused Tenant
to enter into this Lease. Landlord shall be responsible for the commission or
other compensation of CB Commercial Real Estate Group, Inc. and Chicago Realty
Group, L.L.C. payable pursuant to separate agreements, if any, between Landlord
and such brokers.
32. SECURITY DEPOSIT. A. As security for the full and prompt performance
by Tenant of all of Tenant's obligations hereunder, Tenant has upon execution of
this Lease provided to Landlord and will during the Term of this Lease maintain
on deposit with Landlord, an unconditional irrevocable letter of credit in favor
of Merchandise Mart Properties, Inc., as agent of Landlord, from a bank approved
by Landlord, in the form attached hereto as Exhibit "E" (the "Letter of
Credit"), which provides for security in the initial amount of $***. Prior to
and as a condition to Landlord's obligation to pay any Take-Down Improvement
Allowance pursuant to Article 36 hereof, Tenant shall cause the amount of the
Letter of Credit to be increased by the amount of the Take-Down Improvement
Allowance to be paid by Landlord under Article 36 hereof. Commencing on the
first day of the Second Lease Year and on the first day of each successive Lease
Year thereafter, so long as Tenant is not in default-hereunder, the amount of
the Letter of Credit shall be automatically reduced for such Lease Year by the
amount necessary to result in the proportionate reduction (assuming a level
annual reduction) of the Letter of Credit over the remaining balance of the
Term. Tenant agrees that, in the event of any default by Tenant under this
Lease, Landlord shall have the right to draw down on the Letter of Credit in an
amount necessary to cure such default ("the Cure Amount") and Tenant agrees that
within ten (10) days after such initial draw of the Cure Amount Tenant shall
replenish the Cure Amount and shall cause the Letter of Credit to be amended in
a manner that it is restored to the full amount available thereunder prior to
such draw by Landlord. Tenant further agrees that, in addition to all of the
rights and remedies provided to Landlord pursuant to Article 15 hereof, whether
or not this Lease or Tenant's right to possession hereunder has been terminated,
(a) in the event Tenant is in default under any of the terms, covenants and
conditions of this Lease and Tenant has so failed to replenish the Letter of
Credit as aforesaid, or (b) in the event Tenant has filed (or there has been
filed against Tenant) a petition for bankruptcy protection or other protection
from its creditors under any applicable and available law, then Landlord may at
once and without notice to Tenant be entitled to draw down on the entire amount
of the Letter of Credit and apply such resulting sums toward (i) reimbursement
to Landlord for all of Landlord's then unamortized costs incurred in leasing to
Tenant the Premises demised by this Lease, including, without limitation (xx)
the then unamortized Landlord's Contribution made available to Tenant pursuant
to Article 34 hereof, assuming amortization of such amount over a period of 180
calendar months, commencing on the first full Lease Year, at a level monthly
payment with an interest factor equal to *** percent (***%) per annum, plus (yy)
any then unamortized Take-Down Improvement Allowance made available to Tenant
pursuant to Article 36 hereof, assuming amortization of
______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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such amount over a period commencing on the date of disbursement thereof and
ending on the expiration of the initial Term hereof at a level monthly payment
with an interest factor equal to *** percent (***%) per annum, and (ii)
reimbursement to Landlord for any other damages suffered by Landlord as a result
of such default.
B. The foregoing Letter of Credit shall provide for an original expiration
date of June 30, 1998 and shall be automatically extended without amendment
(subject to the reductions described above) for additional successive one-year
periods from the original expiration date or any future expiration date thereof
for the Term of this Lease, unless sixty days prior to any such expiration date
the bank sends to Landlord by certified/registered mail, return receipt
requested or overnight courier written advice that the bank has elected not to
consider the Letter of Credit renewed for any such additional one-year period.
In the event such bank so advises Landlord that such Letter of Credit will not
be so renewed, Landlord shall promptly thereafter notify Tenant thereof in
writing, and Tenant shall obtain a substitute Letter of Credit from a bank
reasonably approved by Landlord meeting all of. the terms and conditions
described in Paragraph A. above, which substitute Letter of Credit ("Substitute
Letter of Credit") shall be reasonably satisfactory to Landlord and delivered to
Landlord no later than thirty (30) days prior to the expiration date of such
Letter of Credit then in effect. In that event Tenant fails to deliver such
Substitute Letter of Credit to Landlord at least thirty (30) days prior to the
expiration date of such Letter of Credit then in effect, Landlord shall in such
instance have the right without notice to Tenant to immediately draw down on the
entire amount of the Letter of Credit then available to Landlord; in such
instance Landlord shall retain such resulting sum as a cash security deposit
(which sum shall be reduced, so long as Tenant is not then in default hereunder,
to reflect the reduction schedule applicable if Landlord were holding the Letter
of Credit described in Paragraph A above) and Landlord shall have the right to
use such cash security to the same extent that Landlord would be entitled to
draw down on the Letter of Credit pursuant to the terms of Paragraph A. above.
Landlord shall not, unless required by law, keep the security deposit separate
from its general funds or pay interest thereon to Tenant. As between Landlord
and Tenant only, all draws under the Letter of Credit (or cash security,
deposit, as the case may be) and rights of Landlord to apply the proceeds of any
such draw or draft shall be subject to the provisions of this Lease, including
all applicable notice and cure periods provided for in Article 15 hereof, if
any, except that where this Article 32 states no notice to Tenant is required,
Landlord is not obligated to give any notice under Article 15 prior to taking
any action provided for in this Article 32.
33. PARKING.
Landlord agrees to cause to be made available to Tenant during the first
*** Lease years of the initial Term, ***.
_______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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So long as Tenant is not in default hereunder, *** shall be due by Tenant
for the Parking Spaces during the first *** Lease Years and thereafter during
the initial Term Tenant may lease the Parking Spaces at the then prevailing
rates in effect from time to time for parking spaces in such parking lot.
