- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION
FILE NUMBER 1-5837
THE NEW YORK TIMES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-1102020
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
229 WEST 43D STREET, NEW YORK, N. Y. 10036
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 556-1234
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
Class A Common Stock of $.10 par value American Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Not Applicable
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes. X. No. ....
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of Class A Common Stock held by non-affiliates
as of February 28, 1994, was approximately $2.14 billion. As of such date,
non-affiliates held 55,597 shares of Class B Common Stock. There is no active
market for such stock.
The number of outstanding shares of each class of the registrant's common
stock as of February 28, 1994, was as follows: 106,461,863 shares of Class A
Common Stock and 431,681 shares of Class B Common Stock.
DOCUMENT INCORPORATED BY REFERENCE PART
Proxy Statement for the 1994 Annual Meeting of Stockholders . ....... III
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO THE NEW YORK TIMES COMPANY
1993 FORM 10-K
------------------------
PART I
<TABLE> <CAPTION>
ITEM NO. PAGE
<S> <C>
1. Business......................................................................... 1
Introduction................................................................. 1
Summary of Segment Information............................................ 1
Newspapers................................................................... 2
The New York Times........................................................ 2
Circulation............................................................ 2
Advertising............................................................ 3
Production............................................................. 3
The Boston Globe.......................................................... 4
Circulation............................................................ 4
Advertising............................................................ 5
Production............................................................. 5
Regional Newspapers....................................................... 5
International Herald Tribune S.A.......................................... 6
Magazines.................................................................... 6
Women's Magazines......................................................... 6
Sports/Leisure Magazines.................................................. 7
Broadcasting/Information Services............................................ 7
Broadcasting.............................................................. 7
Information Services...................................................... 8
Forest Products Companies.................................................... 8
Competition.................................................................. 9
Employees.................................................................... 10
2. Properties....................................................................... 10
3. Legal Proceedings................................................................ 11
4. Submission of Matters to a Vote of Security Holders.............................. 11
Executive Officers of the Registrant................................................ 11
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters........ 13
6. Selected Financial Data.......................................................... 13
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 13
8. Financial Statements and Supplementary Data...................................... 13
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.......................................................................... 13
PART III
10. Directors and Executive Officers of the Registrant.............................. 13
11. Executive Compensation.......................................................... 13
12. Security Ownership of Certain Beneficial Owners and Management.................. 13
13. Certain Relationships and Related Transactions.................................. 13
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................. 14
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS.
INTRODUCTION
The New York Times Company (the "Company") was incorporated on August 26,
1896, under the laws of the State of New York. The Company is engaged in
diversified activities in the communications field. The Company also has
substantial equity interests in two Canadian newsprint companies and a Maine
supercalendered paper manufacturing partnership.
On October 1, 1993, a wholly owned subsidiary of the Company was merged
with Affiliated Publications, Inc. ("API"), the parent company of The Boston
Globe, which became a wholly owned subsidiary of the Company. (See Note 2 of
Notes to Consolidated Financial Statements and "Newspapers--The Boston Globe".)
The Company currently classifies its businesses into the following
segments:
Newspapers: The New York Times ("The Times"); The Boston Globe, a
daily newspaper, and the Boston Sunday Globe (both editions, "The Globe");
23 other daily and five non-daily newspapers in Alabama, California,
Florida, Kentucky, Louisiana, Maine, Mississippi, North Carolina, South
Carolina and Tennessee ("Regional Newspapers"); a newspaper wholesaler in
the New York City metropolitan area; and a one-half interest in the
International Herald Tribune.
Magazines: Family Circle, McCall's, American HomeStyle, Child,
Fitness, Custom Builder, Golf Digest, Golf World (U.S.), Golf World (U.K.),
Golf Shop Operations, Golf World Industry News (U.K.), Golf Weekly (U.K.),
Tennis, Tennis Buyer's Guide, Cruising World, Sailing World, Sailing
Business, Snow Country and Ski Business.
Broadcasting/Information Services: television stations WREG-TV in
Memphis, Tennessee, WNEP-TV in Wilkes-Barre/Scranton, Pennsylvania, WHNT-TV
in Huntsville, Alabama, WQAD-TV in Moline, Illinois, and KFSM-TV in Fort
Smith, Arkansas; radio stations WQXR (FM) and WQEW (AM) in New York City;
news, photo and graphics services and news and features syndication;
TimesFax; The New York Times Index; and licensing of electronic data bases
and microform, CD-ROM products and the trademarks and copyrights of The
Times.
SUMMARY OF SEGMENT INFORMATION
In 1993 the Company's consolidated revenues increased to $2,019,654,000
from $1,773,535,000 in 1992, due principally to the October 1, 1993 acquisition
of The Globe, the June 1992 acquisition of two wholesale newspaper distribution
businesses and higher advertising and circulation revenues. The Company's net
income in 1993 was $6,123,000, or $.07 per share, compared with a net loss of
$44,709,000, or $.57 per share, in 1992. The 1993 net income includes pre-tax
charges aggregating $35,400,000, or $.23 per share, to cover severance and
related costs resulting from anticipated white-collar and composing room staff
reductions at The Times and an after-tax noncash charge of $47,000,000, or $.56
per share, to write down the Company's investment in its Forest Products Group
to reflect current operating conditions and economic factors in the industry.
The 1992 loss includes an after-tax charge of $33,437,000, or $.43 per share,
related to the net cumulative effect of adopting three accounting changes in
1992 and a pre-tax loss of $53,768,000, or $.47 per share, due to the closing of
The Gwinnett (Georgia) Daily News, the sale of its residual assets and its 1992
operations. A summary of segment information for the three years ended December
31, 1993, is set forth on pages F-2 and F-3 of this Form 10-K. Also see
"Management's Discussion and Analysis" on pages F-4 through F-7 of this Form
10-K.
As part of the API merger, the Company acquired a one-third interest in BPI
Communications, L.P. ("BPI"), a publisher of speciality magazines including
Billboard and Hollywood Reporter. In February 1994 BPI was sold and the Company
received approximately $53,000,000 for its interest. The Company expects to
receive additional payments of approximately $2,000,000 later in the year. (See
Note 2 of Notes to Consolidated Financial Statements.)
<PAGE>
The Company's largest source of revenues is advertising, which influences
the pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally second-quarter and fourth-quarter advertising volume is
higher than that which occurs in the first quarter. Advertising volume tends to
be lower in the third quarter primarily because of the summer slow-down in many
areas of economic activity. In addition, quarterly trends are affected by the
overall economy and economic conditions that may exist in specific markets
served by the Company's business segments.
NEWSPAPERS
The Newspaper Group had revenues of $1,537,934,000 in 1993, compared with
$1,306,952,000 in 1992, and an operating profit of $114,332,000 in 1993,
compared with $81,173,000 in 1992. Exclusive of the special items discussed in
more detail in "Management's Discussion and Analysis" on pages F-4 and F-5 of
this Form 10-K, operating profit of the Newspaper Group increased to
$150,832,000 in 1993 from $129,073,000 in 1992. Improvements in operating profit
were mainly due to inclusion of the results of The Globe since the October 1,
1993 acquisition date, higher advertising and circulation revenues, cost
controls throughout the Group and cost savings related to The Times's Edison
facility. Advertising weakness at the Company's two California regional
newspapers and higher depreciation and newsprint prices partially offset the
higher results.
THE NEW YORK TIMES
CIRCULATION
The Times, a standard-size weekday and Sunday newspaper which commenced
publication in 1851, is circulated in each of the 50 states and the District of
Columbia and worldwide. Approximately 64% of the weekday (Monday through Friday)
circulation is sold in the 31 counties that make up the greater New York City
area which includes New York City, Westchester and parts of upstate New York,
Connecticut and New Jersey; 36% is sold elsewhere. On Sundays approximately 63%
of the circulation is sold in the greater New York City area and 37% elsewhere.
According to reports of the Audit Bureau of Circulations ("ABC"), an independent
agency that audits the circulation of most U.S. newspapers and magazines on an
annual basis, for the semi-annual period ended September 30, 1993, of all
seven-day United States newspapers, The Times's daily and Sunday circulations
were the largest.
The Times's average weekday and Sunday circulations for the five 12-month
periods ended September 30, 1993, as audited by ABC (except as indicated), are
shown in the table below.
<TABLE> <CAPTION>
Weekday Sunday
----------- -------
(Thousands of copies)
<S> <C> <C>
1989............................................................. 1,091.9 1,644.1
1990............................................................. 1,128.3 1,695.9
1991............................................................. 1,160.0 1,730.0
1992............................................................. 1,175.9 1,757.0
1993 (unaudited)................................................. 1,185.0 1,785.0
</TABLE>
During the year ended December 31, 1993, the average weekday circulation of
The Times increased by approximately 1,700 copies to 1,179,000 copies and the
average Sunday circulation of The Times increased by approximately 17,100 copies
to 1,781,200 copies. Approximately 52% of the weekday circulation and 42% of the
larger Sunday circulation were sold through home and office delivery; the
remainder were sold primarily on newsstands.
The suggested newsstand price of The Times within the New York City
metropolitan area is $.50 on weekdays and $2.00 on Sunday. The suggested
newsstand price in the New England-Middle Atlantic states outside the New York
City metropolitan area is $.75 on weekdays and $2.00 on Sundays. The suggested
newsstand price of the National Edition, distributed throughout the rest of the
country, is $.75 on weekdays and $3.50 on Sundays, except that, effective
January 10, 1994, the suggested
2
<PAGE>
newsstand price of the National Edition in 11 southwest and southeast states and
the Caribbean is $1.00 on weekdays.
ADVERTISING
The Times published 77,787,000 lines of advertising in 1993, compared with
77,012,000 lines in 1992. Both figures include part-run linage, which totaled
21,728,000 lines in 1993, compared with 20,574,000 lines in 1992.
Total linage in The Times for the five years ended December 31, 1993, as
measured by Leading National Advertisers Incorporated ("LNA"), an independent
agency that measures advertising volume, is shown in the table below. The
"National" heading in the table below includes such categories as automotive,
financial and general advertising.
<TABLE> <CAPTION>
Retail National Classified
---------------------- ---------------------- ---------------------- Total
Weekday Sunday Weekday Sunday Weekday Sunday
----------- --------- ----------- --------- ----------- --------- ---------
(Thousands of lines)
<S> <C> <C> <C> <C> <C> <C> <C>
1989 21,365 29,267 13,527 15,581 9,612 18,681 108,033
1990 19,542 25,983 11,823 13,920 7,434 14,341 93,043
1991 17,344 22,318 10,173 12,134 5,661 10,988 78,618
1992 18,082 21,528 9,696 12,811 4,721 10,174 77,012
1993 18,377 23,172 9,494 12,463 4,030 10,251 77,787
</TABLE>
The table includes linage for The New York Times Magazine, which published 2,857
pages of advertising in 1993, compared with 2,742 pages in 1992.
Advertising rates for The Times increased an average of 5% in January 1993
and in January 1994.
PRODUCTION
Except for The New York Times Magazine, the Television section, the
National Edition and certain supplements, The Times is currently produced at its
New York City production facility and a newly-operational production and
distribution facility in Edison, New Jersey.
The Times is fully photocomposed, and all news is processed through
electronic editing terminals and photocomposition equipment that produce text at
a rate of up to 3,000 lines per minute. Page images are reproduced on
lightweight printing plates through the use of negatives that are produced by
laser beams scanning paste-ups. The page images are transmitted by direct wire
to the platemaking room in the Manhattan facility and by a combination of
microwave and satellite transmission from the composing room in the Manhattan
facility to the platemaking room in Edison and each of the eight National
Edition printing sites around the country.
The new Edison facility, which recently replaced an older production
facility in Carlstadt, New Jersey, prints all the advance sections of the Sunday
newspaper (except The New York Times Magazine and the Television section) and
approximately one-third of the weekday New York edition. The Edison facility
houses six 10-unit Goss Colorliner presses as well as modern, automated
packaging and distribution equipment. No decision has been made as to the
disposition of the Carlstadt plant, which was closed in February 1993. During
1993 The Times began printing some of its advance Sunday sections at Edison in
color; it expects to add at least two color sections in 1994.
The National Edition of The Times is distributed from eight printing sites:
in the Midwest from printing sites in Chicago, Illinois, and Warren, Ohio; in
the West from printing sites in Torrance and Walnut Creek, California, and
Tacoma, Washington; in the Southwest from a printing site in Austin, Texas; and
in the Southeast from printing sites in Atlanta, Georgia, and Ft. Lauderdale,
Florida. Satellite transmission of page images to the National Edition printing
sites permits early-morning delivery to homes and newsstands in many major
markets.
3
<PAGE>
In June 1992 the Company acquired two wholesale newspaper distribution
businesses that distribute The Times and other newspapers and periodicals in New
York City and central and northern New Jersey. (See Note 2 of Notes to
Consolidated Financial Statements.) These wholesalers operate under the name of
City & Suburban Delivery Systems. Approximately 46% of The Times's daily
circulation and 40% of its Sunday circulation in the New York City metropolitan
area are delivered to retail outlets and home delivery depots through these
wholesale operations.
The Times has an agreement with R.R. Donnelley & Sons Company to print The
New York Times Magazine through December 1999 and an agreement with KTB
Associates, Inc. to print the Television section through February 1998.
In 1993 The Times used approximately 301,000 metric tons of newsprint,
which was purchased primarily under long-term contracts from both related and
unrelated suppliers (see "Forest Products Companies"). The New York Times
Magazine used approximately 21,000 metric tons of supercalendered paper, an
intermediate grade of magazine quality paper, in 1993. This supercalendered
paper was purchased under long-term contracts from both related (see "Forest
Products Companies") and unrelated suppliers. The Times and The New York Times
Magazine are not dependent on any one supplier.
THE BOSTON GLOBE
The Company acquired The Globe on October 1, 1993, pursuant to a merger of
a wholly owned subsidiary of the Company into API. The Globe is owned and
published by an API subsidiary, Globe Newspaper Company (as used herein, "The
Globe" may also be used to refer to Globe Newspaper Company).
CIRCULATION
The Globe is distributed throughout New England, though its circulation is
concentrated in the Boston metropolitan area. According to ABC reports, as of
September 30, 1993, the daily circulation of The Globe was the 12th largest of
any daily newspaper, and circulation of the Sunday edition was the 9th largest
of any Sunday newspaper published in the United States; and its daily and Sunday
circulation was the largest of all newspapers published in either Boston or New
England.
During the year ended December 26, 1993, the average weekday circulation of
The Globe decreased by approximately 3,300 copies to 504,600 copies and the
average Sunday circulation increased by approximately 2,700 copies to 814,500
copies. Approximately 68% of The Globe's total daily circulation and 54% of The
Globe's total Sunday circulation were sold through home or office delivery; the
remainder were sold primarily on newsstands.
Within the 30-mile-radius of Boston, the newsstand price of the daily
edition of The Globe during 1993 was $.35. The newsstand price for copies sold
more than 30 miles from Boston was $.50. The newsstand price of the Sunday
edition of The Globe was $1.50. The seven-day home delivery price for the
newspaper was $4.00.
The following table shows the average weekday and Sunday paid circulation
of The Globe for the editions and the periods indicated.
<TABLE> <CAPTION>
PERIOD WEEKDAY SUNDAY
- ---------------------------------------------------------------------- --------- ---------
<S> <C> <C>
52 Weeks ended March 28, 1993*........................................ 506,996 811,743
26 Weeks ended September 26, 1993**................................... 507,647 814,036
</TABLE>
- ---------------
* Per audit report of ABC.
** As submitted by The Globe to ABC.
4
<PAGE>
ADVERTISING
The Globe's total advertising volume by category of advertising for the
year ended December 31, 1993 for all editions, as measured by The Globe, is set
forth below:
<TABLE>
<S> <C>
Run of Press inches, Daily & Sunday
Retail............................................................................... 816,911
National............................................................................. 510,973
Classified........................................................................... 1,158,163
Zone advertising inches................................................................ 252,408
Preprint distribution in pieces........................................................ 637,670,000
</TABLE>
Advertising rates in each category of advertising were adjusted in 1993.
The latest increase in retail advertising rates occurred on January 1, 1994.
Increases in national and classified advertising rates occurred effective July
1, 1993 and August 1, 1993, respectively. These increases ranged from 2.1% to
4.5%.
PRODUCTION
All editions of The Globe are printed and prepared for delivery at its main
Boston plant or its Billerica, Massachusetts, satellite plant. Both of the
plants use Goss Metroliner offset presses. The Boston plant has a comprehensive
computerized information system utilizing terminals for entering news and
advertising copy into its phototext setting equipment. The data for printing The
Globe at the Billerica plant are delivered by dedicated telephone lines.
In June 1992, The Globe purchased a 126,000 square foot building in
Westwood, Massachusetts, which became operational as a Sunday pre-print storage,
inserting and packaging plant in the fall of 1993.
Virtually all of The Globe's home-delivered circulation is delivered
through The Globe's distribution subsidiary, Community Newsdealers Inc.
In 1993, The Globe used approximately 128,000 metric tons of newsprint. The
major portion was purchased under long-term contracts with unrelated suppliers;
The Globe is not dependent on any one supplier.
REGIONAL NEWSPAPERS
The Company currently owns 23 daily and five non-daily smaller-city
newspapers.
<TABLE>
<S> <C> <C>
Daily Newspapers Non-Daily Newspapers
---------------- --------------------
Sarasota Herald-Tribune The Courier (Houma, La.) York County Coast Star
(Fla.) Daily Commercial (Kennebunk, Me.)
The Press Democrat (Santa (Leesburg, Fla.) The News-Sun (Sebring/
Rosa, Cal.) Times-News Avon Park, Fla.)
The Ledger (Lakeland, Fla.) (Hendersonville, N.C.) Marco Island Eagle
The Gainesville Sun (Fla.) Daily World (Opelousas, La.) (Fla.)