Landlord reserves the right to substitute a different garage or parking lot
parking spaces to satisfy its obligation to provide the foregoing Parking
Spaces, provided any such substitute garage or parking lot is the closest public
lot to the Building. With respect to the Parking Spaces, Tenant agrees to
comply with all regulations in effect from time to time at the facilities in
which the Parking Spaces are located. Tenant agrees that its use, and the use
by its agents, employees and invitees, of the Parking Spaces shall be entirely
at Tenant's own risk and responsibility; and Tenant further agrees that, subject
to the provisions of Article 25 hereof, Landlord, Landlord's beneficiaries,
LaSalle National Bank, as Trustee under Trust Agreement dated May 27, 1981,
known as Trust No. 104000 ("Mart Landlord"), Mart Landlord's beneficiaries, and
their respective officers, directors, partners, agents and employees shall not,
except as otherwise provided by law, be liable for any injury to persons or
damage to property occurring in, on or around the Parking Spaces.
34. LANDLORD'S CONTRIBUTION.
(A) As an inducement for Tenant to enter into this Lease, Landlord agrees
to pay to Tenant an allowance (the "Landlord's Contribution") in an amount not
to exceed *** (calculated by ***). The Landlord's Contribution shall be applied
towards the payment of costs incurred in connection with (i) the alterations,
additions and improvements furnished or installed in the Premises by Tenant in
accordance with Article 35 hereof, including, without limitation, fees for
design, architectural and engineering drawings and (ii) such other expenses,
including the cost of furnishings, fixtures and equipment as are related to the
Lease. The Landlord's Contribution shall be applicable only in connection with
the initial preparation for occupancy of the Premises. To the extent that any
portion of the Landlord's Contribution is used for the purchase of furnishings,
fixtures or equipment, Tenant agrees that Landlord shall have a security
interest in such furnishings, fixtures or equipment, and Tenant agrees to
execute, upon Landlord's request, security agreements, UCC financing statements
or other documents evidencing Landlord's security interest in such items.
(B) It shall be a condition of Landlord's obligation to pay any
installment of the Landlord's Contribution for work performed by any contractor
or supplier, other than those engaged by Landlord, that Tenant shall provide or
cause to be provided to Landlord (to the extent customarily required by title
insurance companies) contractor's affidavits and waivers of lien covering all
labor and material used and expended for which contractors are requesting
payment, and (if applicable) invoices establishing the actual cost of items
purchased and labor provided, all
___________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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in form and content reasonably satisfactory to Landlord. it shall be a further
condition to Landlord's obligation to pay or credit any amount of Landlord's
Contribution at any time that Tenant is not then in monetary default or in
default under any of the other material terms, covenants and conditions of this
Lease. Landlord's Contribution shall be advanced, upon satisfaction of the
foregoing conditions, as costs are incurred, subject to customary retainage.
35. IMPROVEMENT WORK.
In connection with the preparation of the Premises for initial occupancy,
and subject to the terms, covenants and conditions of Article 8 hereof (to the
extent not contrary to or inconsistent with the provisions of this Article 35),
Landlord and Tenant agree that the following shall apply:
A. Shell and Core Work.
-------------------
1. Landlord shall substantially complete at its sole cost and
expense as soon as reasonably possible all of the additional base
building work included in the Shell and Core Work defined below,
subject to delays caused by Force Majeure events and Tenant Delays
(defined below). For purposes hereof, the "Shell and Core Work"
includes the following:
(a) the demolition and removal of existing tenant improvements
located in the Premises, including ceilings, grid, lighting,
partitions, interior doors, floor coverings, millwork and
fixtures and minor floor latexing;
(b) the furnishing and installation of energy efficient thermopane
glass windows with thermal break frames, comparable to the
windows previously installed by Landlord on the fourth (4th)
floor of the Building, on the southerly and westerly walls of the
south tower. The parties recognize that a time period of fourteen
(14) to sixteen (16) weeks is required for the ordering,
fabrication and installation of the windows;
(c) the construction of a demising wall ready to receive Tenant
finish; and
(d) the installation of sound batt installation around the fan
room.
2. In the event Landlord shall fail to substantially complete the Shell
and Core Work on or before the Commencement Date for reasons other
than a Tenant Delay (as defined below), then, such failure shall
constitute a Landlord Delay to the extent it delays the completion of
Tenant's Work beyond the Commencement Date, and the
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Commencement Date shall be extended one (1) day for each day that any
Landlord Delay delays completion of Tenant's Work. If the completion
of Tenant's Work is delayed beyond July 10, 1997 as a result of a
Landlord Delay and not due to any Force Majeure events or Tenant
Delays, then notwithstanding anything to the contrary set forth
herein, Landlord agrees that in addition to the extension of the
Commencement Date described above in this Article 35(A)(2), Base Rent
and rent adjustments shall abate after the Commencement Date one (1)
day for each day of such delay beyond July 10, 1997 (subject to
extension of such date by reason of Force Majeure or Tenant Delays).
3. Substantial completion of the Shell and Core Work shall mean
completion of such Work with the exception of minor and insubstantial
details of construction or mechanical adjustment, the incompletion of
which will not unreasonably interfere with Tenant's use of the
Premises.
4. As used herein, "Force Majeure" events shall mean fire, casualty,
emergencies, lockouts, strikes, labor disputes, war, governmental
action, acts of God, labor or material shortages, transportation
delays, and other causes beyond the reasonable control of the
respective party to prevent, of which the respective party has
notified the other party within ten (10) days after the notifying
party becomes aware of the occurrence of such a cause, but excluding
insufficiency of funds or inability to obtain financing or
disbursement of loans.