Santa Barbara The Dispatch (Lexington, N.C.) News-Leader
News-Press (Cal.) Lenoir News-Topic (N.C.) (Fernandina Beach, Fla.)
Spartanburg Daily Comet (Thibodaux, La.) The Banner-Independent
Herald-Journal (S.C.) Palatka Daily News (Fla.) (Booneville, Miss.)
Wilmington Morning Star The Messenger
(N.C.) (Madisonville, Ky.)
Ocala Star-Banner (Fla.) The Daily Corinthian
Times Daily (Corinth, Miss.)
(Florence, Ala.) Lake City Reporter (Fla.)
The Tuscaloosa News (Ala.) State Gazette (Dyersburg,
The Gadsden Times (Ala.) Tenn.)
</TABLE>
5
<PAGE>
The regional daily newspapers achieved circulation gains for the year ended
December 31, 1993, as weekday circulation increased 4,500 copies to 851,000
copies and Sunday circulation increased 9,200 copies to 853,700 copies; the
circulation of the non-dailies decreased 500 copies to 72,700 copies.
Advertising volume, stated on the basis of six columns per page, was 35,163,700
inches in 1993, compared with 33,854,000 inches in 1992. The circulation gains
and the advertising volume exclude the 1992 circulation and advertising volume
of The Gwinnett (Georgia) Daily News, which the Company closed in September
1992. The circulation and advertising volume include the two weekly Georgia
newspapers sold at year-end, The Forsyth County News (Cumming) and The Winder
News (Winder). (See Note 2 of Notes to Consolidated Financial Statements.)
All of the Regional Newspapers are produced by photocomposition and offset
printing. In 1993 the Regional Newspapers used approximately 99,000 metric tons
of newsprint, which was purchased under long-term contracts from both related
(see "Forest Products Companies") and unrelated suppliers. The Regional
Newspapers are not dependent on any one supplier.
INTERNATIONAL HERALD TRIBUNE S.A.
The Company owns a one-half interest in the International Herald Tribune
S.A., which publishes the International Herald Tribune. The newspaper is edited
in Paris and printed simultaneously in Paris, London, Zurich, Hong Kong,
Singapore, The Hague, Marseille, Tokyo, Rome, Frankfurt and New York. The other
one-half interest is owned by The Washington Post Company.
MAGAZINES
The Company's Magazine Group had revenues of $394,463,000 in 1993, compared
with $386,120,000 in 1992, and operating profit of $12,330,000 in 1993, compared
with $9,929,000 in 1992. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), which were structured to
maximize cash flow, the Group's operating profit was $25,400,000 in 1993, which
is equal to 1992. Continuing softness in advertising in the consumer packaged
goods category in the women's magazines field continues to affect the Group
adversely.
All of the Company's magazines are printed under long-term contracts with
unrelated printers. In 1993 the magazines used approximately 78,000 metric tons
of coated paper, all of which was purchased from unrelated suppliers under
long-term contracts.
WOMEN'S MAGAZINES
As of December 31, 1993, NYT Women's Magazines published the magazines
listed in the chart below:
<TABLE> <CAPTION>
PERCENTAGE
INCREASE
(DECREASE) IN
AVERAGE
PUBLICATION SUBJECT/ AVERAGE CIRCULATION ADVERTISING
MAGAZINE CYCLE AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(4)
- -------------------------- ----------------- ------------------ ---------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Family Circle............. 17 issues per Women's Service 5,000,000 5,092,000 (1.3) 1,570
year
McCall's.................. Monthly Women's Service 4,600,000 4,604,000 (1.6) 1,138
American HomeStyle(2)..... 8 issues per year Home decorating 700,000(2) 712,000 7.4 469
Child(3).................. 10 issues per Parents of 650,000(3) 612,000 13.3 872
year children under 12
Fitness................... 6 issues per year Health and fitness 500,000(5) 408,000 40.9 237
Custom Builder............ 7 issues per year Trade publication Not 28,000 4.7 357
for the shelter Applicable
field
<CAPTION>
PERCENTAGE
INCREASE
(DECREASE) IN
ADVERTISING
MAGAZINE PAGES OVER 1992
- -------------------------- ---------------
Family Circle............. (8.9)
McCall's.................. (5.2)
American HomeStyle(2)..... 3.3
Child(3).................. 5.1
Fitness................... 91.3
Custom Builder............ 42.2
</TABLE>
- ---------------
(1) As reported by the publisher to ABC or the Business Publications
Association ("BPA").
(2) Formerly called Decorating Remodeling. Six ancillary publications were
published in 1993: Home Plans (four times a year), Kitchen Plans (two
times a year), Build It, Build It Ultra, Weekend Decorator, Weekend
Remodeler. The Ratebase for American HomeStyle increased from 675,000
to 700,000 in January 1994.
(3) Four ancillary publications were published in 1993: Organized Parent,
Organized Pregnancy, Having a Baby, Child's Guide to Baby Products. The
Ratebase for Child increased from 600,000 to 650,000 in January 1994.
(4) As reported by the publisher to Publisher's Information Bureau ("PIB");
or, in the case of Custom Builder, as calculated by the publisher using
the same methodology as for PIB.
(5) The Ratebase increased from 400,000 to 500,000 in January 1994.
In 1993, NYT Women's Magazines also published 14 Special Interest
Publications on such topics as Christmas, food and shelter.
6
<PAGE>
SPORTS/LEISURE MAGAZINES
As of December 31, 1993, NYT Sports/Leisure Magazines published the
magazines listed in the chart below:
<TABLE> <CAPTION>
PERCENTAGE PERCENTAGE
INCREASE INCREASE
(DECREASE) IN (DECREASE) IN
AVERAGE ADVERTISING
PUBLICATION AVERAGE CIRCULATION ADVERTISING PAGES
MAGAZINE CYCLE SUBJECT/AUDIENCE RATEBASE CIRCULATION(1) OVER 1992 PAGES(2) OVER 1992
- ----------------------- ----------------- ------------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Golf Digest............ Monthly Golf 1,450,000 1,459,000 2.8 1,344 0.9
Tennis................. Monthly Tennis 800,000 804,000 5.8 795 3.5
Snow Country........... 8 issues per year Skiing market 460,000 428,000 14.9 669 24.6
Recreational
Cruising World......... Monthly sailors 143,000 148,000 0.9 1,169 10.3
44 issues per
Golf World (U.S.)...... year Golf 135,000 141,000 2.0 1,622 (1.9)
Golf World (U.K.)...... Monthly Golf 94,500 95,000 3.0 1,180 5.9
Sailing World.......... Monthly Racing sailors 61,000 64,000 1.5 555 13.0
10 issues per
Golf Shop Operations... year Golf trade 16,500 17,000 1.3 1,469 (2.1)
Ski Business........... 6 issues per year Ski trade 11,500 12,000 (8.1) 302 62.4
Tennis Buyer's Guide... 6 issues per year Tennis trade 10,100 10,000 (0.9) 326 (9.9)
Sailing Business....... 6 issues per year Sailing trade 8,500 8,000(3) 17.7 93 3.3
Golf Weekly (U.K.)..... Weekly Golf 8,250 8,000 (21.6) 651 8.7
Golf World Industry
News (U.K.)............ Monthly Golf trade 5,000 5,000 0 231 20.3
</TABLE>
- ---------------
(1) As reported by the publisher to ABC or BPA.
(2) As reported by the publisher to PIB; or, in the case of trade publications,
as calculated by the publisher using the same methodology as for PIB.
(3) As provided by publisher.
BROADCASTING/INFORMATION SERVICES
Broadcasting/Information Services had revenues of $87,257,000 in 1993, up
from $80,463,000 in 1992, and an operating profit of $19,403,000 in 1993,
compared with $14,766,000 in 1992. Higher local advertising revenues at the
Company's television stations accounted for the improved results.
BROADCASTING
The Company's television and radio stations are operated under licenses
from the Federal Communications Commission ("FCC") and are subject to FCC
regulations. Each television station's license is for a five-year term. The
licenses for WREG-TV (Memphis, Tenn.), WHNT-TV (Huntsville, Ala.), WQAD-TV
(Moline, Ill.) and KFSM-TV (Fort Smith, Ark.) will expire in 1997. The license
of WNEP-TV (Wilkes-Barre/Scranton, Pa.) will expire on August 1, 1994. The
Company expects this license to be renewed.
All of the television stations have three principal sources of revenue:
local advertising sold to advertisers in the immediate geographic areas of the
stations, national spot advertising and compensation paid by the networks for
carrying commercial network programs. WREG-TV, WHNT-TV and KFSM-TV are
affiliated with the CBS Television Network and WNEP-TV and WQAD-TV are
affiliated with the ABC Television Network.
WREG-TV, WQAD-TV and KFSM-TV are in the VHF band; WNEP-TV and WHNT-TV are
in the UHF band, as are all other stations in their markets. According to A. C.
Nielsen Company, Memphis is the 42nd largest television market in the United
States, Wilkes-Barre/Scranton is the 47th largest market, Huntsville is the 87th
largest market, Moline is part of the Quad Cities market, the 88th largest, and
Fort Smith is the 118th largest market.
The Company's two radio stations serve the New York metropolitan area. WQXR
(FM) is currently the only commercial classical music station serving this
market. WQEW (AM) is the only station that offers a format of American popular
standards for the market. Applications for renewal of the FCC licenses for both
stations for the seven-year terms starting June 1, 1991, are pending. Although
the National Hispanic Media Coalition has filed an opposition to the radio
stations' license renewals, the Company expects its licenses to be renewed.
7
<PAGE>
INFORMATION SERVICES
The New York Times Syndication Sales Corporation ("Syndication Sales")
operates The New York Times News Service, Special Features and the licensing and
reprint permission operations of The Times. The News Service transmits articles,
graphics and photographs from The Times to approximately 650 newspapers and
magazines in the United States and in 53 countries worldwide. Special Features
markets other supplemental news services and feature material, graphics and
photographs from The Times and other leading news sources to newspapers and
magazines around the world.
In 1993 the Company continued to expand its distribution of TimesFax, a
six- to eight-page synopsis of The Times delivered to customers' facsimile
machines or personal computers in markets where The Times is not easily
available. In addition to distribution by satellite to cruise ships and U.S.
Navy vessels, TimesFax is distributed to hotels, governments and corporations in
over 50 countries and territories. In 1993 the Company launched its first
industry specific fax product: The Monday Media edition, a six-page synopsis of
media-related news, is produced weekly and distributed to media and advertising
executives.
Through its Index department and Times On-Line Services, Inc., the Company
creates The New York Times Index and computer-retrievable data bases. The
Company licenses Mead Data Central, Inc. to store, market and distribute its
on-line computer data bases and University Microfilms, Inc. to produce and sell
The New York Times Index and The Times on microform and CD-ROM. The Company has
entered into license agreements which will make material from The Times
available online on the day of publication through Dow Jones Business
Information Services and America Online beginning in the first half of 1994.
FOREST PRODUCTS COMPANIES
The Company has equity interests in two Canadian newsprint companies,
Donohue Malbaie Inc. ("Malbaie"), and Gaspesia Pulp and Paper Company Ltd.
("Gaspesia"), and in a partnership operating a supercalendered paper mill in
Maine, Madison Paper Industries ("Madison") (collectively, the "Forest Products
Companies"). None of these companies' debt is guaranteed by the Company.
Exclusive of the $47,000,000 noncash charge to write down the Company's
investment in the Forest Products Group (see "Summary of Segment Information"),
the Company's equity in operations (an after-tax amount) of these businesses in
1993 was a loss of $4,852,000 compared with a loss of $8,718,000 in 1992.
Softness due to oversupply is continuing. The improved year over year results
are due principally to lower newsprint discounts and a favorable Canadian
exchange rate.
The Company has a 49% equity interest in Malbaie. The other 51% is owned by
Donohue, Inc. ("Donohue"), a publicly traded Canadian company whose voting
shares are controlled by Quebecor, a Canadian publishing company. Malbaie
purchases pulp from Donohue and manufactures newsprint from this raw material on
the paper machine it owns within the Donohue paper mill at Clermont, Quebec.
Malbaie is wholly dependent upon Donohue for its pulp. The production capacity
for 1993 of Malbaie was 196,000 metric tons. In 1993 Malbaie produced 192,000
metric tons of newsprint, 82,000 tons of which were sold to the Company with the
balance sold to Donohue for resale.
The Company has a 49% equity interest in Gaspesia. The other 51% is owned
by Abitibi-Price Inc. ("Abitibi"), a publicly traded Canadian company. Gaspesia
produces newsprint at Chandler, Quebec, on the southern coast of the Gaspe
Peninsula. Gaspesia has cutting rights on approximately 2,500 square miles of
forest under a license from the Province of Quebec. It also purchases wood from
local jobbers and farmers. The production capacity for 1993 of Gaspesia was
256,000 metric tons. Under the terms of the Company's agreement with Abitibi,
all of Gaspesia's production is purchased by Abitibi for resale to the Company
and other customers. The Company has a long-term newsprint purchase agreement
with Abitibi, pursuant to which it purchased 133,000 tons of newsprint from
Abitibi in 1993. The Company includes all of this newsprint as affiliated
tonnage when calculating how much newsprint the Company purchases from
affiliated companies.
8
<PAGE>
Madison is a partnership between Northern SC Paper Corporation ("Northern")
and a subsidiary of Myllykoski Oy, a Finnish papermaking company. The Company
owns 80% of Northern, and Myllykoski Oy, through a subsidiary, owns the
remaining 20%. Madison produces supercalendered paper at its facility in
Madison, Maine. Madison purchases all its wood from local suppliers, mostly
under long-term contracts. Madison's production capacity for 1993 was 170,000
metric tons, 10,050 tons of which were sold to the Company. In 1994 Madison's
five largest customers, one of which is the Company, are expected to purchase
approximately 68% of Madison's budgeted production.
The Forest Products Companies are subject to comprehensive environmental
protection laws, regulations and orders of provincial, federal, state and local
authorities of Canada or the United States (the "Environmental Laws"). The
Environmental Laws impose effluent and emission limitations and require the
Forest Products Companies to obtain, and operate in compliance with the
conditions of, permits and other governmental authorizations ("Governmental
Authorizations"). The Forest Products Companies follow policies and operate
monitoring programs to ensure compliance with applicable Environmental Laws and
Governmental Authorizations and to minimize exposure to environmental
liabilities. Various regulatory authorities periodically review the status of
the operations of the Forest Products Companies. Based on the foregoing, the
Company believes that the Forest Products Companies are in substantial
compliance with such Environmental Laws and Governmental Authorizations.
COMPETITION
The Times competes with newspapers of general circulation in New York City
and its suburbs. The Times also competes in varying degrees with national
publications such as The Wall Street Journal and USA Today and with television,
radio and other media. Based on a specially prepared LNA report and The Times's
own internal analysis, The Times believes that it ranks first in advertising
revenue in the general weekday and Sunday newspaper field in the New York City
metropolitan area. The Regional Newspapers and the International Herald Tribune
compete with a variety of other advertising media in their respective markets.
The Globe competes with other newspapers distributed in Boston and its
neighboring suburbs. However, the only major daily metropolitan newspaper in
direct competition with The Globe is The Boston Herald (daily and Sunday), whose
publisher and sole stockholder (through Herald Media, Inc.) is Patrick J.
Purcell. The Globe also competes with other communications media, such as direct
mail, magazines, radio, television (including cable television), and
nationally-distributed newspapers. Based on information supplied by major daily
newspapers published in New England and assembled by the New England Newspaper
Association, Inc., for the 12-month period ending December 31, 1993, The Globe
ranked first in advertising inches among all newspapers published in Boston and
New England.
All the magazines published by the Company compete directly with comparable
publications as well as with general interest magazines and other media, such as
newspapers and broadcasting.
All of the Company's television stations compete directly with other
television stations in their respective markets and with other video services
such as cable network programming carried on local cable systems. WQXR (FM)
competes in New York City with WNYC (a non-commercial station) for the classical
music audience, and it and WQEW (AM) compete with many adult-audience commercial
radio stations and other media in New York City and surrounding suburbs.
Syndication Sales's operations compete with several other syndicated
features and supplemental news services.
The Forest Products Companies are in a highly-competitive industry.
9
<PAGE>
EMPLOYEES
As of December 31, 1993, the Company had approximately 13,000 full-time
employees.
Approximately 4,290 full-time employees of The Times and City & Suburban
Delivery Systems, which operates its newspaper wholesaler business, are
represented by 14 unions. The Times has collective bargaining agreements
effective through March 30, 2000, with all of its six production unions and with
seven of its eight non-production unions. The production agreements enabled The
Times to begin full operation of its Edison production and distribution facility
in February 1993. The Times is in the process of negotiating the remaining
agreement with the Newspaper Guild of New York; this agreement expired on March
30, 1993; The Times cannot predict the timing or the outcome of the
negotiations. Three other entities owned by the Company (The Press Democrat,
WQXR and WQEW) also have collective bargaining agreements covering certain of
their employees.
Approximately 2,103 full-time employees of The Globe and Wilson Tisdale
Company, its subsidiary which owns the truck fleet used in delivery of The
Globe, are represented by 12 unions. As of December 31, 1993, labor agreements
with four of its 11 mechanical unions were in effect with expiration dates
ranging from December 31, 1995, to December 31, 1998. Labor agreements with six
of the other mechanical unions expired on December 31, 1992, and one expired on
December 31, 1993; negotiations are proceeding with respect to these new
agreements, all of which The Globe expects to be completed during 1994. A new
agreement with The Boston Globe Employees' Association covering the period from
January 1, 1991, through December 31, 1994, was recently approved by the union
membership. On March 10, 1994, the membership of that union voted to affiliate
with The Newspaper Guild.
ITEM 2. PROPERTIES.
The Times: The Company owns its headquarters at 229 West 43d Street, New
York, New York. The building has 15 stories and approximately 714,000 square
feet of floor space and serves as a publishing facility for The Times.
The other publishing facility is located in Edison, New Jersey. This
1,300,000 square foot facility is occupied pursuant to a long-term lease with
renewal and purchase options. The Edison production and distribution facility
began producing newspapers in September 1992, and produces all of the advance
Sunday sections of The Times (except The New York Times Magazine and the
Television section) and approximately one-third of the weekday and Sunday New
York edition. (See Notes 3 and 13 of Notes to Consolidated Financial
Statements.)
The Edison facility is the first step in a plan to modernize the production
facilities of The Times, giving the Company the ability to add color, increase
paging and sections and improve quality. To complete this upgrade in capability
and capacity, the Company plans to replace the production facility housed in the
basement at its 43d Street facility.
On December 17, 1993, the Company executed a lease agreement and related
agreements with the City of New York under which the Company will lease a
31-acre site for this replacement facility in Queens, New York. The agreements
include a package of tax benefits and energy cost reductions valued at
approximately $29 million. The Company has ten years in which to begin
construction, and the lease will run for 25 years from the start of
construction. The Company has the option to purchase the property at any time
prior to the end of the lease. Construction of the facility is subject to
approval of the Company's Board of Directors. (See Note 3 of Notes to
Consolidated Financial Statements.)
The Globe owns its printing plants in Boston and Billerica, Massachusetts,
as well as its new Sunday pre-print storage, inserting and packaging plant in
Westwood, Massachusetts. The Globe and its subsidiaries own or lease office and
other facilities that are suitable and adequate for their current activities.
The Regional Newspapers own their printing facilities. The Company's
regional newspapers, magazines, broadcast stations and information businesses
own or lease office facilities that are suitable and adequate for their current
activities.
10
<PAGE>
ITEM 3. LEGAL PROCEEDINGS.
There are various legal actions that have arisen in the ordinary course of
business and are now pending against the Company. Such actions are usually for
amounts greatly in excess of the payments, if any, that may be required to be
made. It is the opinion of management after reviewing such actions with legal
counsel to the Company that the ultimate liability which might result from such
actions will not have a material adverse effect on the consolidated financial
position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE> <CAPTION>
Employed
By
Registrant Position(s) As Of
Name Age Since March 21, 1994(1)
- ------------------------------------ ----------- ---------- -----------------------------------------------------------
<S> <C> <C> <C>
CORPORATE OFFICERS
Arthur Ochs Sulzberger.............. 68 1951 Chairman (since 1973); Chief Executive Officer; Director;
Publisher of The New York Times ("The Times") (1963 to
1992)
Lance R. Primis..................... 47 1969 President and Chief Operating Officer (since 1992);
President and General Manager of The Times (1988 to 1992)
Katharine P. Darrow................. 50 1970 Senior Vice President (since 1993), Broadcasting, Corporate
Development and Human Resources; Vice President,
Broadcasting/Information Services and Corporate
Development (1989 to 1993); Vice President, Information
Services (1988 to 1989); General Counsel (1981 to 1989)
David L. Gorham..................... 61 1974 Senior Vice President and Chief Financial Officer (since
1980); Treasurer (1988 to 1992)
Michael E. Ryan..................... 55 1956 Senior Vice President (since 1980), Law, Forest Products
and Special Projects
Frank R. Gatti...................... 47 1974 Vice President (since 1988); Corporate Controller
Leslie A. Mardenborough............. 45 1981 Vice President, Human Resources (since 1990); Director,
Corporate Personnel (1987 to 1990)
Gordon Medenica..................... 42 1982 Vice President, Operations and Planning (since 1993); Vice
President, Corporate Planning (1990 to 1993); Director,
Planning (1986 to 1990)
Thomas H. Nied...................... 51 1977 Vice President, Taxation (since 1990); Tax Director (1977
to 1990)
Elise J. Ross....................... 50 1973 Vice President and Chief Information Officer (since 1992);
Senior Vice President of Systems and Technology of The
Times (1992); Senior Vice President of Systems of The
Times (1988 to 1992)
Solomon B. Watson IV................ 49 1974 Vice President (since 1990); General Counsel (since 1989);
Secretary (1979 to 1989)
</TABLE>
11
<PAGE>
<TABLE> <CAPTION>
Employed
By
Registrant Position(s) As Of
Name Age Since March 21, 1994(1)
- ------------------------------------ ----------- ---------- -----------------------------------------------------------
<S> <C> <C> <C>
Laura J. Corwin..................... 49 1980 Secretary (since 1989) and Corporate Counsel (since January
1993); Assistant Secretary (1983 to 1989)
Richard G. Thomas................... 45 1977 Treasurer (since 1992); Assistant Treasurer (1983 to 1992)
OPERATING UNIT EXECUTIVES
James W. FitzGerald................. 55 1968 President, Sports/Leisure Division of the Company's
Magazine Group (since 1985)
Stephen Golden...................... 47 1974 Vice President, Forest Products, Health, Safety and
Environmental Affairs (since 1992); President and General
Manager of the Company's Forest Products Group (since
January 1994); Vice President, Forest Products (1990 to
1992); Director, Forest Products Group (1987 to 1990)
C. Frank Roberts.................... 50 1970 Vice President, Broadcasting (since 1986)
Arthur O. Sulzberger, Jr............ 42 1978 Publisher of The Times (since 1992); Deputy Publisher of
The Times (1988 to 1992)
William O. Taylor................... 61 1993 Publisher of The Boston Globe (since 1978) and Chairman and
Chief Executive Officer of Globe Newspaper Company (since
1982)
James C. Weeks...................... 51 1971 President, Regional Newspaper Group of the Company (since
1993); Senior Vice President, Operations, Regional
Newspaper Group (1988 to 1993)
</TABLE>
- ---------------
(1) During the past five years, all of the executive officers listed above have
held positions which were the same or substantially similar to those they
currently hold except as indicated above.
12
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information required by this item appears at page F-26 of this Form
10-K.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item appears at page F-28 of this Form
10-K.
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item appears at pages F-4 to F-7 of this
Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item appears at pages F-2, F-3 and F-8 to
F-27 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In addition to the information set forth under the caption "Executive
Officers of the Registrant" in Part I of this Form 10-K, the information
required by this item is incorporated by reference to pages 6 to 14 of the
Company's Proxy Statement for the 1994 Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference to pages
14 to 20 (but only up to and not including the paragraph entitled "Performance
Presentation") of the Company's Proxy Statement for the 1994 Annual Meeting of
Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is incorporated by reference to pages
1 to 8 of the Company's Proxy Statement for the 1994 Annual Meeting of
Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference to pages
14 to 15 and pages 17 to 20 (but only up to and not including the paragraph
entitled "Performance Presentation") of the Company's Proxy Statement for the
1994 Annual Meeting of Stockholders.
13
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.
(A) DOCUMENTS FILED AS PART OF THIS REPORT
(1) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
(a) The consolidated financial statements of the Company are filed
as part of this Form 10-K and are set forth on pages F-2, F-3 and F-8 to
F-25. The report of Deloitte & Touche, Independent Public Accountants,
dated February 10, 1994, is set forth on page F-26 of this Form 10-K.
(b) The following additional consolidated financial information is
filed as part of this Form 10-K and should be read in conjunction with
the consolidated financial statements set forth on pages F-2, F-3 and
F-8 to F-25. Schedules not included with this additional consolidated
financial information have been omitted either because they are not
applicable or because the required information is shown in the
consolidated financial statements at the aforementioned pages.
<TABLE> <CAPTION>
Page
----
<S> <C>
Consent of Independent Public Accountants......................................... 18
Consolidated Schedules for the Three Years Ended December 31, 1993:
V--Property, Plant and Equipment............................................. S-1
VI--Accumulated Depreciation of Property, Plant and Equipment................ S-2
VIII--Valuation and Qualifying Accounts...................................... S-3
IX--Short-term Borrowings.................................................... S-4
X--Supplementary Income Statement Information................................ S-5
</TABLE>
Separate financial statements and supplemental schedules of
associated companies accounted for by the equity method are omitted in
accordance with the provisions of Rule 3-09 of Regulation S-X.
(2) EXHIBITS
(2.1) Agreement and Plan of Merger dated as of June 11, 1993, as
amended by the First Amendment dated as of August 12, 1993, by and among
the Company, Sphere, Inc. and Affiliated Publications, Inc. (filed as
Exhibit 2 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex I to the Joint Proxy
Statement/Prospectus included in such Registration Statement (schedules
omitted--the Company agrees to furnish a copy of any schedule to the
Commission upon request), and incorporated by reference herein).
(2.2) Stockholders Agreement dated as of June 11, 1993 by and
between the Company and the other parties signatory thereto (filed as
Exhibit 2.1 to the Form S-4 Registration Statement, Registration No.
33-50043, on August 23, 1993, and included as Annex II to the Joint
Proxy Statement/Prospectus included in such Registration Statement, and
incorporated by reference herein).
(3.1) Certificate of Incorporation as amended by the Class A and
Class B stockholders and as restated on September 29, 1993.
(3.2) By-laws as amended through February 17, 1994.
(4) The Company agrees to furnish to the Commission upon request a
copy of any instrument with respect to long-term debt of the Company and
any subsidiary for which consolidated or unconsolidated financial
statements are required to be filed, and for which the
14
<PAGE>
amount of securities authorized thereunder does not exceed 10% of the
total assets of the Company and its subsidiaries on a consolidated
basis.
(9.1) Globe Voting Trust Agreement, dated as of October 1, 1993.
(9.2) Jordan Voting Trust Agreement, dated as of January 29, 1987,
as amended through May 15, 1987 (filed as Exhibit 9.2 to API's Form 10-K
for fiscal year ended December 31, 1989, and incorporated by reference
herein).
(10.1) The Company's Executive Incentive Compensation Plan as
amended through December 20, 1990 (filed as an Exhibit to the Company's
Form 10-K dated March 1, 1991, and incorporated by reference herein).
(10.2) The Company's 1991 Executive Stock Incentive Plan, as
amended through April 13, 1993.
(10.3) The Company's 1991 Executive Cash Bonus Plan, adopted on
April 16, 1991 (filed as an Exhibit to the Company's Proxy Statement
dated March 1, 1991, and incorporated by reference herein).
(10.4) The Company's Non-Employee Directors' Stock Option Plan,
adopted on April 16, 1991 (filed as an Exhibit to the Company's Proxy
Statement dated March 1, 1991, and incorporated by reference herein).
(10.5) The Company's Supplemental Executive Retirement Plan as
amended through May 5, 1989 (filed as an Exhibit to the Company's Form
10-K dated March 29, 1990, and incorporated by reference herein).
(10.6) Lease (short form) between the Company and Z Edison Limited
Partnership dated April 8, 1987 (filed as an Exhibit to the Company's
Form 10-K dated March 27, 1988, and incorporated by reference herein).
(10.8) Agreement of Lease, dated as of December 15, 1993, between
The City of New York, Landlord, and the Company, Tenant (as successor to
New York City Economic Development Corporation (the "EDC"), pursuant to
an Assignment and Assumption of Lease With Consent, made as of December
15, 1993, between the EDC, as Assignor, to the Company, as Assignee).
(10.9) Funding Agreement #1, dated as of December 15, 1993, between
the EDC and the Company.
(10.10) Funding Agreement #2, dated as of December 15, 1993,
between the EDC and the Company.
(10.11) Funding Agreement #3, dated as of December 15, 1993,
between the EDC and the Company.
(10.12) Funding Agreement #4, dated as of December 15, 1993,
between the EDC and the Company.
(10.13) New York City Public Utility Service Power Service
Agreement, made as of May 3, 1993, between The City of New York, acting
by and through its Public Utility Service, and The New York Times
Newspaper Division of the Company.
(10.14) Employment Agreement, dated May 19, 1993, between API,
Globe Newspaper Company and William O. Taylor.
(10.15) API's 1989 Stock Option Plan (filed as Annex F-1 to API's
Proxy Statement-Joint Prospectus, dated as of April 28, 1989, contained
in API's Registration Statement on
15
<PAGE>
Form S-4 (Registration Statement No. 33-28373) declared effective April
28, 1989, and incorporated by reference herein).
(10.16) API's Supplemental Executive Retirement Plan, as amended
effective September 15, 1993.
(10.17) API's 1990 Stock Option Plan (Restated 1991) (filed as
Exhibit 1 to API's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1991 (Commission File No. 1-10251), and incorporated by
reference herein).
(10.18) Form of Substituted Stock Option Option Agreement/Incentive
86 among API, its predecessor company and certain employees (filed as
Exhibit 10.27 to Post-Effective Amendment No. 1 filed August 11, 1989,
to API's Registration Statement on Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
(10.19) Form of Substituted Stock Option Option Agreement/Incentive
87 among API, its predecessor company and certain employees (filed as
Exhibit 10.29 to Post-Effective Amendment No. 1 filed August 11, 1989,
to API's Registration Statement on Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
(10.20) Form of Substituted Stock Option Option Agreement/Incentive
88 among API, its predecessor company and certain employees (filed as
Exhibit 10.31 to Post-Effective Amendment No. 1 filed August 11, 1989,
to API's Registration Statement on Form S-4 (Registration Statement No.
33-28373) declared effective April 28, 1989, and incorporated by
reference herein).
(21) Subsidiaries of the Company.
(B) REPORTS ON FORM 8-K
During the quarter ended December 31, 1993, no reports on Form 8-K
were filed.
16
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Date: March 21, 1994
(Registrant)
THE NEW YORK TIMES COMPANY
By: LAURA J. CORWIN
.................................
Laura J. Corwin, Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE> <CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------------- -------------------------------------- --------------------
<S> <C> <C>
ARTHUR OCHS SULZBERGER Chairman (Chief March 21, 1994
(Arthur Ochs Sulzberger) Executive Officer),
Director
JOHN F. AKERS Director March 21, 1994
(John F. Akers)
FRANK R. GATTI Vice President, March 21, 1994
(Frank R. Gatti) Corporate Controller
(Principal Accounting
Officer)
RICHARD L. GELB Director March 21, 1994
(Richard L. Gelb)
LOUIS V. GERSTNER, JR. Director March 21, 1994
(Louis V. Gerstner, Jr.)
DAVID L. GORHAM Senior Vice President and Chief March 21, 1994
(David L. Gorham) Financial Officer (Principal
Financial Officer)
MARIAN S. HEISKELL Director March 21, 1994
(Marian S. Heiskell)
A. LEON HIGGINBOTHAM, JR. Director March 21, 1994
(A. Leon Higginbotham, Jr.)
RUTH S. HOLMBERG Director March 21, 1994
(Ruth S. Holmberg)
ROBERT A. LAWRENCE Director March 21, 1994
(Robert A. Lawrence)
WALTER E. MATTSON Director March 21, 1994
(Walter E. Mattson)
GEORGE B. MUNROE Director March 21, 1994
(George B. Munroe)
CHARLES H. PRICE II Director March 21, 1994
(Charles H. Price II)
LANCE R. PRIMIS President (Chief Operating Officer) March 21, 1994
(Lance R. Primis)
GEORGE L. SHINN Director March 21, 1994
(George L. Shinn)
DONALD M. STEWART Director March 21, 1994
(Donald M. Stewart)
JUDITH P. SULZBERGER Director March 21, 1994
(Judith P. Sulzberger)
WILLIAM O. TAYLOR Director March 21, 1994
(William O. Taylor)
CYRUS R. VANCE Director March 21, 1994
(Cyrus R. Vance)
</TABLE>
17
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
THE NEW YORK TIMES COMPANY:
We consent to the incorporation by reference in Registration Statements No.
2-91826, 33-31538, 33-43210, 33-43211, 33-50461, 33-50465, 33-50457, 33-50467
and 33-50459 on Forms S-8 of our report dated February 10, 1994, appearing in
this Annual Report on Form 10-K of The New York Times Company (the "Company")
for the year ended December 31, 1993.
We also consent to the Company extending the reference to us under the
heading "Experts" in Registration Statement No. 33-31538 to comprehend our
report, dated February 10, 1994, on the consolidated balance sheets of the
Company as of December 31, 1993 and 1992, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1993 included in the aforementioned
Form 10-K.
DELOITTE & TOUCHE
New York, New York
March 21, 1994
18
<PAGE>
THE NEW YORK TIMES COMPANY
1993 Consolidated Financial Statements
- ----------------------------------------------------------------------
Contents Page
- ----------------------------------------------------------------------
Financial Highlights F-1
Segment Information F-2
Management's Discussion and Analysis F-4
Consolidated Statements of Operations F-8
Consolidated Balance Sheets F-9
Consolidated Statements of Cash Flows F-11
Consolidated Statements of Stockholders' Equity F-13
Notes to Consolidated Financial Statements F-14
Independent Auditors' Report F-26
Management's Responsibilities Report F-26
Market Information F-26
Quarterly Information F-27
Ten-Year Supplemental Financial Data F-28
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE><CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Dollars in thousands except per share data Year Ended December 31
1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES AND INCOME
Revenues $2,019,654 $1,773,535 $1,703,101 $1,776,761 $1,768,893
Operating profit 126,581 88,408 93,639 129,779 169,044
Income from continuing operations before income
taxes and equity in operations of forest
products group 101,206 8,525 63,053 110,190 148,364
Income (Loss) from continuing operations before
equity in operations of forest products group 57,975 (2,554) 41,293 60,871 84,097
Equity in operations of forest products group (51,852) (8,718) 5,700 3,965 (15,922)
Income (Loss) from continuing operations before
net cumulative effect of accounting changes 6,123 (11,272) 46,993 64,836 68,175
Income from discontinued operations, net of taxes - - - - 198,448
Net cumulative effect of accounting changes - (33,437) - - -
Net income (loss) 6,123 (44,709) 46,993 64,836 266,623
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Property, plant and equipment - net 1,112,024 902,755 966,593 1,013,430 972,474
Total assets 3,215,204 1,994,974 2,127,981 2,149,623 2,187,520
Long-term debt and capital lease obligations 460,063 206,911 213,487 319,449 337,417
Common stockholders' equity 1,598,883 999,630 1,073,442 1,055,785 1,064,446
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Continuing operations before net cumulative
effect of accounting changes .07 (.14) .61 .85 .87
Discontinued operations - - - - 2.52
Net cumulative effect of accounting changes - (.43) - - -
Net income (loss) .07 (.57) .61 .85 3.39
Dividends .56 .56 .56 .54 .50
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63
- --------------------------------------------------------------------------------------------------------------------
KEY RATIOS (See notes below)
Operating profit to revenues 6% 5% 5% 7% 10%
Income from continuing operations before equity in
operations of forest products group to revenues 3% 2% 2% 3% 5%
Return on average stockholders' equity - 2% 4% 6% 27%
Return on average total assets - 1% 2% 3% 13%
Long-term debt and capital lease obligations to
total capitalization 22% 17% 17% 23% 24%
Current assets to current liabilities .89 1.08 .89 .81 .86
- --------------------------------------------------------------------------------------------------------------------
EMPLOYEES 13,000 10,100 10,100 10,400 10,600
- --------------------------------------------------------------------------------------------------------------------
Amounts for 1993 have been affected by the October 1, 1993 acquisition of The Boston Globe (see Note 2).