5. In the event Landlord shall be delayed in substantially completing the
Shell and Core Work as a result of any fault of Tenant or its agents
or representatives in connection with any of the obligations of Tenant
set forth in this Lease, including, without limitation, any delay in
Tenant's approval of any plans or specifications or other materials
submitted by Landlord to Tenant for Tenant's review and approval such
delay shall be a "Tenant Delay".
6. Landlord and Tenant agree that their respective construction
representatives will cooperate with each other to prepare a
construction schedule with the objective of substantially completing
the Shell and Core Work and Tenant's Work as soon as reasonably
possible and the parties recognize it is the goal of Tenant to
commence initial construction of Tenant's Work within forty-five (45)
days after Lease execution. Landlord and Tenant agree that it may be
more efficient, cost effective and productive for Landlord to perform
certain portions of the Shell and Core Work in conjunction with and
during the construction of Tenant's Work and Tenant agrees to
cooperate and coordinate with Landlord in good faith in identifying
any items of the Shell and Core Work to be performed during the
construction of Tenant's Work, and Landlord and Tenant agree to use
reasonable
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efforts to work in harmony with each other and cooperate so that
Tenant may enter into occupancy of the Premises as soon as reasonably
possible.
B. Tenant's Work. Tenant shall be responsible for the construction of all
-------------
improvements in the Premises beyond the Shell and Core Work, subject to the
terms and conditions hereinafter provided:
1. Plans and Specifications.
------------------------
(a) Tenant shall cause to be prepared and delivered to Landlord
by reputable and qualified architects and engineers, the following plans and
specifications ("Plans") for all improvements Tenant desires to have completed
in the Premises in connection with Tenant's initial occupancy of the Premises
("Tenant's Work"):
(i) Architectural drawings (consisting of floor construction
plan, ceiling lighting and layout, power, and telephone plan).
(ii) Mechanical drawings (consisting of AC, electrical,
telephone and plumbing).
(iii) Finish drawings and schedule (consisting of wall finishes
and floor finishes and miscellaneous details).
All such Plans shall be submitted to Landlord in a state ready for
Landlord's review and approval, which shall not be unreasonably withheld or
delayed, on an interim basis when available from time to time. Tenant shall
deliver to Landlord seven (7) sets of all Plans provided for Landlord's review.
Landlord shall approve or disapprove of such Plans within six (6) business days
after its receipt thereof (and in the case of disapproval, state its reasons for
such disapproval), so long as Tenant or its architect have at least on a regular
basis consulted with Landlord in connection with preparation of such Plans and
delivered to Landlord preliminary drafts-of all such Plans as they become
available from time to time. Landlord shall not withhold its approval of any
improvements which do not affect Building Systems, the structural or member
components of the Building, common areas of the Building or operations in and
around the Building. Landlord and Tenant agree to cooperate and consult with
each other on a regular basis in connection with the preparation of such Plans
and during construction of the Tenant's Work. If Landlord fails to provide such
approval or fails to notify Tenant of the reasons for Landlord's disapproval
within the foregoing six (6) business day review period, Landlord shall be
deemed to have approved all such Plans.
(b) All Plans shall comply with all (1) applicable statutes,
ordinances, regulations, laws, and codes, and (2) the requirements of Landlord's
fire insurance underwriters.
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Neither review nor approval by Landlord of the Plans shall constitute a
representation or warranty by Landlord that such Plans either (i) are complete
or suitable for their intended purpose, or (ii) comply with applicable laws,
ordinances, codes and regulations, it being expressly agreed by Tenant that
Landlord assumes no responsibility or liability whatsoever to Tenant or to any
other person or entity for such completeness, suitability or compliance, except
to the extent that any such work is performed specifically at and in accordance
with the specific direction of Landlord or its management agent. Tenant shall
not make any material changes in the Plans, whether before commencement of
construction or during construction, without Landlord's prior written approval,
which approval shall not be unreasonably withheld. Landlord shall approve or
disapprove any such changes within six (6) business days after its receipt
thereof (and in the case of disapproval, state its reasons for such
disapproval).
2. Performance of Tenant's
-----------------------
(a) Tenant may select its own contractors, subcontractors and/or
suppliers for the performance of the Tenant's Work provided, however, that
Landlord may require Tenant to give assurances reasonably satisfactory to
Landlord that all such contractors, subcontractors and suppliers are reputable,
financially responsible, maintain proper insurance and will not jeopardize labor
harmony. Landlord may also require Tenant to comply with such construction
standards or procedures as may be applicable from time to time for construction
activities in the Building (a set of such standards and procedures currently in
effect having been delivered by Landlord to Tenant in a book entitled
Construction Standards, Procedures and Specifications, Revised: December, 1992.)
- -------------------------------------------------------------------------------
and to submit reasonably satisfactory insurance certificates to Landlord. Tenant
shall pay to Landlord, within thirty (30) days after receipt of any invoice
therefor, Landlord's actual costs reasonably incurred by Landlord for reviewing
the Plans, coordinating the construction with the Building and providing general
conditions (as hereinafter provided), including any costs paid by Landlord to
third parties, if any, and the reasonable actual cost of time spent by
Landlord's employees to perform, such duties, such costs to be determined under
the billing rates set forth in Exhibit "F" attached hereto and made a part
hereof.
(b) Subject to approval of Tenant's Plans as provided by
Paragraph B.1 above and after the filing of the Plans with the appropriate
governmental agencies, Tenant shall, at Tenant's sole costs and expense, except
as otherwise provided herein, cause the contractors employed by it to commence,
as soon as reasonably practicable, to construct and install and pursue to
completion in the Premises the Tenant is Work in accordance with the Plans and
without' deviation from the Plans. Tenant agrees that it shall be responsible
for all contractors, subcontractors and suppliers engaged by Tenant, and that
all work performed by such parties shall be performed and completed in a good,
diligent and workmanlike manner, with no unreasonable noise or interference with
Landlord's and other tenants' Decorations in the Building (taking into account
the nature, extent and time schedule for Tenant's Work).