</TABLE>
In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold the
residual assets. The closing and related sale resulted in a pre-tax loss of
$53.8 million ($37.1 million after taxes or $.47 per share). This transaction
is not reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
Net cumulative effect of accounting changes reflects the 1992 adoption of the
change in methods of accounting for income taxes, postretirement benefits other
than pensions and postemployment benefits. The net cumulative effect is not
reflected in the 1992 income amounts used in the applicable key ratio
calculations presented above.
For 1993, return on average stockholders' equity and return on average total
assets are less than 1 percent due to several factors which lowered net income
for the year. See Management's Discussion and Analysis on page F-4.
F-1
<PAGE>
SEGMENT INFORMATION
- ------------------------------------------------------------------------------
The Company has classified its business into the following segments and equity
interests:
NEWSPAPERS: The New York Times, The Boston Globe, 28 regional newspapers, a
wholesale newspaper distribution business in the New York City metropolitan
area and a one-half interest in the International Herald Tribune S.A.
MAGAZINES: Numerous publications and related activities in the women's
publishing and sports/leisure fields.
BROADCASTING/INFORMATION SERVICES: Five network-affiliated television stations,
two radio stations, a news service, a features syndicate, TimesFax and licensing
operations of The New York Times databases and microfilm.
FOREST PRODUCTS: Equity interests in two newsprint companies and a partnership
in a supercalendered paper mill that together supply the major portion of the
Newspaper Group's annual paper requirements.
- -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- -------------------------------------------------------------------------------
REVENUES
Newspapers $1,537,934 $1,306,952 $1,274,435
Magazines 394,463 386,120 352,686
Broadcasting/Information services 87,257 80,463 75,980
- -------------------------------------------------------------------------------
Total $2,019,654 $1,773,535 $1,703,101
- -------------------------------------------------------------------------------
OPERATING PROFIT (LOSS)
Newspapers $ 114,332 $ 81,173 $ 93,578
Magazines 12,330 9,929 (492)
Broadcasting/Information services 19,403 14,766 13,957
Unallocated corporate expenses (19,484) (17,460) (13,404)
- -------------------------------------------------------------------------------
Total 126,581 88,408 93,639
Interest expense, net of interest income 25,375 26,115 30,586
Loss on disposition of Gwinnett Daily News - 53,768 -
- -------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 101,206 8,525 63,053
Income taxes 43,231 11,079 21,760
- -------------------------------------------------------------------------------
Income (Loss) before equity in
operations of forest products group 57,975 (2,554) 41,293
Equity in operations of forest products
group (51,852) (8,718) 5,700
- -------------------------------------------------------------------------------
INCOME (LOSS) BEFORE NET CUMULATIVE
EFFECT OF ACCOUNTING CHANGES $ 6,123 $ (11,272) $ 46,993
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-2
<PAGE>
SEGMENT INFORMATION
- -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- -------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspapers $ 98,957 $ 74,495 $ 77,090
Magazines 18,616 20,628 26,683
Broadcasting/Information services 10,731 12,424 12,621
Corporate 528 385 446
- -------------------------------------------------------------------------------
Total $ 128,832 $ 107,932 $ 116,840
- -------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspapers $ 71,746 $ 42,675 $ 21,867
Magazines 3,059 1,888 1,467
Broadcasting/Information services 3,323 1,863 2,697
Corporate 1,491 903 169
- -------------------------------------------------------------------------------
Total $ 79,619 $ 47,329 $ 26,200
- -------------------------------------------------------------------------------
IDENTIFIABLE ASSETS AT DECEMBER 31
Newspapers $2,676,779 $1,321,667 $1,444,462
Magazines 247,723 255,777 272,323
Broadcasting/Information services 113,675 117,679 122,436
Corporate 101,007 160,459 125,760
Investment in forest products group 76,020 139,392 163,000
- -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974 $2,127,981
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
Newspaper Group amounts for 1993 have been affected by the October 1, 1993
acquisition of The Boston Globe (see Note 2).
Newspaper Group operating profit for 1993, 1992 and 1991 includes charges of
$35.4 million, $28.0 million and $20.0 million, respectively, for costs related
to staff reductions at The New York Times newspaper.
Equity in operations of Forest Products Group and investment in Forest Products
Group for 1993 reflect an after-tax noncash charge of $47.0 million to write
down the Company's investment in this Group to reflect current operating
conditions and economic factors in the industry.
Newspaper Group operating results for 1992 were negatively affected by $21.4
million for labor disruptions and training and start-up costs related to the new
production and distribution facility located in Edison, New Jersey ("Edison")
for The New York Times newspaper.
F-3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
- -------------------------------------------------------------------------------
Per share amounts in the following Management's Discussion and Analysis are
computed on an after-tax basis.
Results of Operations: 1993 Compared with 1992
In 1993, the Company reported net income of $6.1 million, or $.07 per share
compared with a net loss of $44.7 million, or $.57 per share, in 1992.
Earnings for 1993 were affected by the following factors:
- $47.0 million after-tax charge ($.56 per share) against equity in
operations of the Forest Products Group to write down the
Company's investment in the Group to reflect current operating
conditions and economic factors in the industry.
- $30.0 million pre-tax charge ($.20 per share) to cover severance
and related costs resulting from anticipated white-collar staff
reductions at The New York Times newspaper ("The Times").
- $5.4 million pre-tax charge ($.03 per share) to cover severance
and related costs resulting from voluntary early retirements from
the composing room of The Times.
- $2.6 million pre-tax gain ($.02 per share) on the sale of assets.
- $5.6 million tax expense ($.07 per share) due to the enactment of
the Omnibus Budget Reconciliation Act of 1993 ("Tax Act") which
increased the Federal corporate income tax rate from 34 percent
to 35 percent retroactively to January 1, 1993, affected the
deductibility of certain costs and caused the Company to
remeasure its year-end 1992 deferred tax balances to reflect the
higher tax rate.
- $3.7 million pre-tax ($.02 per share) in unfavorable advertising
and circulation rate adjustments due to a snowstorm in March that
disrupted delivery of The Times.
Earnings for 1992 were affected by the following factors:
- $33.4 million after-tax charge ($.43 per share) for the adoption
as of January 1, 1992, of three mandated non-cash accounting
changes related to income taxes, postretirement benefits and
postemployment benefits.
- $3.1 million pre-tax gain ($.02 per share) on the sales of
assets.
- $28.0 million pre-tax charge ($.20 per share) to cover severance
and related costs for production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) due to the closing of
The Gwinnett (Ga.) Daily News, the sale of its residual assets
and its 1992 operations.
- $10.4 million pre-tax ($.07 per share) for training and start-up
costs related to The Times's new production and distribution
facility located in Edison, N.J. ("Edison").
- $11.0 million pre-tax ($.08 per share) due to labor disruptions
arising from a dispute between independent distributors of The
Times and its Drivers' Union.
Exclusive of the factors described above for the 1993 and 1992 periods,
earnings would have been $.93 per share in 1993 compared with $.66 per share in
1992.
Consolidated revenues for 1993 increased to $2.02 billion from $1.77 billion
in 1992, due principally to the October 1, 1993 acquisition of The Boston Globe
("The Globe"), the June 1992 acquisition of two wholesale newspaper distribution
businesses and higher advertising and circulation revenues. Costs and expenses
after excluding special items increased to $1.86 billion from $1.64 billion in
1992. The increase was due principally to the October 1993 Globe acquisition,
the June 1992 wholesale distribution business acquisition and higher newsprint,
depreciation, and payroll and benefit costs.
Operating profit after excluding the special factors rose to $163.1 million
from $134.7 million in 1992 due principally to higher advertising and
circulation revenues in the Newspaper Group, which included the operations of
The Globe subsequent to October 1, 1993 and a strong performance by the
Company's television stations which was partially offset by higher newsprint
prices and increased depreciation.
Interest expense, net of interest income, declined to $25.4 million in 1993
from $26.1 million in 1992. Lower levels of borrowings through the first half
of 1993 were partially offset by increased borrowings in connection with the
Company's stock repurchase program (see Note 13) and the utilization of cash
balances in connection with the October 1, 1993 acquisition of The Globe.
The Company's effective income tax rate for 1993 was 42.7 percent compared
with 44.5 percent in 1992, exclusive of the effect of the Gwinnett transaction.
The lower rate is due principally to the recognition of capital loss
carryforwards and state operating loss carryforwards, which were partially
offset by the negative impact of the Tax Act.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($36.5 million in 1993 and $47.9
million in 1992), operating profit of the Newspaper Group was $150.8 million
compared with $129.1 million in 1992 on revenues of $1.54 billion and $1.31
billion respectively. Improvements in revenues were due to higher advertising
and circulation rates, principally at The Times, the June 1992 acquisition of
two wholesale newspaper distribution businesses and the October 1, 1993
acquisition of The Globe. The higher operating profit results principally
from the inclusion of the results of The Globe since the October 1, 1993
acquisition date, higher advertising and circulation revenues, cost controls
throughout the Group and cost savings related to Edison, which were partially
offset by advertising weakness at the Company's two California regional
newspapers, increased depreciation and start-up and redesign costs related to
certain sections of The Times.
F-4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- -------------------------------------------------------------------------------
Advertising linage at The Times increased 1.0 percent over 1992 to 77.8
million lines. Retail advertising rose 4.9 percent over 1992 while national and
classified advertising declined 2.4 percent and 4.1 percent respectively.
Circulation of The Times for the year ended December 31, 1993 was 1,179,000
copies weekdays, approximately equal to the 1992 period. Sunday circulation of
1,781,200 copies reached a record high, up 17,100 copies over the prior year.
At The Globe, full-run advertising volume for the year 1993 increased 4.0
percent over 1992 to 2.5 million inches. Retail and classified advertising
increased 9.9 percent and 2.6 percent, respectively, over 1992, but national
advertising declined 1.6 percent. Circulation of The Globe for the year ended
December 31, 1993 was 504,600 copies weekdays, down 3,300 copies, and 814,500
copies Sundays, up 2,700 copies.
At the 30 regional newspapers that were in the Group for the entire 1993 and
1992 periods (two weekly newspapers were sold at the end of 1993), advertising
volume increased 3.9 percent to 35.2 million inches. The 1993 amount includes a
significantly higher volume of advertising inserts. Circulation for the daily
regional newspapers for the year ended December 31, 1993 was 851,000 copies
weekdays, up 4,500 copies, and 853,700 copies Sundays, up 9,200 copies.
Circulation for the non-dailies was 72,700 copies, down 500 copies.
The Magazine Group's operating profit was $12.3 million in 1993 compared with
$9.9 million in 1992 on revenues of $394.5 million and $386.1 million
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), the Group's operating profit was
$25.4 million in both years. Results for 1993 were adversely affected by an
August 1993 lawsuit settlement of $1.5 million. In addition, continuing
softness in the consumer packaged goods category in the women's magazines field
continues to affect the Group adversely.
Advertising pages as reported to Publications Information Bureau ("PIB") for
Golf Digest increased 1 percent from 1992 to 1,344 pages; for Tennis increased 4
percent from 1992 to 795 pages; for Family Circle decreased 9 percent from 1992
to 1,570 pages, and for McCall's decreased 5 percent from 1992 to 1,138 pages.
The Broadcasting/Information Services Group operating profit was $19.4 million
compared with $14.8 million in 1992 on revenues of $87.3 million and $80.5
million respectively. Higher local advertising revenues at the Company's
television stations accounted for the improved results.
Exclusive of the $47.0 million noncash charge to write down the Company's
investment in its Forest Products Group, equity in operations (an after-tax
amount) of the Group was a loss of $4.9 million compared with a loss of $8.7
million in 1992. The 1993 results have been adversely affected by $0.6 million
resulting from the impact of the Tax Act. Lower newsprint discounts and a
favorable Canadian exchange rate accounted for the improved results. Higher
newsprint discounts which were effective October 1, 1993 negatively affected the
Group during the fourth quarter and into 1994.
The Forest Products Group write-down resulted principally from the softening
of paper prices due to continuing oversupply, as well as high costs and
projected environmental expenditures at one mill.
All of the Company's paper mills were affected by pricing difficulties in
1993. Newsprint prices showed some strengthening during the second and third
quarters but they resumed their decline in October and were at their lowest
point at year-end. This trend continued into the first quarter of 1994 as
prices fell further in January. A modest March 1, 1994, newsprint price
increase has been announced throughout the industry. However, other recently
announced increases have not become effective because of oversupply, and it is
uncertain whether this increase will be realized. In addition to pricing
difficulties, one of the Company's two newsprint mills has been unable to fully
overcome high cost disadvantages. This mill also requires a capital expenditure
(estimated to be $25.0 million) to comply with environmental regulations which
become effective in 1995. This expenditure, if it is made, will not lower the
mill's costs.
In measuring the write-down, the Company projected the future cash flows of
the mills, including the required capital expenditure, and determined that the
value of those cash flows was less than the carrying value of its investment in
the Forest Products Group. Due in part to this write-down, the Company
currently expects to report an improvement in 1994 equity operations since it
will not be recording operating losses for one of its mills.
- -------------------------------------------------------------------------------
Results of Operations: 1992 Compared with 1991
In 1992, the Company reported a net loss of $44.7 million, or $.57 per share,
compared with net income of $47.0 million, or $.61 per share, in 1991. The 1992
year was adversely affected by $33.4 million, or $.43 per share, resulting from
the net cumulative effect of adopting three mandated noncash accounting changes
related to postretirement and postemployment benefits (see Note 11) and income
taxes (see Note 7) as of January 1, 1992.
Exclusive of the net cumulative effect of the accounting changes, the net loss
for 1992 was $11.3 million or $.14 per share. Earnings for 1992 and 1991 have
also been affected by the following factors:
- $3.1 million pre-tax gains ($.02 per share) in 1992 on the sale
of assets.
- $28.0 million pre-tax charge ($.20 per share) in 1992 to cover
severance and related costs resulting from labor agreements for
various production unions at The Times.
- $53.8 million pre-tax loss ($.47 per share) in 1992 due to the
closing of The Gwinnett (Ga.) Daily News, the sale of its
residual assets and its 1992 operations.
F-5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
- ------------------------------------------------------------------------------
- $10.4 million pre-tax ($.07 per share) in 1992 for training and
start-up costs related to commencement of operations at Edison.
- $11.0 million pre-tax ($.08 per share) in 1992 due to labor
disruptions arising from a dispute between inde-pendent
distributors of The Times and its Drivers' Union.
- $7.8 million pre-tax ($.05 per share) in 1992 for the annual
charge related to postretirement benefits.
- $20.0 million pre-tax charge ($.15 per share) in 1991 to cover
severance and related costs resulting from a voluntary early
retirement program for 160 employees, mainly Newspaper Guild at
The Times.
- $10.0 million ($.13 per share) in 1991 for the reversal of a
provision for income taxes which related to a settlement with the
Internal Revenue Service for tax years 1980 through 1984.
Exclusive of these factors, 1992 earnings would have been $.71 per share
compared with $.63 per share for 1991.
Excluding the factors mentioned above, the principal reason for the increase
in net income is higher advertising and circulation revenues in the Newspaper
and Magazine Groups and lower newsprint costs due to increased price discounting
offset, in part, by the adverse effect such discounting had on equity in
earnings of the Forest Products Group.
Consolidated revenues increased to $1.77 billion from $1.70 billion in 1991.
The increase was due principally to higher advertising rates, higher
circulation revenues in the Newspaper and Magazine Groups and the June 1992
acquisition of two wholesale newspaper distribution businesses, which distribute
The Times and other publications in New York City and parts of New Jersey.
Excluding the special factors, costs and expenses increased to $1.63 billion
in 1992 from $1.59 billion in 1991 due principally to higher payroll and benefit
costs and operating expenses of two wholesale distribution businesses acquired
in June 1992 offset, in part, by lower newsprint prices.
Interest expense, net of interest income, declined to $26.1 million compared
with $30.6 million in 1991 due to lower levels of borrowings.
The nondeductibility of a portion of the loss on the closedown and sale of The
Gwinnett (Ga.) Daily News significantly increased the Company's tax rate.
Exclusive of the Gwinnett transaction and the 1991 favorable IRS settlement, the
effective income tax rate in 1992 declined to 44.5 percent compared with 50.4
percent in 1991. The lower rate is due principally to a decrease in the
relationship of amortization expense for intangible assets to 1992's pre-tax
income, which was significantly higher than that of 1991.
A discussion of the operating results of the Company's segments and equity
interests follows:
Exclusive of the special pre-tax items ($47.9 million in 1992 and $20.0
million in 1991), operating profit of the Newspaper Group increased to $129.1
million in 1992 from $113.6 million in 1991 on revenues of $1.31 billion and
$1.27 billion respectively.