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(c) Such license to enter upon the Premises prior to the
Commencement Date for the performance of Tenant's Work is conditioned upon
Tenant and Tenant's agents, contractors, workmen, mechanics, suppliers and
invitees working in harmony and not interfering with Landlord or Landlord's
contractors or agents in doing any work in or about the Building, or with other
tenants, invitees and occupants of the Building. If at any time such entry shall
cause such disharmony or interference or, in Landlord's reasonable judgment,
such disharmony or interference is imminent, Landlord shall have the right to
withdraw such license upon twenty-four (24) hours' written notice to Tenant.
When, in Landlord's reasonable judgment, the cause of such disharmony or
interference or imminent potential disharmony or interference ceases to be
present, Landlord shall then promptly again grant such license to enter upon the
Premises.
Tenant agrees that any such entry into and occupation of the Premises
shall be deemed to be under all of the terms, covenants, conditions and
provisions of this Lease except as to the covenants to pay rent, and further
agrees that, except for the negligence or willful acts of Landlord, its
beneficiary or any of their respective agents, employees or contractors,
Landlord shall not be liable in any way for any injury, loss or damage which may
occur to any of Tenant's work or installations made in the Premises or to
property placed therein; and, except for the negligence (by act or omission) or
willful acts of Landlord, its beneficiary or any of their respective agents,
employees or contractors, and except to the extent prohibited by law, Tenant
shall protect, indemnify, defend and save Landlord, its beneficiaries and their
respective officers, directors, agents, beneficiaries, partners, and employees
harmless from and against any and all liabilities, costs, damages, fees and
expenses arising out of or in any way connected with the activities of Tenant or
its agents, contractors, suppliers or workmen in or about the Premises or
Building.
To the extent Tenant employs any contractors from time to time to do
work in the Premises, Tenant shall cause such contractors to secure and pay for
Worker's Compensation, Employers Liability Insurance, and Comprehensive General
Liability Insurance in customary forms and amounts reasonably acceptable to
Landlord. All policies shall be endorsed to include Landlord and its employees
and agents as additional insured parties. Certificates of such insurance shall
be delivered to Landlord prior to Tenant commencing any work in the Premises.
(d) Subject to Tenant's compliance with the reasonable rules and
regulations regarding the use thereof, Landlord shall provide Tenant (unless
Tenant elects otherwise as provided below) with the following general conditions
at Landlord's scheduled rates: (i) materials management coordination; (ii)
reasonable access to freight elevator services and loading docks, free of charge
during business hours (weekdays 7:30 a.m. to 5:00 p.m. for loading docks and
weekdays 6:00 a.m. to 8:00 p.m. for elevator service) during the completion of
the Tenant's Work, and in connection therewith Landlord agrees that it shall use
reasonable efforts to accommodate Tenant's construction schedule (Tenant agrees
to pay for any after business hours
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<PAGE>
elevator operator charges); (iii) ventilation, temporary electricity and water
during the construction period; and (iv) trash removal services from the loading
docks of the Building during construction. Landlord's schedule of costs for
general conditions as of the date of execution hereof is included in Exhibit "F"
attached hereto and made a part hereof; such charges may be revised from time to
time to reflect Landlord's increased costs for supplying such items. Tenant
shall have the right to supply any general conditions (except to the extent such
general conditions are part of the normal operation of the Building and such
operation would be disrupted if such general conditions were provided by another
party) by itself or through its contractors rather than rely upon or be required
to use any services supplied by Landlord, provided, however, in exercising such
right, Tenant shall no-. interfere with the operation of the Building.
(e) Landlord and Tenant acknowledge that Landlord and its contractors
may be performing portions of the Shell and Core Work at the same time that
Tenant and its contractors will be performing Tenant's Work. Landlord and Tenant
agree to cooperate with each other and to coordinate their respective work, and
to use their best efforts to cause their respective contractors to so cooperate
and coordinate, so that both the Shell and Core Work and Tenant's Work may
proceed expeditiously.
3. Delays in Completion of Tenant's Work. The number of days of
-------------------------------------
delay beyond July 1, 1997 in substantially completing Tenant's Work arising out
of or on account of any of the following events, except to the extent such
events are caused by the act or failure to act of Tenant, shall constitute
"Landlord Delays" and the outside date for the Commencement Date as set forth in
Article 1 hereof shall be extended one day for each day that any Landlord Delay
delays completion of Tenant's Work (and under certain circumstances, Landlord
Delays may also result in a rent abatement as described in Article 35(A)(2)
hereof):
Any delay resulting from Landlord's failure to approve the Plans in a
timely manner as required by this Article 35; or
(ii) Any delay resulting from Landlord's failure to perform in a
timely manner the Shell and Core Work pursuant to Paragraph (A) of this Article
35; or
(iii) Provided Tenant and its contractors have used all, reasonable
efforts to comply with the provisions of this Article 35(B), any delay resulting
from Landlord's revocation of the license under subparagraph B.2(c) of this
Article 35 for Tenant's contractors to enter upon the Premises for the
construction of Tenant's Work; or
(iv) Any other fault of Landlord or its agents, contractors, or
representatives in connection with any of the obligations of Landlord set forth
in this Article 35 (provided Tenant notifies Landlord in writing within ten (10)
days after Tenant first learns of any such delay).