Improvements in revenues and operating profit were due to higher advertising
and circulation rates and increased circulation. Lower newsprint costs also
favorably affected the Group. The June 1992 acquisition of wholesale newspaper
distribution businesses also increased the Group's revenues.
Advertising linage at The Times declined 2.0 percent to 77.0 million lines
compared with 1991. Retail advertising was flat compared with 1991 and national
advertising rose 0.9 percent. However, classified advertising declined 10.5
percent from last year. Circulation of The Times for the year ended December
31, 1992, reached record highs. Circulation was 1,181,500 copies weekdays and
1,763,800 copies Sundays, up 21,600 copies and 29,800 copies, respectively, over
the prior year.
Depreciation of the building portion of Edison amounted to $14.0 million per
year beginning in 1990. Depreciation of the facility's equipment has begun and
will increase as each element is placed in service. Production commenced in
September 1992 and depreciation of related equipment began in the fourth
quarter.
Full operation of the facility began during the first quarter of 1993. The
Company estimates that depreciation of the building and equipment will total
$33.0 million in 1993 increasing to $35.0 million in 1994 when the facility is
operational for a full year.
At the 30 regional newspapers that were in the Group for the entire 1992 and
1991 periods, advertising volume increased 2.5 percent to 33.8 million inches.
The 1992 amount includes a significantly higher volume of advertising inserts.
Circulation for the daily regional newspapers for the year ended December 31,
1992, was 844,500 copies Sundays, up 13,800 copies, and 846,500 copies weekdays,
up 10,400 copies. Circulation for the non-dailies was 73,200 copies, up 3,100
copies.
The Magazine Group's operating profit was $9.9 million in 1992 compared with a
loss of $0.5 million in 1991 on revenues of $386.1 million and $352.7 million
respectively. Exclusive of the amortization costs associated with the
acquisitions of McCall's and Golf World (U.S.), which were structured to
maximize cash flow, the Group's operating profit was $25.4 million in 1992
compared with $21.2 million in 1991. The better 1992 results were primarily due
to increased advertising pages at most of the Group's magazines and lower
magazine paper prices. Most of the Group's magazines increased their market
share compared with 1991.
Advertising pages as reported to PIB for Golf Digest increased 10 percent from
1991 to 1,332 pages; for Tennis increased 4 percent from 1991 to 768 pages; for
Family Circle increased 12 percent from 1991 to 1,723 pages, and for McCall's
increased 11 percent from 1991 to 1,201 pages.
Broadcasting/Information Services Group operating profit was $14.8 million in
1992 compared with $14.0 million in 1991 on revenues of $80.5 million and $76.0
million respectively. The higher operating profit was due to higher local
advertising revenues at the Company's television stations offset, in part, by
costs related to a format change for the AM radio station WQEW, formerly WQXR-
AM.
Equity in operations of the Forest Products Group (an after-tax amount) was a
loss of $8.7 million compared with income of $5.7 million in 1991. Higher paper
discounts due to oversupply continue to have a negative impact.
F-6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONCLUDED)
- -------------------------------------------------------------------------------
Liquidity and Capital Resources
Net cash provided by operating activities of $175.3 million was used primarily
to modernize facilities and equipment, to pay dividends to stockholders, to
repurchase shares of the Company's Class A Common Stock and, in part, to
purchase The Globe. The ratio of current assets to current liabilities was 0.89
at December 31, 1993 compared with 1.08 at December 31, 1992, and long-term debt
and capital lease obligations as a percentage of total capitalization was 22
percent at December 31, 1993 compared with 17 percent at December 31,1992. The
increase was due principally to the impact of the Company's stock repurchase
program discussed below, which was partially offset by the acquisition of The
Globe on October 1, 1993.
In October 1993, the Company announced authorized expenditures of up to $150.0
million for repurchases of its Class A Common Stock. Under the program,
purchases may be made from time to time either in the open market or through
private transactions. The number of shares that may be purchased in market
transactions may be limited as a result of The Globe transaction. Purchases may
be suspended from time to time or discontinued. To date the Company has
repurchased approximately 30,000 shares of its Class A Common Stock at an
average price of $24.78 per share under this program.
Under a previously announced program that expired at the close of The Globe
transaction, the Company expended approximately $254.0 million. Under this
program, the Company repurchased approximately 10,231,000 shares of its Class A
Common Stock at an average price of $24.87 per share.
In December 1993 the Company and the City of New York executed a lease
agreement and related agreements, under which the Company will lease 31 acres of
City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility. The Company estimates that the
cost of the new facility will be approximately $280.0 million with construction
to begin in the summer of 1994 and completion expected in 1997. Construction of
the facility is subject to approval of the Company's Board of Directors.
The Company currently estimates that, exclusive of the Queens facility,
capital expenditures for 1994 will range from $90.0 million to $110.0 million.
In connection with the 1991 divestiture of a jointly-owned affiliate, Spruce
Falls Power and Paper Company Limited, the Company committed to lend up to $26.5
million (C$30.0 million) to the new owners of the mill. Such loans will take
place over a five-year period ending December 1996. To date the Company has
loaned approximately U.S. $20.5 million under the commitment.
In October 1993 the Company issued notes totaling $200.0 million to an
insurance company with interest payable semi-annually. $100.0 million of five-
year notes were issued at a rate of 5.50 percent, and the remaining $100.0
million were issued as six and one-half year notes at a rate of 5.77 percent.
In connection with the previously announced charges totaling $35.4 million for
white-collar and production union staff reductions (see Note 4), the Company
currently anticipates that the staff reductions and related expenditures will
occur during 1994 and that the cost of this program will be recovered through
reduced costs over a two-year period. The charges cover approximately 300
employees with an average annual wage and benefit cost of $110,000 per employee.
The Company does not anticipate that its ongoing business operations will be
affected by this reduction of staff and expects to fund this charge through
internally generated funds.
In January 1994 a definitive agreement was reached regarding the sale of a
partnership (BPI Communications, L.P.) in which the Company has a one-third
interest. In February 1994, the Company received approximately $53.0 million,
which will primarily be utilized to repay notes payable, which totaled $62.3
million at December 31, 1993.
In addition to cash provided from operating activities, the Company has
several established sources for future liquidity purposes, including several
revolving credit and term loan agreements. At December 31, 1993, $150.0 million
was available for borrowing by the Company under these agreements. The Company
anticipates that during 1994 cash for operating, investing and financing
activities will continue to come from a combination of internally generated
funds and external financing.
F-7
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
Dollars and shares in thousands except Year Ended December 31
per share data 1993 1992 1991
- -------------------------------------------------------------------------------
REVENUES
Advertising $1,399,042 $1,254,764 $1,254,365
Circulation 473,971 419,454 390,600
Other 146,641 99,317 58,136
- -------------------------------------------------------------------------------
Total 2,019,654 1,773,535 1,703,101
- -------------------------------------------------------------------------------
COSTS AND EXPENSES
Production costs:
Raw materials 280,531 250,575 288,618
Wages and benefits 437,528 388,403 361,660
Other 418,554 365,651 341,105
- -------------------------------------------------------------------------------
Total 1,136,613 1,004,629 991,383
Selling, general and administrative
expenses 756,460 680,498 618,079
- -------------------------------------------------------------------------------
Total 1,893,073 1,685,127 1,609,462
- -------------------------------------------------------------------------------
OPERATING PROFIT 126,581 88,408 93,639
Interest expense, net of interest income 25,375 26,115 30,586
Loss on disposition of Gwinnett Daily News - 53,768 -
- -------------------------------------------------------------------------------
Income before income taxes and equity
in operations of forest products group 101,206 8,525 63,053
Income taxes 43,231 11,079 21,760
- -------------------------------------------------------------------------------
Income (Loss) before equity in operations
of forest products group 57,975 (2,554) 41,293
Equity in operations of forest products
group (51,852) (8,718) 5,700
- -------------------------------------------------------------------------------
Income (Loss) before net cumulative
effect of accounting changes 6,123 (11,272) 46,993
Net cumulative effect of accounting
changes - (33,437) -
- -------------------------------------------------------------------------------
NET INCOME (LOSS) $ 6,123 $ (44,709) $ 46,993
- -------------------------------------------------------------------------------
Average number of common shares
outstanding 84,459 78,534 77,299
Per share of common stock
Before net cumulative effect of
accounting changes $ .07 $ (.14) $ .61
Net cumulative effect of accounting
changes - (.43) -
Net income (loss) .07 (.57) .61
Dividends .56 .56 .56
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-8
<PAGE>
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------
December 31
1993 1992
- -------------------------------------------------------------------------------
ASSETS Dollars in thousands
- -------------------------------------------------------------------------------
CURRENT ASSETS
Cash and short-term investments (at cost which
approximates market:
1993, $27,744,000; 1992, $91,685,000) $ 42,058 $ 118,503
Accounts receivable (net of allowances: 1993,
$43,507,000; 1992, $33,300,000) 264,218 192,233
Inventories 47,271 51,551
Deferred subscription costs 32,597 32,830
Other current assets 107,009 37,661
- -------------------------------------------------------------------------------
Total current assets 493,153 432,778
- -------------------------------------------------------------------------------
INVESTMENT IN FOREST PRODUCTS GROUP 76,020 139,392
- -------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT (at cost)
Land 65,839 61,961
Buildings, building equipment and improvements 650,186 597,597
Equipment 874,479 751,186
Construction and equipment installations in progress 93,007 47,842
- -------------------------------------------------------------------------------
Total 1,683,511 1,458,586
Less accumulated depreciation 571,487 555,831
- -------------------------------------------------------------------------------
Total property, plant and equipment - net 1,112,024 902,755
- -------------------------------------------------------------------------------
INTANGIBLE ASSETS ACQUIRED
Costs in excess of net assets acquired 1,383,582 554,014
Other intangible assets acquired 227,377 63,200
- -------------------------------------------------------------------------------
Total 1,610,959 617,214
Less accumulated amortization 190,006 160,991
- -------------------------------------------------------------------------------
Total intangible assets acquired - net 1,420,953 456,223
- -------------------------------------------------------------------------------
MISCELLANEOUS ASSETS 113,054 63,826
- -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-9
<PAGE>
- -------------------------------------------------------------------------------
December 31
1993 1992
- -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY Dollars in thousands
- -------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 115,402 $ 139,115
Notes payable 62,340 -
Payrolls 71,256 47,820
Accrued expenses 171,515 90,063
Unexpired subscriptions 130,627 119,508
Short-term debt 2,590 2,643
- -------------------------------------------------------------------------------
Total current liabilities 553,730 399,149
- -------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt 413,581 158,131
Capital lease obligations 46,482 48,780
Deferred income taxes 196,875 187,701
Other 403,869 199,799
- -------------------------------------------------------------------------------
Total other liabilities 1,060,807 594,411
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
5 1/2% Cumulative prior preference stock of $100 par
value - authorized 110,000 shares; outstanding:
1993 and 1992, 17,837 shares 1,784 1,784
Serial preferred stock of $1 par value - authorized
200,000 shares - none issued - -
Common stock of $.10 par value
Class A - authorized 200,000,000 shares; issued:
1993, 107,678,024 shares; 1992, 88,047,623 shares
(including treasury shares: 1993, 1,251,573; 1992,
8,773,419) 10,768 8,805
Class B, convertible - authorized 600,000 shares;
issued: 1993, 571,624 shares; 1992, 571,804
(including treasury shares: 1993 and 1992,
139,943) 57 57
Additional capital 599,758 164,928
Earnings reinvested in the business 1,022,958 1,065,347
Common stock held in treasury, at cost (34,658) (239,507)
- -------------------------------------------------------------------------------
Total stockholders' equity 1,600,667 1,001,414
- -------------------------------------------------------------------------------
Total $3,215,204 $1,994,974
- -------------------------------------------------------------------------------
See notes to consolidated financial statements.
F-10
<PAGE>
<TABLE><CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH PROVIDED (USED):
OPERATING ACTIVITIES
Income (loss) before net cumulative effect of accounting changes $ 6,123 $ (11,272) $ 46,993
Adjustments to reconcile income (loss) before net cumulative effect of
accounting changes to net cash provided by operating activities
Depreciation 89,274 69,880 72,441
Amortization 39,558 38,052 44,399
Equity in operations of forest products group - net 52,311 943 (6,406)
Cash distributions and dividends from forest products group - 6,775 775
Loss on closing and disposition of Gwinnett Daily News - 53,768 -
Deferred income taxes (37,901) (18,216) 8,729
(Increase) Decrease in receivables - net (21,636) 430 (2,375)
Decrease (Increase) in inventories 10,799 (10,707) 5,471
Decrease (Increase) in deferred subscription costs and other current assets 4,749 1,078 (13,963)
(Decrease) Increase in accounts payable (41,429) 15,216 9,120
Increase (Decrease) in payrolls and accrued expenses 46,758 (12,474) 9,377
Increase in unexpired subscriptions 11,196 4,342 6,666
Other - net 15,491 290 4,944
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 175,293 138,105 186,171
- --------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Businesses acquired, net of cash acquired (134,384) (23,091) -
Proceeds on sale of residual assets of Gwinnett Daily News - 68,000 -
Additions to property, plant and equipment (75,738) (47,068) (39,708)
Purchases of marketable securities (65,077) - -
Proceeds from sales of marketable securities 65,077 - -
Decrease in investment in forest products group - - 46,234
Loans to former affiliate (15,000) - (5,000)
Other investing proceeds 944 4,985 1,495
Other investing payments (1,986) (8,629) (16,354)
- --------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (226,164) (5,803) (13,333)
- --------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Short-term borrowing - net 62,340 - (11,971)
Long-term obligations and notes payable
Increase 200,000 - 76,963
Reduction (5,510) (63,847) (167,477)
Capital shares
Issuance 19,894 19,785 15,121
Repurchase (255,222) - (9)
Dividends paid to stockholders (47,076) (54,935) (32,580)
- --------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (25,574) (98,997) (119,953)
- --------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in Cash and short-term investments (76,445) 33,305 52,885
Cash and short-term investments at the beginning of the year 118,503 85,198 32,313
- --------------------------------------------------------------------------------------------------------------------
Cash and short-term investments at the end of the year $ 42,058 $ 118,503 $ 85,198
- --------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements and supplemental disclosures to consolidated statements of cash flows.
</TABLE>
F-11
<PAGE>
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
Dollars in thousands Year Ended December 31
1993 1992 1991
- -------------------------------------------------------------------------------
NONCASH INVESTING AND FINANCING
TRANSACTIONS
Capital lease assets and obligations
incurred $ 338 $ 668 $ 311
========== ========== ==========
Businesses acquired
Fair value of assets acquired $1,237,029 $ 34,462
Liabilities assumed (209,000) (11,371)
Liabilities incurred, net of
payments (18,744) -
Common stock issued (874,901) -
--------- ----------
Net cash paid $ 134,384 $ 23,091
========= ==========
Valuation reserve (investment in
forest products group) $ (26,927)
==========
CASH FLOW INFORMATION
Cash payments during the year for
Interest (net of amount capitalized) $ 26,861 $ 28,486 $ 31,367
========= ======== =========
Income taxes $ 55,327 $ 36,776 $ 25,620
========= ======== =========
- -------------------------------------------------------------------------------
F-12
<PAGE>
<TABLE><CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
except per share data Capital Stock Common
5 1/2% Class A Class B Earnings Stock
Preference Common Common Reinvested Held in
Additional in the Treasury
Capital Business at cost
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1991 $1,798 $ 8,755 $58 $178,826 $1,157,045 $(288,899)
- ------------------------------------------------------------------------------------------------------------------------
Net income 46,993
- ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,306)
- ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 26,544 Class A
shares from treasury 348 370
Employee stock purchase plan - 1,041,858
Class A shares 1 (2,062) 16,978
Stock options - 95,125 Class A shares 13 963 (891)
Stock conversions - 8,572 shares 1 (1)
- ------------------------------------------------------------------------------------------------------------------------
Purchase of company stock -
143 preference shares (14) 5
- ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,657)
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1991 1,784 8,770 57 178,080 1,158,977 (272,442)
- ------------------------------------------------------------------------------------------------------------------------
Net loss (44,709)
- ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (43,987)
- ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
Retirement units, etc. - 19,576 Class A
shares from treasury (491) 524
Employee stock purchase plan - 1,069,743
Class A shares 1 (16,432) 34,311
Stock options - 252,435 Class A shares 34 3,771 (1,900)
Stock conversions - 600 shares - -
- ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (4,836)
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1992 1,784 8,805 57 164,928 1,065,347 (239,507)
- ------------------------------------------------------------------------------------------------------------------------
Net income 6,123
- ------------------------------------------------------------------------------------------------------------------------
Dividends, preference - $5.50 per share (98)
Dividends, common - $.56 per share (47,003)
- ------------------------------------------------------------------------------------------------------------------------
Issuance of shares:
The Globe acquisition - 36,397,313
Class A shares 1,940 432,624 440,337
Retirement units, etc. 10,877 Class A
shares from treasury 123 339
Employee stock purchase plan - 819,166
Class A shares (2,612) 20,329
Stock options - 185,611 Class A shares 23 4,695 (934)
Stock conversions - 180 shares - -
- ------------------------------------------------------------------------------------------------------------------------
Purchase of company stock - 10,260,900
Class A shares (255,222)
- ------------------------------------------------------------------------------------------------------------------------
Foreign currency translation (1,411)
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1993 $1,784 $10,768 $57 $599,758 $1,022,958 $ (34,658)
- ------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
</TABLE>
F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The consolidated financial statements include the
accounts of The New York Times Company and all subsidiaries (the "Company")
after elimination of intercompany items.
Inventories. Inventories are stated at the lower of cost or current market
value. Inventory cost generally is based on the last-in, first-out ("LIFO")
method for newsprint and magazine paper and the first-in, first-out ("FIFO")
method for other inventories.
Investments. Investments in which the Company has at least a 20 percent but not
more than 50 percent interest are accounted for under the equity method.
Property, Plant and Equipment. Property, plant and equipment is stated at cost,
and depreciation is computed by the straight-line method over estimated service
lives. The Company capitalizes interest costs as part of the cost of
constructing major facilities and equipment.
Intangible Assets Acquired. Costs in excess of net assets acquired consist of
excess costs of businesses acquired over values assigned to their net tangible
assets and other intangible assets. The excess costs which arose from
acquisitions after October 31, 1970 are being amortized by the straight-line
method principally over 40 years. The remaining portion of such excess, which
arose from acquisitions before November 1, 1970 (approximately $13,000,000), is
not being amortized since in the opinion of management there has been no
diminution in value. Other intangible assets acquired consist principally of
advertiser and subscriber relationships which are being amortized over the
remaining lives, ranging from 5 to 40 years.
Subscription Revenues and Costs. Proceeds from subscriptions and related costs,
principally agency commissions, are deferred at the time of sale and are
included in the Consolidated Statements of Operations on a pro rata basis over
the terms of the subscriptions.
Foreign Currency Translation. The assets and liabilities of foreign companies
are translated at the year-end exchange rates. Results of operations are
translated at the average rates of exchange in effect during the year. The
resultant translation adjustment is included as a component of stockholders'
equity.
Earnings Per Share. Earnings per share is computed after preference dividends
and is based on the weighted average number of shares of Class A and Class B
Common Stock outstanding during each year. The effect of shares issuable under
the Company's Incentive Plans (see Note 12), including stock options, is not
material and therefore excluded from the computation.
Cash and Short-Term Investments. For purposes of the Consolidated Statements of
Cash Flows, the Company considers all highly liquid debt instruments purchased
with maturities of three months or less to be cash equivalents. The Company has
overdraft positions at certain banks caused by outstanding checks. These
overdrafts have been reclassified to accounts payable.
- -------------------------------------------------------------------------------
2. ACQUISITIONS/DIVESTITURES
On October 1, 1993, pursuant to an Agreement and Plan of Merger dated June 11,
1993, as amended as of August 12, 1993 (the "Merger Agreement"), a wholly-owned
subsidiary of the Company was merged with Affiliated Publications, Inc., the
parent company of The Boston Globe ("The Globe"), which became a wholly-owned
subsidiary of the Company.
The transaction was accounted for as a purchase and, accordingly, the results
of The Globe's operations have been included in the Company's consolidated
financial statements beginning October 1, 1993, the date the transaction closed.
The acquisition had a net cost of approximately $1,028,000,000. Under the
Merger Agreement the Company exchanged cash of approximately $160,000,000 for 15
percent of The Globe's common stock with the remainder of the consideration paid
by the exchange of approximately 36,400,000 shares of the Company's Class A
Common Stock valued at $24.03 per share. The purchase resulted in increases in
costs in excess of net assets acquired of approximately $830,000,000 (which will
be amortized by the straight-line method over 40 years); other intangible assets
acquired of $161,000,000 (which consist principally of advertiser and subscriber
relationships which are being amortized by the straight-line method over an
average period of 33 years); and property, plant and equipment of $246,000,000.
Net liabilities assumed as a result of the transaction totaled approximately
$209,000,000.
The following pro forma supplemental financial information is presented as if
the enterprises had combined at the beginning of the respective periods. It is
not necessarily indicative of the combined results that would have occurred had
the merger taken place as of the beginning of the periods provided, nor
necessarily indicative of results that may be achieved in the future:
(Dollars in thousands Year Ended December 31,
except per share data) 1993 1992
- ----------------------------------------------------------------------------
Revenues $ 2,335,985 $2,187,490
Income (loss)
before net cumulative
effect of accounting changes 1,380 (14,237)
Net income (loss) 1,380 (61,783)
Income (loss)
per share before net
cumulative effect of
accounting changes .01 (.13)
Net income (loss) per share .01 (.54)
F-14
<PAGE>
Pro forma depreciation and amortization expense for the year ended December 31,
1993 and 1992 was approximately $166,816,000 and $158,363,000 respectively.
On December 31, 1993 the Company sold two weekly newspapers and recognized a
pre-tax gain of $2,600,000, or $.02 per share, on the transaction.
In January 1994, a definitive agreement was announced regarding the sale of
BPI Communications, L.P. ("BPI"), a partnership in which the Company acquired a
one-third interest through its October 1993 merger with The Globe. The Company
received approximately $53,000,000 when the transaction was completed in
February 1994 with additional payments of approximately $2,000,000 expected
later in the year. For financial reporting purposes, no gain or loss will be
recognized on the transaction. The Company's investment in BPI of $55,000,000
has been included in other current assets on the accompanying Consolidated
Balance Sheet at December 31, 1993.
In September 1992 the Company closed The Gwinnett (Ga.) Daily News and sold
the residual assets. The closing, related sale and its 1992 operations resulted
in a pre-tax loss of approximately $53,768,000 ($37,113,000 after taxes or $.47
per share). The newspaper had not earned a profit since its acquisition in
1987, but its annual operating losses were not material.
In June 1992 the Company acquired two wholesale newspaper distribution
businesses that distribute The Times and other newspapers and periodicals in
New York City and central and northern New Jersey. The acquisition was
accounted for as a purchase; accordingly, the operating results have been
included in the consolidated financial statements from the date of the
acquisition. The cost of the acquisition was approximately $34,500,000, of
which $23,091,000 was paid in cash with the remainder representing net
liabilities assumed. The purchase resulted in an increase in intangible
assets acquired of $34,462,000.
In April 1991 the Company increased its interest in the International Herald
Tribune S.A. to 50 percent.
- -------------------------------------------------------------------------------
3. CAPITAL INVESTMENT PROJECTS
Depreciation of the building portion of the Company's Edison facility, amounting
to approximately $14,000,000 per year, began in 1990 when the facility was
substantially completed. Due to the resolution of various labor issues,
commencement of production at the facility was delayed until late in 1992.
Depreciation of the equipment began during the fourth quarter and was phased in
as each element was placed in service with full operation of the facility
beginning in the first quarter of 1993. Depreciation of the building and
equipment totaled $33,000,000 in 1993 and will increase to $35,000,000 in 1994
when the facility is operational for a full year.
In February 1993 the Company announced that The Times closed its printing
plant in Carlstadt, New Jersey, and transferred production and distribution to
the new Edison facility. The carrying value of the facility (approximately
$24,000,000) has been included in miscellaneous assets at December 31, 1993
pending the Company's determination of the future of the facility. The closing
of the plant and decision related to its future is not expected to result in a
writedown.
In December 1993 the Company and the City of New York executed a lease
agreement and related agreements, under which the Company will lease 31 acres of
City-owned land in Queens, New York, on which The Times plans to build a state-
of-the-art printing and distribution facility. Such agreement will not commence
until certain provisions relating to site preparation have been met and,
accordingly, the transaction has not yet been recorded on the Company's
financial statements. The Company estimates that the cost of the new facility
will be approximately $280,000,000 with construction to begin in the summer of
1994 and completion expected in 1997. The new facility will replace presses and
distribution facilities now located at The Times's facility in Manhattan. The
lease will continue for 25 years after the start of construction with an option
ultimately to purchase the property. Under the terms of the agreement, The
Times would receive various tax and energy cost reductions. Construction of the
facility is subject to approval of the Company's Board of Directors.
- -------------------------------------------------------------------------------
4. VOLUNTARY STAFF REDUCTIONS AND PRODUCTION UNION NEGOTIATIONS
The Company announced two fourth quarter 1993 pre-tax charges totaling
$35,400,000 or $.23 per share for severance and related costs resulting from
anticipated white-collar staff reductions (approximately $30,000,000) and
voluntary early retirements from the composing room (approximately $5,400,000)
at The Times.
In 1993 the Company completed the negotiations of long-term labor agreements
with all of its production unions, which extend to the year 2000. These
agreements include wages, payments to the unions' benefit and pension funds, job
security and financial incentives. The agreements extend to all of The Times's
production and distribution facilities and to any new facilities which the
Company might utilize (see Note 3).
In connection with these agreements, the Company recorded two pre-tax charges,
$28,000,000, or $.20 per share, in 1992 and $30,000,000, or $.22 per share, in
1989) for voluntary production union staff reductions at The Times related to
the opening of Edison (see Note 3), the further automation of newspaper
production in the composing room and the announced closing of Carlstadt.
In 1991 the Company recorded a $20,000,000 before-tax charge ($.15 per share)
for severance and related costs resulting from a voluntary termination benefits
program for approximately 160 employees at The Times, most of whom were members
of The Newspaper Guild of New York.
At December 31, 1993 and 1992, approximately $40,000,000 and $29,000,000,
respectively, are included in accrued expenses in the accompanying Consolidated
Balance Sheets, which represents the unpaid balance of the pre-tax charges.
F-15
<PAGE>
- -------------------------------------------------------------------------------
5. INVESTMENT IN FOREST PRODUCTS GROUP
The Company has equity interests in two Canadian newsprint companies and a paper
manufacturing company operating as a partnership. The equity interests in the
newsprint companies are: Donohue Malbaie Inc. - 49 percent; and Gaspesia Pulp
and Paper Company Ltd. - 49 percent.
In 1993 the Company recorded an after-tax noncash charge of $47.0 million
($.56 per share) against equity in operations to write down the Company's
investment in the Forest Products Group to reflect current operating conditions
and economic factors in the industry.
In December 1991 the Company and Kimberly-Clark Corporation announced the
completion of the divestiture of their jointly-owned affiliate, Spruce Falls
Power and Paper Company, Limited ("Spruce Falls"). Spruce Falls is a producer
of newsprint in which the Company held a 49.5 percent equity interest.
In connection with the divestiture, the Company committed to lend up to
$26,500,000 (C$30,000,000) to the new owners of the mill. Such loans will take
place over a five-year period ending December 1996. At December 31, 1993 and
1992 the Company had loaned Spruce Falls approximately $20,515,000 and
$5,515,000, respectively, under the loan commitment. Interest on the
outstanding balance is payable quarterly at annual rates ranging from 4 to 10
percent. Commencing in December 1997, the borrowings outstanding at the end of
the commitment (December 1996) are payable annually over a 5 year period in 20
percent increments.
The Company and Myllykoski Oy, a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison Paper Industries ("Madison").
Loans and contributions to Madison by an 80 percent-owned subsidiary of the
Company totaled $1,279,000, $1,337,000 and $1,806,000, respectively, in 1993,
1992 and 1991. The partners' interests in the net assets of Madison at any time
will depend on their capital accounts, as defined, at such time. Through the 80
percent-owned subsidiary, the Company's share of Madison's profits and losses is
40 percent.
At December 31, 1993, the Company recorded a distribution receivable from
Donohue Malbaie Inc. of $8,224,000. Such amount is included in other current
assets in the Company's consolidated balance sheet at such date. No other
distributions were received from the Canadian newsprint companies in 1993, 1992
or 1991. The Company's share of undistributed earnings of these companies
aggregated approximately $3,975,000 and $24,551,000 at December 31, 1993 and
1992, respectively.
Loans and contributions to the Canadian newsprint companies by the Company
totaled $171,000 in 1991. No loans and contributions were made in 1993 or 1992.
- -------------------------------------------------------------------------------
Condensed Combined Balance Sheets
of Forest Products Group
Dollars in thousands
- -------------------------------------------------------------------------------
December 31 1993 1992
- -------------------------------------------------------------------------------
Current assets $ 87,984 $ 76,317
Less current liabilities 75,073 65,026
- -------------------------------------------------------------------------------
Working capital 12,911 11,291
Fixed assets, net, etc. 345,413 372,554
Long-term debt (71,528) (77,025)
Deferred income taxes, etc. (102,752) (86,755)
- -------------------------------------------------------------------------------
Net assets $184,044 $220,065
- -------------------------------------------------------------------------------
At December 31, 1993 long-term debt of the Forest Products Group (exclusive of
$10,275,000 due within one year) matures as follows: 1995, $10,335,000; 1996,
$46,085,000; and 1997, $15,108,000. The maturities of a substantial portion of
the debt may be accelerated if cash flow, as defined, exceed certain levels.
None of the Forest Products Group's debt is guaranteed by the Company.
- -------------------------------------------------------------------------------
Condensed Combined Statements of Operations
of Forest Products Group
Dollars in thousands
- -------------------------------------------------------------------------------
Year Ended December 31 1993 1992 1991
- -------------------------------------------------------------------------------
Net sales and other income $254,324 $266,451 $287,924
Costs and expenses 269,845 297,117 276,062
- -------------------------------------------------------------------------------
Income (Loss) before taxes (15,521) (30,666) 11,862
Income tax benefit (2,700) (11,680) (544)
- -------------------------------------------------------------------------------
Net income (loss) $(12,821) $(18,986) $ 12,406
- -------------------------------------------------------------------------------
The condensed combined financial information of the Forest Products Group
excludes the income tax effects related to Madison. Such tax effects (see Note
7) have been included in the Company's consolidated financial statements.
The accumulated translation adjustment (included in earnings reinvested in the
business) decreased stockholders' equity by $2,628,000 and $1,217,000 at
December 31, 1993 and 1992 respectively. Upon the disposition of Spruce Falls
in 1991, stockholders' equity was reduced by $3,506,000 to reflect the
accumulated translation adjustment for such company.
Adjustments from translating certain balance sheet accounts, principally of
the Canadian newsprint companies, for each of the three years in the period
ended December 31, 1993, are set forth in the Consolidated Statements of
Stockholders' Equity.
During 1993, 1992 and 1991, the Company's Newspaper Group purchased newsprint
and supercalendered paper from the Forest Products Group at competitive prices.
Such purchases aggregated approximately $102,000,000, $112,000,000, and
$127,000,000 respectively.
F-16
<PAGE>
- --------------------------------------------------------------------------------
6. INVENTORIES
Inventories as shown in the accompanying Consolidated Balance Sheets are
composed of the following:
- ---------------------------------------
Dollars in thousands
- ---------------------------------------
December 31 1993 1992
- ---------------------------------------
Newsprint and
magazine paper $38,691 $44,570
Work-in-process, etc. 8,580 6,981
- ---------------------------------------
Total $47,271 $51,551
- ---------------------------------------
Utilization of the LIFO method reduced inventories as calculated on the FIFO
method by approximately $2,263,000 and $1,765,000 at December 31, 1993 and 1992
respectively.
- --------------------------------------------------------------------------------
7. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes ("SFAS 109") as of January 1, 1992 which changed its
method of accounting for income taxes from the deferred method (Accounting
Principles Board Opinion No. 11 - "APB 11") to an asset and liability approach.
The cumulative effect of this change in accounting method on net income was a
credit of $13,414,000 ($.17 per share) and was reflected as of January 1, 1992.
Income taxes for 1991 are measured under APB 11.
SFAS 109 requires recognition of deferred tax liabilities and assets for the
estimated future tax consequences attributable to temporary differences. Such
temporary differences exist when the tax basis differs from the financial
reporting amount of assets or liabilities. All tax liabilities and tax assets
are measured using current tax law and applicable rates. A valuation allowance
is recorded to reduce deferred tax assets to amounts which, in management's
judgment, are most likely to be realized.
SFAS 109 further requires adjustment of tax balances to reflect enacted
changes in tax law or rates in the period of enactment. Accordingly, 1993
results include increased tax expense resulting from the enactment of the Tax
Act in August. The Tax Act increased the statutory corporate income tax rate
one percent (to 35 percent) retroactive to January 1, 1993, and made other
changes concerning the deductibility of certain costs in determining taxable
income.
Income tax expense as shown in the Consolidated Statements of Operations is
composed of the following:
- -----------------------------------------------------
Dollars in thousands 1993 1992 1991
- -----------------------------------------------------
Current tax expense
Federal $60,178 $8,970 $21,666
State, local,
foreign 17,612 1,413 695
- -----------------------------------------------------
77,790 10,383 22,361
- -----------------------------------------------------
Deferred tax expense
Federal (26,982) (1,157) (2,335)
State, local,
foreign (8,919) 1,302 4,941
- -----------------------------------------------------
(35,901) 145 2,606
- -----------------------------------------------------
Income tax expense
including the
tax effects of
equity in
operations 41,889 10,528 24,967
Less income tax
(benefit) expense
related to equity
in operations (1,342) (551) 3,207
- -----------------------------------------------------
Income tax expense $43,231 $11,079 $21,760
- -----------------------------------------------------
Tax expense in 1993 was reduced by approximately $7,000,000 and $2,485,000,
respectively, relating to a decrease in valuation allowance and recognition of
federal tax benefits of capital loss carryforwards. Of the decrease in
valuation allowance, $4,390,000 was associated with federal tax benefits of
capital loss carryforwards; with the remainder attributable to state and local
tax benefits of net operating loss carryforwards. Adjustment of the Company's
deferred tax balances for the one percent rate increase provided in the Tax Act
added $4,359,000 to deferred tax expense, inclusive of $600,000 of expense
reported in equity in operations of the forest products group. In accordance
with the provisions of SFAS 109, approximately $1,600,000 of additional
reduction in valuation allowance, which was established against acquired
deferred tax assets, was recorded as a reduction of goodwill. No such amounts
affected 1992 tax expense.
In connection with the Gwinnett transaction in 1992 (see Note 2), the Company
had a net tax benefit of $16,655,000 on a pre-tax loss of $53,768,000. The
difference of $1,626,000 between the tax benefit and such benefit calculated at
the federal statutory rate is mainly attributable to an unrecognized capital
loss (which increased tax expense by $3,405,000), net of the impact of
previously amortized intangibles (which decreased tax expense by $1,779,000).
In 1991 the Company reversed a provision for income tax contingencies of
$10,000,000 related to a settlement with the Internal Revenue Service for tax
years 1980 through 1984.
The components of deferred income tax expense for 1991, which totaled
$2,606,000, are as follows: depreciation $13,288,000; tax certificate
$(10,409,000); tax settlement $(10,000,000); subscription expenses $7,969,000;
and other net deferred tax expense of $1,758,000.