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<PAGE>
4. Tenant's Move-In. In connection with Tenant's initial occupancy
----------------
of the Premises after substantial completion of Tenant's Work, Tenant shall have
the right to reserve reasonable portions of the Building is loading docks and
freight elevators (or passenger elevators), subject to scheduling to the mutual
reasonable satisfaction of Landlord and Tenant. Such reservation and use of the
elevators and loading docks in connection with Tenant's move-in shall be without
charge to Tenant, except that Tenant shall pay the cost of any after-hours
elevator service (i.e. other than 6:00 a.m. to 8:00 p.m. on weekdays) at
Landlord's actual cost (including overhead) in accordance with the rates
included in Exhibit "F".
36. EXPANSION OBLIGATIONS.
(A) Effective on ***, there shall be automatically added to the Premises
demised hereunder approximately *** rentable square feet of space contiguous to
the Premises on the *** of the Building (the "First Take-Down Space"), subject
to the terms of this Article 36. Effective on ***, there shall be automatically
added to the Premises demised hereunder approximately *** rentable square feet
of space contiguous to the Premises on the *** of the Building (the "Second
Take-Down Space"), subject to the terms of this Article 36, which Second Take-
Down Space is in addition to the First Take-Down Space. The exact size,
location and configuration of the First Take-Down Space shall be reasonably
determined by Tenant, provided the remaining balance of the space (being the
Second Take-Down Space) is of a leasable and appropriate configuration and the
exact size, location and configuration of the Second Take-Down Space shall be
determined by Landlord, the rentable area set forth above for each Take-Down
Space being an estimate only; however, it is the parties' intent that after the
addition of the Second Take-Down Space, the Premises shall consist of
approximately *** rentable square feet, being the *** of the Building.
(B) Each of the Take-Down Spaces shall be added to the Premises on all of
the terms, covenants and conditions of this Lease, including the payment of Base
Rent and rent adjustments pursuant to Articles 3 and 4 hereof, except for
Articles 34, 35 and 39 hereof. The Base Rent Schedule set forth in Article 3
and the Tenant's Proportionate Share set forth in Article 4 are inclusive of
Tenant's obligation to pay Base Rent and rent adjustments for each of the Take-
Down Spaces; however, if the rentable square footage of any Take-Down Space is
other than as set forth above, then Landlord and Tenant shall enter into an
amendment to this Lease reflecting the actual square footage and adjusting the
Base Rent and Tenant's Proportionate Share accordingly.
(C) Notwithstanding anything in this Lease to the contrary, Tenant agrees
to accept each Take-Down Space in an "as is" broom clean condition (excluding
furniture and equipment)
_____________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
as existing on the date such space is added to the Premises; provided, however,
Landlord agrees to make Available to Tenant, at Tenant's option, an improvement
allowance ("Take-Down Improvement Allowance") in an amount not to exceed to (i)
with respect to the First Take-Down Space, $*** per rentable square foot of
such First Take-Down Space, and (ii) with respect to the Second Take-Down Space,
$*** per rentable square foot of such Take-Down Space, to be applied toward
payment of costs of alterations, additions and improvements, made to such Take-
Down Space by Tenant (including, without limitation, fees for design,
architectural and engineering drawings). Landlord shall disburse such Take-Down
Space Improvement Allowance to or on behalf of Tenant on the same terms and
conditions as applicable to the disbursement of Landlord's Contribution with
respect to Tenant's original construction of the Premises as provided in Article
34 hereof. It is a condition to Landlord's obligation to pay any portion of the
Take-Down Improvement Allowance that Tenant has increased the amount of the
Letter of Credit as described in Article 32.
(D) Tenant may, at its option, add either of the Take-Down Spaces to the
Premises on, the terms set forth in this Article 36, on a date which is earlier
than the date set forth above for the automatic take-down of such space, upon
delivery at least one hundred twenty (120) days prior written notice to
Landlord. In such event, Landlord and Tenant agree to enter into an amendment
to this Lease reflecting the addition of such Take-Down Space within 90 days
after Landlord advises Tenant of the final size, location and configuration of
such Take-Down Space, and in such event, in lieu of the Take-Down Improvement
Allowance described in subparagraph (C), the amount of the Take-Down Improvement
Allowance shall be equal to the product of (i) $*** per rentable square foot of
such Take-Down Space by (ii) the number of Lease Years (including fractions
thereof rounded to the nearest one-twelfth) remaining in the initial Term.
37. OPTIONS TO EXTEND TERM. Subject to the terms of this Article 37, the
Term may be extended, at the option of Tenant, for *** successive periods of ***
years each, each such period being herein sometimes referred to as an "Extended
Term" (and constituting part of the "Term"), as follows:
(A) Each option to extend the Term for an Extended Term must be exercised
by Tenant by (1) delivery to Landlord, not more than *** months and not less
than *** months, prior to the commencement of the applicable Extended Term, of a
non-binding written notice of Tenant's good faith intent to exercise such option
and (2) delivery to Landlord of a binding written notice exercising such option
no less than *** months prior to the commencement of the applicable Extended
Term; provided, however, in no event shall such binding written notice be
required to be delivered earlier than fifteen (15) days after the final
determination of Extension Term Rent pursuant to Paragraph (D) below and, if
applicable, Article 38 hereof. Tenant shall not have the right to extend the
Term beyond the last day of the *** full calendar month of the
______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
Term (as extended pursuant to this Article 37). Any termination of this Lease or
any termination of Tenant's right of possession hereunder during the initial
Term hereof or during an Extended Term shall terminate all rights to extend
granted hereunder. If Tenant shall fail to give Landlord timely notice of its
exercise of an option herein contained or, in the case of the second option to
extend, if Tenant shall fail to exercise such first option to extend, Tenant
shall be deemed to have waived such option to extend the Term hereof and such
option and subsequent option, if any, shall thereupon become null and void.