Income tax benefits credited directly to stockholders' equity totaled
$3,595,000, $3,735,000 and $707,000 during 1993, 1992 and 1991 respectively.
Foreign taxes included in income tax expense in each of the years presented
were not significant.
F - 17
<PAGE>
The reasons for the variance between the effective tax rate on income before
income taxes and equity in operations of the Forest Products Group and the
federal statutory rate (exclusive in 1992 of the loss on the disposition of
Gwinnett) are as follows:
Year Ended December 31 1993 1992 1991
- ------------------------------------------------------------------------------
% of % of % of
Dollars in thousands Amount Pretax Amount Pretax Amount Pretax
- ------------------------------------------------------------------------------
Tax at federal
statutory rate $35,422 35.0% $21,180 34.0% $21,438 34.0%
Increase (decrease)
resulting from
State and local taxes
- - net 6,883 6.8 2,294 3.7 3,507 5.6
Capital loss
carryforwards (6,875) (6.8) - - - -
Amortization of
intangible
assets acquired 5,602 5.5 4,033 6.5 6,970 11.1
Change in enacted tax
rate 3,759 3.7 - - - -
Tax settlement - - - - (10,000) (15.9)
Other - net (1,560) (1.5) 227 0.3 (155) (0.3)
- ------------------------------------------------------------------------------
Subtotal 43,231 42.7% 27,734 44.5% 21,760 34.5%
- ------------------------------------------------------------------------------
Gwinnett disposition - (16,655) -
- ------------------------------------------------------------------------------
Income tax expense $43,231 $11,079 $21,760
- ------------------------------------------------------------------------------
Federal income taxes currently refundable totaled $2,992,000 and $4,842,000 at
December 31, 1993 and 1992, respectively, and are included in other current
assets on the Consolidated Balance Sheets. The components of the net deferred
tax liabilities recognized on the respective Consolidated Balance Sheets, are
as follows:
- -----------------------------------------
Dollars in thousands
December 31 1993 1992
- -----------------------------------------
Deferred Tax Assets
Intangible assets
acquired $23,568 $ 23,504
Accrued state and
local taxes 19,890 18,522
Postretirement and
postemployment 78,655 40,177
benefits
Other accrued
employee benefits 110,218 25,370
and compensation
Allowance for
doubtful 23,557 24,077
accounts
AMT credit - 4,033
carryforward
Tax loss 23,595 26,741
carryforwards
Other 20,151 6,521
- -----------------------------------------
Total deferred tax 299,634 168,945
assets
Valuation allowance (25,064) (19,851)
- -----------------------------------------
Net deferred tax $274,570 $149,094
assets
- -----------------------------------------
- -----------------------------------------
Dollars in thousands
December 31 1993 1992
- -----------------------------------------
Deferred Tax
Liabilities
Property, plant and
equipment $131,189 $ 127,691
Tax certificate 137,343 145,631
Nontaxable 145,298 -
acquisition
Deferred
subscription 21,743 21,361
expenses
Safe harbor tax 20,376 24,433
lease
Other 18,446 20,703
- -----------------------------------------
Total deferred tax 474,395 339,819
liabilities
- -----------------------------------------
Net deferred tax (274,570) (149,094)
assets
- -----------------------------------------
Net deferred tax 199,825 190,725
liability
- -----------------------------------------
Less amounts
included in:
Other current (4,812) -
assets
Accrued expenses 7,762 3,024
- -----------------------------------------
Deferred income $196,875 $187,701
taxes
- -----------------------------------------
At December 31, 1993, there were no federal net operating loss carryforwards.
Benefits from state and local loss carryforwards are attributable mainly to tax
operating losses. Such loss carryforwards expire in accordance with provisions
of applicable tax law and have remaining lives ranging from 1 to 15 years. At
December 31, 1993 the tax benefits relating to these carryforwards expire as
follows: 1996, $4,829,000; 1997, $7,984,000; 1998, $3,017,000; 1999 through
2003, $6,540,000 and 2004 through 2008, $1,225,000.
In connection with the sale in 1989 of its cable television system, the
Federal Communications Commission granted the Company a tax certificate. This
certificate enabled the Company to defer income taxes on the gain on the
transaction and pay such taxes over a number of years. Under the provisions
of the Internal Revenue Code, this is accomplished through a reduction in the
tax bases of various assets. As a result, $10,820,000, $10,388,000 and
$10,409,000 of income taxes that were so deferred became currently payable in
1993, 1992 and 1991 respectively. Additional income taxes that were deferred
will become currently payable over the remaining lives of those assets with
reduced tax bases.
Federal income tax returns for all years through 1989 have been examined by
the Internal Revenue Service. Tentative agreements have been reached for all
years through 1989.
F - 18
<PAGE>
Examinations of the tax returns for the years 1990 through 1992 have not
commenced. Management is of the opinion that any assessments resulting from
these examinations will not have a material effect on the consolidated
financial statements.
Equity in operations of the Forest Products Group (see Note 5) includes the
income tax effects of the Company's interest in Madison and its equity in the
operations of the Canadian newsprint companies. Of such amounts, tax benefits
of $585,000 in 1993, $1,219,000 in 1992 and $120,000 in 1991 are applicable to
the Canadian newsprint companies. Deferred taxes attributable to the Company's
interest in Madison were $1,562,000, $265,000, and $(561,000), respectively,
for 1993, 1992 and 1991. These deferred taxes relate principally to
differences between financial reporting and tax depreciation. The Company's
consolidated federal income tax returns include the income tax effects of its
interest in Madison.
- --------------------------------------------------------------------------------
8. DEBT
Long-term debt consisted of the following:
- -----------------------------------------
Dollars in thousands
December 31 1993 1992
- -----------------------------------------
Notes due 1998-2000
(a) $200,000 $ -
Notes due 1995 net of
unamortized discount:
1993, $2,444; 1992,
$4,169 (b) 159,856 158,131
Notes due 1995 net of
unamortized premium of
$3,725 in 1993(c) 53,725 -
Other notes, due in
1993 at a weighted
average interest
rate of 7.80%
in 1992 - 22
- -----------------------------------------
Total 413,581 158,153
Less current portion - 22
- -----------------------------------------
Total long-term
portion $413,581 $158,131
- -----------------------------------------
(a) In October 1993 the Company issued senior notes totaling $200,000,000 to
an insurance company with interest payable semi-annually. Five-year notes
totaling $100,000,000 were issued at a rate of 5.50 percent, and the remaining
$100,000,000 were issued as six and one-half year notes at a rate of 5.77
percent.
(b) In connection with the 1985 acquisition of certain newspapers, the Company
issued 10-year notes with an aggregate stated value of $162,300,000 which have
been discounted at an interest rate of 11.85 percent for financial reporting
purposes. Interest on certain of the notes is payable semi-annually. The
original difference of $12,600,000 between the stated value of the notes and the
amount that results from discounting the notes at 11.85 percent is being
amortized as interest expense over the term of the notes. Based on the
borrowing rates currently available to the Company for bank loans with similar
terms and average maturities, the fair value of these notes is $179,000,000.
(c) In connection with the 1993 acquisition of The Globe (see Note 2), the
Company assumed $50,000,000 of 9.34 percent fixed-rate notes maturing July 1995
which have been valued for financial reporting purposes using a discount rate of
4.25 percent. Interest on the notes is payable semi-annually. The excess of
the fair value of the notes at the acquisition date over the stated value of
such notes was $4,303,000, which is being amortized as a reduction of interest
expense over the remaining term of the notes.
The Company has an interest rate swap agreement (the "Agreement") with a major
financial institution to manage interest costs. The Agreement matures in 1995
and effectively converts the 9.34 percent interest rate to a variable rate which
is semi-annually indexed to the six-month LIBOR rate. Based on quoted market
prices, the Agreement was valued at $1,800,000 at the acquisition date and is
being amortized as interest expense over its term. Such amount has been
included in miscellaneous assets in the accompanying balance sheet at December
31, 1993. During the 1993 fourth quarter and on December 31, 1993, the
Company's effective interest rate on these unsecured notes was 6.42 percent.
As of December 31, 1993, the recorded amounts for these unsecured notes and
the Agreement approximate fair value.
- ------------------------------------------------------------------------------
In May 1992 the Company entered into an $80,000,000 revolving credit and term
loan agreement with a group of banks, which replaced the previous $100,000,000
revolving credit and term loan agreement which would have terminated in July
1992. The new agreement, as amended, terminates in May 1995. At such time,
then outstanding borrowings would be payable semi-annually aggregating 5
percent, 20 percent, 45 percent and 30 percent annually from 1995 to 1998. At
the Company's discretion, this facility may be converted into term loans at any
time. The Company also has a $40,000,000 revolving credit
agreement with the same group of banks that expires May 1994, at which time, any
outstanding borrowings would be payable.
The agreements permit borrowings which bear interest, at the Company's option,
(i) for domestic borrowings: based on the certificates of deposit rate, the
Federal Funds rate, a prime rate or a quoted rate; or (ii) for Eurodollar
borrowings: based on the London interbank rate. Borrowings under these
agreements may be prepaid without penalty. In October 1992 the Company entered
into a new $20,000,000 revolving credit and term loan agreement with a bank and
its affiliate, which replaced a previous $30,000,000 revolving credit agreement
with the same bank. The new agreement, as amended, terminates in May 1995. At
such time, then outstanding borrowings would be payable semi-annually
aggregating 5 percent, 20 percent, 45 percent and 30 percent annually from 1995
to 1998. At the Company's discretion, this facility may be converted into term
loans at any time. The Company also has entered into a $10,000,000 revolving
credit agreement with the same bank and its affiliate that expires May 1994, at
which time, any outstanding borrowings would be payable.
The agreements permit borrowings which bear interest, at the Company's option,
(i) for domestic borrowings: based on the certificates of deposit rate, a prime
rate or a quoted rate; or (ii) for
F - 19
<PAGE>
Eurodollar borrowings based on the London interbank rate. Borrowings under
these agreements may be prepaid without penalty.
No borrowings under any of the above agreements were outstanding during 1993.
Both agreements provide for an annual commitment fee of 1/8th of 1 percent on
the unused commitment. Certain of the agreements also include provisions which
require, among other matters, specified levels of stockholders' equity. At
December 31, 1993 approximately $1,148,000,000 of stockholders' equity was
unrestricted.
Short-term debt is comprised of current maturities of long-term debt and
capital lease obligations. Outstanding notes payable at December 31, 1993
consists of $62,340,000 of short-term bank borrowings at an average interest
rate of 3.71 percent. There were no outstanding notes payable at December 31,
1992.
Interest expense, net of interest income, as shown in the accompanying
Consolidated Statements of Operations consisted
of the following:
- -------------------------------------------------------
Dollars in thousands
Year Ended
December 31 1993 1992 1991
- -------------------------------------------------------
Interest expense $29,549 $30,075 $32,401
Interest income (4,174) (3,960) (1,815)
- -------------------------------------------------------
Net $25,375 $26,115 $30,586
- -------------------------------------------------------
In connection with various construction projects, interest of approximately
$1,351,000 and $705,000 was capitalized as property, plant and equipment for
1993 and 1992 respectively. There was no interest capitalized in 1991.
- --------------------------------------------------------------------------------
9. LEASE COMMITMENTS
In December 1993, the Company and The City of New York executed a long-term
lease agreement and related agreements, under which the Company will lease land
to build a state-of-the-art printing and distribution facility for The Times
(see Note 3).
Operating Leases:
Such lease commitments are primarily for office space and equipment. Certain
office space leases provide for adjustments relating to changes in real estate
taxes and other operating expenses.
Rental expense amounted to $24,744,000 in 1993, $23,689,000 in 1992 and
$24,159,000 in 1991. The approximate minimum rental commitments under
noncancelable leases (exclusive of minimum sublease rentals of $301,000) at
December 31, 1993 were as follows: 1994, $16,917,000; 1995, $11,977,000; 1996,
$9,647,000; 1997, $8,566,000; 1998, $7,416,000 and $36,427,000 thereafter.
Capital Leases:
In connection with its Capital Investment Projects (see Note 3), the Company
entered into a long-term lease for a building and site in Edison, New Jersey.
The lease provides the Company with certain early cancellation rights, as well
as renewal and purchase options. For financial reporting purposes, the lease
has been classified as a capital lease; accordingly, an asset of approximately
$57,000,000 (included in buildings, building equipment and improvements at
December 31, 1993 and 1992) has been recorded.
The following is a schedule of future minimum lease payments under all
capitalized leases together with the present value of the net minimum lease
payments as of December 31, 1993:
Dollars in thousands
- --------------------------------------
Year Ended December 31 Amount
- --------------------------------------
1994 $ 7,221
1995 6,871
1996 6,623
1997 6,411
1998 6,400
Later years 52,800
- --------------------------------------
Total minimum lease
payments 86,326
Less: amount representing
interest 37,254
- --------------------------------------
Present value of net
minimum lease payments
including current
maturities of $2,590 $49,072
- --------------------------------------
F - 20
<PAGE>
- --------------------------------------------------------------------------------
10. PENSION PLANS
The Company sponsors several pension plans and makes contributions to several
others in connection with collective bargaining agreements, including a joint
Company-union plan and a number of joint industry-union plans. These plans
cover substantially all employees.
The Company-sponsored pension plans provide participating employees with
retirement benefits in accordance with benefit provision formulas which are
based on years of service and final average or career pay, and where applicable,
employee contributions. Funding is based on an evaluation and review of the
assets, liabilities and requirements of each plan. Retirement benefits are also
provided under supplemental unfunded pension plans. Amounts for 1993 have
increased due to the October 1, 1993 acquisition of The Globe.
Net periodic pension cost was $16,461,000 in 1993, $15,082,000 in 1992, and
$14,467,000 in 1991. The components
of net periodic pension cost are:
- ----------------------------------------------------------------
Dollars in thousands
Year Ended December 31 1993 1992 1991
- ----------------------------------------------------------------
Service cost $14,075 $11,879 $11,210
Interest cost 26,675 24,167 22,451
Actual return on
plan assets (38,907) (25,365) (37,430)
Curtailment gain - (885) -
Net amortization
and deferral 14,618 5,286 18,236
- ----------------------------------------------------------------
Net periodic
pension cost $16,461 $15,082 $14,467
- ----------------------------------------------------------------
Assumptions used in the actuarial computations were:
- ----------------------------------------------------------------
Year Ended December 31 1993 1992 1991
- ----------------------------------------------------------------
Discount rate 7.0% 8.0% 8.25%
Rate of increase in
compensation levels 5.5% 5.5% 5.5%
Expected long-term
rate of return
on assets 8.75% 8.75% 8.75%
- ----------------------------------------------------------------
In connection with collective bargaining agreements, the Company contributes to
several other pension plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Pension cost for these plans was $17,970,000 in
1993, $15,700,000 in 1992, and $15,052,000 in 1991.
The funded status of the Company's plans which were valued at September 30, 1993
and 1992 is as follows:
Plans Plans
Whose Whose
Assets Accumulated
Exceed Benefits
December 31, 1993 Accumulated Exceed
Dollars in thousands Benefits Assets
- ----------------------------------------------------
Actuarial present
value of
benefit obligation:
Vested benefit
obligation $187,972 $219,554
- ----------------------------------------------------
Accumulated benefit
obligation $193,951 $227,102
- ----------------------------------------------------
Projected benefit
obligation $251,679 $282,179
Plan assets at fair
value 234,366 142,015
- ----------------------------------------------------
Projected benefit
obligation in
excess of plan
assets 17,313 140,164
Unrecognized net
losses (24,972) (20,043)
Unrecognized prior
service cost 7,746 (9,633)
Unrecognized
transition obligation (2,690) (2,724)
Fourth-quarter
contribution, net (2,675) (3,220)
Adjustment required
to recognize
additional minimum
liability - 10,087
- ----------------------------------------------------
Recorded pension
(asset) liability $ (5,278) $114,631
- ----------------------------------------------------
Plans Plans
Whose Whose
Assets Accumulated
Exceed Benefits
December 31, 1992 Accumulated Exceed
Dollars in thousands Benefits Assets
- ----------------------------------------------------
Actuarial present
value of
benefit obligation:
Vested benefit
obligation $230,705 $21,039
- ----------------------------------------------------
Accumulated benefit
obligation $235,994 $21,153
- ----------------------------------------------------
Projected benefit
obligation $296,312 $30,722
Plan assets at fair
value 284,469 -
- ----------------------------------------------------
Projected benefit
obligation
in excess of plan
assets 11,843 30,722
Unrecognized net
gains (losses) 6,181 (6,393)
Unrecognized prior
service cost (1,202) (1,005)
Unrecognized net
asset (transition
obligation) 1,873 (6,339)
Fourth-quarter
contribution, net (3,172) (265)
Adjustment required
to recognize
additional minimum
liability - 4,167
- ----------------------------------------------------
Recorded pension
liability $ 15,523 $20,887
- ----------------------------------------------------
Plan assets, which were valued as of September 30, 1993 and 1992, consist of
money market investments, investments in marketable fixed income and equity
securities, an investment in a diversified real estate equity fund and
investments in group annuity insurance contracts.
The additional liability relating to the unfunded status of these plans is
included in other liabilities on the Consolidated Balance Sheets as of December
31, 1993 and 1992 and miscellaneous assets includes a related intangible asset
of equal amount.
F - 21
<PAGE>
- --------------------------------------------------------------------------------
11. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS AND POSTEMPLOYMENT
BENEFITS
The Company provides health and life insurance benefits to retired employees
(and their eligible dependents) who are not covered by any collective bargaining
agreements if the employee meets specified age and service requirements.
The Company adopted the provisions of SFAS No. 106 - Employers' Accounting for
Postretirement Benefits Other Than Pensions ("SFAS 106"), changing to the
accrual method of accounting for these benefits effective January 1, 1992.
Prior to 1992, postretirement benefit expenses were recognized on a pay-as-you-
go basis and were not material.