(B) Each Extended Term shall be on the same terms, covenants and
conditions of this Lease, except for the provisions of Articles 33, 34, 35 and
39 hereof, and except for the determination of Base Rent as hereinafter
provided. The provisions of Article 4 hereof providing for the payment of rent
adjustments with respect to increases in Operating Expenses and Ownership Taxes
shall be applicable to any Extended Term, provided that the Base Year used in
the calculation of such rent-adjustments in any Extended Term shall be the
calendar year in which such Extended Term begins.
--
(C) The Base Rent during any Extended Term (herein referred to as
"Extension Term Rent") shall be at a rate equal to the Fair Market Rent (as
defined in Article 38 hereof) during each Extended Term, which Fair Market Rent
shall be calculated in advance but as of the first day of the applicable
Extended Term rather than as of the date such calculation is made; provided,
however, that the calculation so made shall be final and shall not be remade on
the first day of any such Extended Term. The calculation shall reflect the full
length of the Extended Term, and shall be recalculated for any subsequent
Extended Term.
(D) Landlord shall provide Tenant with Landlord's calculation of Fair
Market Rent, no later than one month after delivery of Tenant's non-binding
written notice under Paragraph (A) above. If Tenant notifies Landlord in
writing within ten (10) days after delivery of Landlord's calculation of the
Fair Market Rent that Tenant contests Landlord's calculation and the parties
cannot within ten (10) days after delivery of such notice by Tenant ("the
Negotiation Period") reach agreement on the Fair Market Rent payable during any
such Extended Term, then the Fair Market Rent shall be determined in accordance
with the procedures set forth in Article 38 hereof.
(E) Tenant may extend the Term only as to all of the Premises as are
demised to Tenant on the date of Tenant's exercise of such applicable option to
extend.
(F) Tenant's rights to exercise its option to extend the Term of this
Lease for any Extended Term are subject to the condition that Tenant is not in
monetary default or in default under any of the other material terms, covenants
or conditions of this Lease at the time that Tenant delivers its written notice
to Landlord of the exercise of any such option to extend for an Extended Term,
or upon the commencement of such Extended Term unless Landlord, in its absolute
discretion, elects in writing to waive such condition to the effective exercise
of the opt--
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<PAGE>
ion (provided the foregoing shall not affect or limit Landlord's rights to
enforce any defaults of Tenant pursuant to Article 15 hereof). Notwithstanding
the foregoing, if the existence of any such default shall, pursuant to the
foregoing, make ineffective the exercise of such option, such exercise shall
nevertheless become effective as of the originally scheduled date if such
default is cured within the earlier of (i) any applicable cure or grace period
specified in Article 15 hereof or (ii) thirty (30) days after delivery of notice
of such default by Landlord to Tenant.
(G) In the event Tenant exercises any option pursuant to this Article 37,
Tenant shall accept the Premises in "as is" condition.
(H) In the event Tenant exercises any option pursuant to this Article 37,
Tenant and Landlord agree to enter into an amendment to this Lease setting forth
the terms applicable to such Extended Term within ninety (90) days after the
date Tenant gives binding notice of its exercise of an option to extend the Term
of this Lease for an Extended Term.
(I) The options to extend granted pursuant to this Article 37 are personal
to 21st Century Cable TV, Inc. (and any Successor or Affiliate to whom this
entire Lease has been assigned in compliance with Article 12) and may not be
exercised by or for the benefit of any other party. Any termination of this
Lease or of Tenant's right to possession under this Lease shall extinguish and
cancel all rights of Tenant under this Article 37.
38. FAIR MARKET; ARBITRATION PROCEDURES.
(A) "Fair Market Rent" for the Premises with respect to any Extended Term
shall mean the fair rental, as of the date for which such Fair Market Rent is
being calculated, per annum per rentable square foot for comparable space for a
comparable term, by reference to comparable space with a comparable use in the
Building, and in other buildings comparable to the Building in quality and
location, but excluding those leases where the tenant has an equity interest in
the property. The Fair Market Rent shall be determined on the basis of a fixed
base rent per square foot without rent adjustments of any kind (other than rent
adjustments with respect to increases in Operating Expenses and ownership Taxes
as provided in Article 4 hereof and, with respect to Fair Market Rent for any
Extended Term, using as a Base Year the calendar year in which the respective
Extended Term commences), whether in the nature of CPI adjustments, step
increases or otherwise (the economic value of any such adjustments then
customarily applicable in the market to be reflected instead in the
determination of such base rent), and taking into account in the calculation of
such base rent (as a decrease in the otherwise applicable base rent) any then
market tenant improvement allowance or concession, free rent concession, or
other concessions, allowances or inducements (other than tenant equity interests
in the property) of any kind then customarily available in the market (such
concessions, allowances or inducements not to be separately stated or paid with
respect to any Extended Term).
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<PAGE>
(B) In the event Tenant disagrees with Landlord's determination of. Fair
Market Rent at any time and the parties thereafter reach agreement on such Fair
Market Rent (and resulting Extension Term Rent) during any Negotiation Period
described in Article 37 hereof, such Fair Market Rent (and resulting Extension
Term Rent) shall be reflected in the lease amendment required to be executed by
Landlord and Tenant pursuant to Article 37 hereof.
(C) In the event Landlord and Tenant are unable to reach agreement on the
calculation of Fair Market Rent during any Negotiation Period described in
Article 37 hereof, then in any such event the Fair Market Rent shall be
determined in accordance with the following arbitration procedures:
(i) within five (5) days after the expiration of any such
Negotiation Period, Landlord and Tenant shall each simultaneously submit to the
other in a sealed envelope its good faith estimate of the Fair Market Rent. If
the higher of such estimate is not more than *** percent of the lower of such
estimates, then the Fair Market Rent shall he the average of the two estimates.
Otherwise, within five (5) days after such exchange of estimates, either
Landlord or Tenant may submit the question to arbitration in accordance with
clause (ii) below, by delivery of written notice to the other exercising such
right within such five (5) day period.
(ii) within seven (7) days after receipt of such notice, Landlord and
Tenant shall select, to act as an arbitrator, an independent MAI appraiser with
experience in real estate activities, including at least ten (10) years'
experience in appraising office space in the downtown Chicago area. If the
parties cannot agree on such an appraiser, each party shall then within a period
of seven (7) days thereafter select an independent MAI appraiser meeting the
previously-described criteria, and within a third period of seven (7) days after
the appointment of the last of the two appraisers to be appointed, the two
appointed appraisers shall select a third appraiser meeting the aforementioned
criteria, and all three of such appraisers shall independently determine the
Fair Market Rent (each such independent determination of the Fair Market Rent
shall be called an "Appraised Rent"). if one party shall fail to make an
appointment of an appraiser within the foregoing seven (7) day period, then the
appraiser chosen by the other party shall choose the other two appraisers.
(iii) once the appraiser (or appraisers if the parties cannot agree on
a single appraiser) has been selected as provided in clause (ii) above, then, as
soon thereafter as practicable but in any case within fourteen (14) days after
the selection of such appraiser (or the last of such appraisers, as the case may
be) the single appraiser's Appraised Rent or the average of the two closest
Appraised Rents (in the case of more than one appraiser) shall he calculated in
accordance with the criteria described in Paragraph (A) of this Article 38 (such
average shall be called the "Average Appraised Rent") a.-id the appraiser (or
appraisers, as the case may be) shall
______________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
select one of the two estimates of Fair Market Rent submitted by Landlord and
Tenant pursuant to Article 38(C)(i), which shall be the one that is closer to
the Appraised Rent or Average Appraised Rent, as the case may be. Landlord and
Tenant agree that the estimates submitted by Landlord and Tenant to each other
shall not be furnished to the appraisers) until the appraisers have informed
Landlord and Tenant of the Appraised Rent or Average Appraised Rent, as the case
may be, as determined by them. The value so selected shall be the Fair Market
Rent. The decision of the appraisers) as to the Fair Market Rent shall be
submitted in writing to, and be final and binding on, Landlord and Tenant.
Landlord and Tenant shall share equally the costs of the appraisers who
participated in the foregoing procedure. Any fees of any counsel engaged
directly by Landlord or Tenant, however, shall be borne by the party obtaining
such counsel.
39. TEMPORARY SPACE.
As an accommodation to Tenant, Landlord shall make available, at the
request of Tenant, for Tenant's occupancy for the conduct of its business up to
approximately 5,000 rentable square feet of temporary space in the Building,
which temporary space is more fully shown and described on Exhibit "G" attached
hereto and made a part hereof, commencing on February 1, 1997, but extending not
later than the Commencement Date. All of the covenants and conditions of the
Lease shall be binding upon Tenant in respect of its use and possession of such
temporary space, except that: (i) Tenant agrees to accept such space in "as is"
condition as existing on the date such space is made available to Tenant; and
(ii) Tenant shall not be obligated to pay to Landlord any rent in respect of
such space (other than housekeeping and janitorial charges and utility charges,
which may be billed directly to Tenant or allocated to Tenant on a proportional
basis as reasonably determined by Landlord).
40. ROOFTOP EQUIPMENT.
(A) Tenant may at any time during the Term, including any Extended Term,
at its sole cost and expense, locate, install and maintain on those certain
antennae platforms located on the roof' of the Building on the second and
thirteenth floors, northwest side, of the Building (collectively, the "Roof"),
as the location of such platforms is more fully shown and described in Exhibit
"H" attached hereto, satellite antennae or dishes or other similar communication
devices from time to time (the "Antennae"), subject to the reasonable approval
of Landlord with respect to size, location, method of installation, and
screening (to the extent such is necessary to avoid unsightly installation of
such Antennae). Tenant shall pay rent for the use of such antennae platforms on
the Roof as follows:
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Lease Year Annual Rent Monthly Installment
---------- ----------- -------------------
*** *** ***
Such rent shall be additional rent due under this Lease payable at the same time
and manner as Base Rent.
(B) In connection with the installation of the Antenna, Tenant shall have
the right at its sole cost and expense to connect such Antennae to the Premises
demised hereby by appropriate cables in locations reasonably designated by
Landlord and subject to such reasonable rules and regulations as may be unposed
by Landlord from time to time. Landlord agrees to make available to Tenant
riser space as is reasonable and necessary for such connection of the Antennae
to the Premises. The location, installation, operation and maintenance of the
Antennae shall (i) conform to all applicable zoning and other applicable
governmental guidelines, laws, codes, rules, regulations, ordinances and
licensing requirements in effect from time to time as well as all reasonable
architectural standards established by Landlord from time to time and any other
requirements or conditions applicable to such installation or maintenance; (ii)
be subject to and completed in accordance with the terms and conditions of
Article 8 hereof and be performed in such manner so as to maintain all
warranties on the Roof and not affect the structural components of the Roof and
shall be coordinated through Landlord; (iii) be located on that part of the Roof
as Landlord may from time to time designate away from the perimeter of the Roof
(as such initial location is shown on Exhibit "F") so as not to be visible from
street level); provided that (a) Landlord shall reasonably cooperate with Tenant
in locating such items so that they shall be useable and useful for their
intended purposes, and (b) Landlord may from time to time require Tenant-to
relocate any or all of such items to another portion or other portions of the
Roof, at Landlord's sole cost and expense, so long as such relocation does not
unreasonably interfere with Tenant's use thereof; and (iv) not unreasonably
interfere with the use of any other communications equipment installed on the
Roof -from time to time by Landlord or other tenants in the Building (and
Landlord agrees not to grant to other tenants of the Building or third parties
the right to install antennae or equipment on the Roof so as to adversely affect
the Antennae of Tenant or the operation thereof and to require any such other
tenants hereafter permitted to install similar equipment to agree not to
unreasonably interfere with the use of any such communications equipment
installed by other tenants, including Tenant, of the Building).
__________________
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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<PAGE>
Tenant shall promptly repair and restore, in a manner consistent with any
warranties, any damage to the Roof or the Building resulting from or arising out
of Tenant's installation, operation, maintenance and repair of the Antennae and
other equipment of Tenant pursuant hereto and protect, indemnify, defend and
hold Landlord and Landlord's beneficiaries and any other owner or owners of the
Building and their beneficiaries, and all of their respective officers,
directors, partners, agents and employees, harmless from and against any
liabilities, damages, costs, claims, and expenses arising out of or in
connection with Tenant's activities under this Article 40.
(C) Tenant agrees that upon expiration of the Term hereof it will promptly
remove any such Antennae and equipment and conduits, cables and other facilities
connecting such Antennae and equipment to the Premises demised hereby, and
repair and restore, in a manner consistent with any warranties, any damage
caused to the Roof, the Building or the Property in connection with such
installation or removal. Tenant and Landlord shall have continuing access to
all areas of the Roof of the Building. Upon prior notice to Tenant, Landlord
shall have the right, at Landlord's expense, to remove the Antennae and/or
relocate the Antennae from time to time as may be necessary or desirable for the
maintenance or repair of the Roof, provided that Landlord coordinates with
Tenant the timing and location and uses reasonable efforts to mitigate any
unreasonable interruption of Tenant's satellite services.
41. COVENANT OF QUIET ENJOYMENT.
Landlord covenants that Tenant, upon paying the Base Rent, rent adjustments
and other payments provided for herein, and upon keeping, observing and
performing all other terms, covenants, conditions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Term, as extended, peaceably and quietly have, hold and enjoy the
Premises subject to the rights of any mortgagee and the terms, covenants,
conditions and agreements hereof free from hindrance by Landlord or any other
person claiming by, through or under Landlord.
42. ENTIRE AGREEMENT.
Except as expressly otherwise provided herein, this Agreement, together
with all of the exhibits attached hereto, constitutes the entire understanding
between Landlord and Tenant as to the subject matter hereof and supersedes all
prior agreements between the parties hereto about such matters, and all of the
representations and obligations of Landlord and Tenant are contained herein.
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43. TRUSTEE CLAUSE.
It is expressly understood and agreed that this Lease is executed on behalf
of LASALLE NATIONAL BANK, not personally but as Trustee aforesaid, in the
exercise of the power and authority conferred upon and invested in it as such
Trustee, and under the direction of the beneficiaries of a certain Trust
Agreement dated March 1, 1967, as extended, and known as Trust No. 36223. It is
further expressly understood and agreed that LASALLE NATIONAL BANK, as Trustee
aforesaid, has no right or power whatsoever to manage, control or operate said
real estate in any way or to any extent and is not entitled at Any time to
collect or receive for any purpose, directly or indirectly, the rents, issues,
profits or proceeds of said real estate or any lease or sale or any mortgage or
any disposition thereof. Nothing in this Lease contained shall be construed as
creating any personal liability or personal responsibility of the Trustee or any
of the beneficiaries of the Trust, or any of their respective officers,
directors, beneficiaries, partners, agents, and employees, and in particular,
without limiting the generality of the foregoing, there shall be no personal
liability to pay any indebtedness accruing hereunder or to perform any covenant,
either expressly or impliedly herein contained, or to keep, preserve or
sequester any property of said Trust or for said Trustee to continue as said
Trustee; and that so far as the parties herein are concerned the owner of any
indebtedness or liability accruing hereunder shall look solely to and attempt to
collect solely from the trust estate from time to time subject to the provisions
of said Trust Agreement for payment thereof, Tenant hereby expressly waiving and
releasing said personal liability and personal responsibility of the Trustee and
any of the beneficiaries of the Trust, and any of their respective officers,
directors, beneficiaries, partners, agents and employees on behalf of itself and
all persons claiming by, through or under Tenant.
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IN TESTIMONY WHEREOF, the parties hereto have caused this instrument to be
executed in duplicate as of the day and year first above written.
TENANT: LANDLORD:
21ST CENTURY CABLE TV, INC. LASALLE NATIONAL BANK, not individually
but as Trustee under a Trust Agreement
dated March 1, 1967, as extended, and
known as Trust No. 36223, as aforesaid
By: /s/ Glenn Milligan By: /s/
-------------------------- -------------------------
Its: President & CEO Its: Senior Vice President
------------------------- ------------------------
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CERTIFICATE
(If Tenant is a Corporation)
I, _______________________________, ___________________ Secretary of
___________________________________________, Tenant, hereby certify that the
foregoing Lease has been authorized by all necessary corporate action on behalf
of Tenant, the officer(s) executing the foregoing Lease on behalf of Tenant
was/were duly authorized to act in his/their capacities as and his/their
action(s) are the action of Tenant.
_________________________
______________ Secretary
(Corporate Seal)
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EXHIBIT 21.1
SUBSIDIARIES OF
21ST CENTURY TELECOM GROUP, INC.
<TABLE>
<CAPTION>
NAME OWNERSHIP STATE OF INCORPORATION
<S> <C> <C>
21st Century Cable TV of Illinois, Inc. Wholly-owned Illinois
21st Century Telecom of Illinois, Inc. Wholly-owned Illinois
</TABLE>