As permitted by SFAS 106, the Company elected to recognize in 1992 the
accumulated postretirement benefit obligation related to prior service costs.
The Company recorded this obligation of $64,856,000 ($37,411,000 after taxes or
$.48 per share) as the cumulative effect of an accounting change at January 1,
1992.
Net periodic postretirement cost was $10,809,000 and $7,776,000 in 1993 and
1992 respectively. The components of this cost are as follows:
- --------------------------------------------
Dollars in thousands 1993 1992
- --------------------------------------------
Service cost for benefits
earned during the period $3,955 $3,299
Interest cost on
accumulated postretirement
benefit obligation 6,854 5,239
Curtailment gain - (762)
- --------------------------------------------
Net periodic
postretirement
benefit cost $10,809 $7,776
- -------------------------------------------
The Company's policy is to fund the
above-mentioned payments as claims
and premiums are paid.
The following table sets forth the
amounts included in "Accrued
Expenses" and "Other Liabilities" in
the Consolidated Balance Sheets at
December 31, 1993 and 1992 based on
valuation dates of September 30 in
each year. The 1993 amounts have
increased principally due to the
October 1, 1993 acquisition of The
Globe.
- --------------------------------------------
Dollars in thousands
- --------------------------------------------
December 31 1993 1992
- --------------------------------------------
Accumulated postretirement
benefit obligation
Retirees $53,677 $28,054
Fully eligible active 28,450 18,943
plan participants
Other active plan
participants 51,522 25,645
- --------------------------------------------
Total 133,649 72,642
Unrecognized net gains
(losses) 3,093 (2,198)
Fourth-quarter expense
net of benefit
payment 621 -
- --------------------------------------------
Total accrued
postretirement
benefit liability 137,363 70,444
Current portion included
in accrued expenses 4,040 2,591
- --------------------------------------------
Long-term accrued
postretirement
benefit liability $133,323 $67,853
- --------------------------------------------
For 1993 the accumulated postretirement benefit obligation was determined
using a discount rate of 7.0 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of between 13 percent
and 11 percent in the first year grading down to 5 percent in the year 2008.
Increasing the assumed health care cost trend rates by one percentage point in
each year and holding all other assumptions constant would increase the
accumulated postretirement benefit obligation as of December 31, 1993 by
$18,857,000 and increase the net periodic postretirement benefit cost for 1993
by $2,300,000.
For 1992 the accumulated postretirement benefit obligation was determined
using a discount rate of 8.0 percent, an estimated increase in compensation
levels of 5.5 percent and a health care cost trend rate of approximately 15.0
percent for pre-age-65 benefits, decreasing to 6.25 percent in the year 2014 and
thereafter and a rate of 14.75 percent for post-age-65 benefits decreasing to
6.0 percent in the year 2014 and thereafter.
In connection with collective bargaining agreements, the Company contributes
to several welfare plans including a joint Company-union plan and a number of
joint industry-union plans. Contributions are determined as a function of hours
worked or period earnings. Portions of these contributions, which cannot be
disaggregated, related to postretirement benefits for plan participants. Total
contributions to these welfare funds were approximately $18,000,000 and
$16,800,000 in 1993 and 1992 respectively.
The Company also adopted SFAS No. 112 - Employers' Accounting for
Postemployment Benefits ("SFAS 112") as of the beginning of 1992. SFAS 112
requires that certain benefits provided to former or inactive employees, after
employment but before retirement, such as workers' compensation, disability
benefits and health care continuation coverage be accrued if attributable to
employees' service already rendered. The cumulative effect on net income of
this change in accounting method resulted in a one-time charge of $16,365,000
($9,440,000 after taxes or $.12 per share) and has been reflected as of
January 1, 1992.
F - 22
<PAGE>
- --------------------------------------------------------------------------------
12. EXECUTIVE AND NON-EMPLOYEE DIRECTORS' INCENTIVE PLAN
Under the Company's 1991 Executive Stock Incentive Plan and 1991 Executive Cash
Bonus Plan (together the "1991 Executive Plans"), the Board of Directors may
authorize incentive compensation awards and grant stock options to key employees
of the Company. Awards may be granted in cash, restricted and unrestricted
shares of the Company's Class A Common Stock, Retirement Units or such other
forms as the Board of Directors deems appropriate. Under the 1991 Executive
Plans, stock options of up to 10,000,000 shares of Class A Common Stock may be
granted and stock awards of up to 1,000,000 shares of Class A Common Stock may
be made. In adopting the 1991 Executive Plans, shares previously available for
issuance of retirement units and stock options under prior plans are no longer
available for future awards.
Retirement Units are payable in Class A Common Stock over a period of 10 years
following retirement.
Stock options currently outstanding were granted under the Company's 1974 and
1984 Stock Option Plans and the 1991 Executive Plans. The Plans provide for
granting of both incentive and non-qualified stock options principally at an
option price per share of 100 percent of the fair market value of the Class A
Common Stock on the date of grant. These options have terms of five or ten
years, and become exercisable in annual periods ranging from one year to four
years from the date of grant. Payment upon exercise of an option may be made in
cash, with previously-acquired shares, with shares (valued at fair market value)
which would be otherwise issued on the exercise of the option or any combination
thereof.
Under the Company's Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"), non-qualified options with ten-year terms are granted annually to each
non-employee director of the Company. Each annual grant allows the director to
purchase from the Company up to 1,000 shares of Class A Common Stock at the fair
market value of such shares at the date of grant. Options for an aggregate of
250,000 shares of Class A Common Stock may be granted under the Directors' Plan.
Outstanding stocks options granted to key employees of The Globe to purchase
its Series A and/or Series B Common Stock prior to the merger have been
converted to stock options to purchase the Company's Class A Common Stock. The
former Globe stock options were converted at a ratio of 0.6 shares of Class A
Common for each share of Globe stock as determined by the merger agreement. All
of these stock options became exercisable effective with the merger on October
1, 1993.
Changes in stock options for each of the three years in the period ended
December 31, 1993 were as follows:
- --------------------------------------------------------------
Dollars in thousands Option Price
except per share data Shares Per Share($) Total
- --------------------------------------------------------------
Options outstanding
January 1, 1991 3,296,385 4.77 to 38.87 76,344
Granted 1,269,064 20.00 to 20.81 25,391
Exercised (134,984) 4.77 to 18.40 (1,121)
Terminations (94,957) 20.56 to 38.87 (2,515)
- --------------------------------------------------------------
Options outstanding
December 31, 1991 4,335,508 5.76 to 38.87 98,099
Granted 1,103,410 25.93 to 28.88 28,473
Exercised (466,320) 5.76 to 26.75 (7,900)
Terminations (91,982) 20.56 to 36.43 (2,737)
- --------------------------------------------------------------
Options outstanding
December 31, 1992 4,880,616 13.96 to 38.87 115,935
Granted 1,909,080 26.50 to 30.68 50,641
Globe stock
option conversion 958,654 6.89 to 22.50 14,381
Exercised (346,334) 6.89 to 26.75 (6,333)
Terminations (41,175) 20.00 to 36.43 (1,116)
- --------------------------------------------------------------
Options outstanding
December 31, 1993 7,360,841 6.89 to 38.87 $173,508
- --------------------------------------------------------------
Options which became
exercisable during
1991 1,086,077 20.56 $22,332
1992 728,859 20.00 to 20.81 14,588
1993 1,803,174 6.89 to 28.88 35,098
- --------------------------------------------------------------
Options exercisable
at December 31,
1991 3,066,444 5.76 to 38.87 $72,708
1992 3,237,964 13.96 to 38.87 76,678
1993 4,673,663 6.89 to 38.87 104,789
- --------------------------------------------------------------
F-23
<PAGE>
- --------------------------------------------------------------------------------
13. CAPITAL STOCK
The 5 1/2 percent cumulative prior preference stock, which is redeemable at the
option of the Company on 30-day's notice at par plus accrued dividends, is
entitled to an annual dividend of $5.50 payable quarterly.
The serial preferred stock is subordinate to the 5 1/2 percent cumulative
prior preference stock. The Board of Directors is authorized to set the
distinguishing characteristics of each series prior to issuance, including the
granting of limited or full voting rights; however, the consideration received
must be at least $100 per share. No shares of serial preferred stock have been
issued.
The Class A and Class B Common Stock are entitled to equal participation in
the event of liquidation and in dividend declarations. The Class B Common Stock
is convertible at the holders' option on a share-for-share basis into Class A
shares. As provided for in the certificate of incorporation, the Class A Common
Stock has limited voting rights, including the right to elect 30 percent of the
Board of Directors, and the Class A and Class B Common Stock have the right to
vote together on reservations of Company stock for stock options, on the
ratification of the selection of independent certified public accountants and,
in certain circumstances, on acquisitions of the stock or assets of other
companies. Otherwise, except as provided by the laws of the State of New York,
all voting power is vested solely and exclusively in the holders of the Class B
Common Stock.
At a special meeting of shareholders in September 1993, an amendment of the
Company's Restated Certificate of Incorporation was approved to increase the
total number of authorized shares of Class A Common Stock to 200,000,000 shares,
thereby increasing the Company's overall total number of authorized shares of
capital stock of The New York Times Company to 200,910,000 shares.
Under a stock repurchase program which commenced in June 1993 and expired at
the close of The Globe transaction on October 1, 1993, the Company repurchased
approximately 10,231,000 shares of its Class A Common Stock at an average price
of $24.87 per share.
In a new program announced in October 1993, the Company's Board of Directors
authorized additional expenditures of up to $150,000,000 for repurchases of its
Class A Common Stock. Under the new Board authorization, purchases may be made
from time to time either in the open market or through private transactions.
The number of shares that may be purchased in market transactions may be limited
as a result of The Globe transaction. Purchases may be suspended from time to
time or discontinued. Under this program, to date, the Company has repurchased
approximately 30,000 shares of its Class A Common Stock at an average price of
$24.78 per share. Had stock repurchases, under both programs, occurred as of
January 1, 1993, earnings per share for the year 1993 would have been $.08.
Under the 1994 Offering of the Employee Stock Purchase Plan, eligible
employees may purchase Class A Common Stock through payroll deductions during
1994 at the lower of $20.03 per share (85 percent of the average market price on
November 1, 1993) or 85 percent of the average market price on December 29,
1994.
Shares of Class A Common Stock reserved for issuance at December 31, 1993 and
1992 were as follows:
- --------------------------------------------------
December 31 1993 1992
- --------------------------------------------------
Retirement Units
Outstanding 216,806 229,574
Stock Awards
Available 993,359 -
Stock Options
Outstanding 7,360,841 4,880,616
Available 5,988,480 7,651,526
Employee Stock
Purchase Plan
Available 993,919 1,813,085
Voluntary Conversion of
Class B Common Stock
Available 571,624 571,804
- --------------------------------------------------
Total 16,125,029 15,146,605
- --------------------------------------------------
F - 24
<PAGE>
- --------------------------------------------------------------------------------
14. ACCOUNTING CHANGES
During 1992, the Company adopted three noncash accounting changes mandated by
the Financial Accounting Standards Board: SFAS No. 106-Employers' Accounting
for Postretirement Benefits Other Than Pensions (see Note 11), SFAS 109-
Accounting for Income Taxes (see Note 7) and SFAS 112-Employers' Accounting for
Postemployment Benefits (see Note 11). All accounting changes have been adopted
prospectively and, accordingly, earnings for 1991 have not been restated.
The cumulative effect of adopting these accounting changes is as follows:
- ----------------------------------------------
After-tax effects Earnings
(Dollars in thousands) per share
- ----------------------------------------------
Postretirement Benefits $(37,411) $(.48)
Income Taxes 13,414 .17
Postemployment Benefits (9,440) (.12)
-------- -----
Net charge $(33,437) $(.43)
======== =====
- ----------------------------------------------
- --------------------------------------------------------------------------------
15. SEGMENTS
The Company's segment and related information is included on pages 2 and 3 of
this Appendix. The information for the years 1993, 1992 and 1991 appearing
therein is presented on a basis consistent with, and is an integral part of, the
consolidated financial statements. Revenues from individual customers, revenues
between business segments and revenues, operating profit and identifiable assets
of foreign operations are not significant.
- --------------------------------------------------------------------------------
16. CONTINGENT LIABILITIES
There are various libel and other legal actions that have arisen in the ordinary
course of business and are now pending against the Company. Such actions are
usually for amounts greatly in excess of the payments, if any, that may be
required to be made. It is the opinion of management after reviewing such
actions with legal counsel to the Company that the ultimate liability which
might result from such actions would not have a material adverse effect on the
consolidated financial statements.
- --------------------------------------------------------------------------------
17. RECLASSIFICATIONS
For comparability, certain 1991 and 1992 amounts have been reclassified to
conform with the 1993 presentation.
F - 25
<PAGE>
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS
AND STOCKHOLDERS OF
THE NEW YORK TIMES COMPANY:
We have audited the accompanying consolidated balance sheets of The New York
Times Company as of December 31, 1993 and 1992 and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1993. Our audits also include
the financial schedules listed in the Index at Item 14(a). These consolidated
financial statements and financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of The New York Times Company as of
December 31, 1993 and 1992 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles. Also, in our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
As discussed in notes 7, 11 and 14, the Company changed its methods of
accounting for income taxes, postretirement benefits other than pensions and
postemployment benefits effective January 1, 1992 to conform with Statements of
Financial Accounting Standards 109, 106 and 112.
-Deloitte & Touche-
New York, New York
February 10, 1994
MANAGEMENT'S RESPONSIBILITIES
REPORT
The Company's consolidated financial statements were prepared by management who
is responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and, as such, include amounts based on management's best estimates
and judgments.
Management is further responsible for maintaining a system of internal
accounting control, designed to provide reasonable assurance that the Company's
assets are adequately safeguarded and that the accounting records reflect
transactions executed in accordance with management's authorization. The system
of internal control is continually reviewed for its effectiveness and is
augmented by written policies and procedures, the careful selection and training
of qualified personnel and a program of internal audit.
The consolidated financial statements were audited by Deloitte & Touche,
independent auditors. Their audit was conducted in accordance with generally
accepted auditing standards and their report is shown on this page.
The Audit Committee of the Board of Directors, which is composed solely of
independent directors, meets regularly with the independent auditors, internal
auditors and management to discuss specific accounting, financial reporting and
internal control matters. Both the independent auditors and the internal
auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to
perform audit and other related work for the Company.
MARKET INFORMATION
The Class A Common Stock is listed on the American Stock Exchange. The Class B
convertible Common Stock and the 5 1/2 percent cumulative prior preference stock
are unlisted and are not actively traded. Dividends on the preference stock
were paid at the quarterly rate of $1.375 per share during each of the two
years.
The approximate number of security holders of record as of January 31, 1994
was as follows: Class A Common Stock: 17,245; Class B Common Stock: 43; 5 1/2
percent cumulative prior preference stock: 65.
The market price range of Class A Common Stock in 1993 and 1992 is as follows:
- ------------------------------------------
Quarter Ended 1993 1992
- ------------------------------------------
High Low High Low
March 31 $31.25 $26.37 $32.12 $22.62
June 30 31.25 23.00 32.00 26.00
September 30 26.12 22.62 29.75 25.00
December 31 28.75 22.37 28.37 23.62
Year 31.25 22.37 32.12 22.62
- ------------------------------------------
F - 26
<PAGE>
<TABLE> <CAPTION>
QUARTERLY INFORMATION (Unaudited)
- ----------------------------------------------------------------------------------------------------------------
Dollars and shares in millions First Second Third Fourth
except per share data Quarter Quarter Quarter Quarter Year
1993 1992 1993 1992 1993 1992 1993 1992 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 454.5 $ 435.9 $ 483.6 $443.2 $ 445.6 $ 426.2 $ 636.0 $468.2 $2,019.7 $1,773.5
- ----------------------------------------------------------------------------------------------------------------
Costs and Expenses
Production costs:
Raw materials 63.7 67.6 67.5 62.1 64.2 63.6 85.1 57.3 280.5 250.6
Wages and benefits 101.2 91.4 100.1 92.7 99.8 100.5 136.4 103.8 437.5 388.4
Other 94.5 84.5 98.6 84.5 102.9 88.7 122.6 107.9 418.6 365.6
- ----------------------------------------------------------------------------------------------------------------
Total 259.4 243.5 266.2 239.3 266.9 252.8 344.1 269.0 1,136.6 1,004.6
Selling, general and
administrative
expenses 164.0 157.6 168.4 167.2 166.5 162.0 257.6 193.7 756.5 680.5
- ----------------------------------------------------------------------------------------------------------------
Total 423.4 401.1 434.6 406.5 433.4 414.8 601.7 462.7 1,893.1 1,685.1
- ----------------------------------------------------------------------------------------------------------------
Operating profit 31.1 34.8 49.0 36.7 12.2 11.4 34.3 5.5 126.6 88.4
Interest expense, net 5.2 7.0 5.2 6.7 6.6 6.4 8.4 6.0 25.4 26.1
Loss on disposition
of
Gwinnett Daily News - 1.6 - 1.1 - 51.1 - - - 53.8
Income taxes 12.9 11.2 20.9 12.4 6.5 (13.2) 2.9 0.7 43.2 11.1
- ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
equity in operations of
forest products group 13.0 15.0 22.9 16.5 (0.9) (32.9) 23.0 (1.2) 58.0 (2.6)
Equity in operations of
forest products group (2.1) (1.6) (0.5) (2.5) (2.1) (2.1) (47.2) (2.5) (51.9) (8.7)
- ----------------------------------------------------------------------------------------------------------------
Income (Loss) before
net cumulative effect
of accounting changes 10.9 13.4 22.4 14.0 (3.0) (35.0) (24.2) (3.7) 6.1 (11.3)
Net cumulative effect
of accounting changes - (33.4) - - - - - - - (33.4)
- ----------------------------------------------------------------------------------------------------------------
Net income (loss) $ 10.9 $(20.0) $ 22.4 $14.0 $ (3.0) $(35.0) $(24.2) $(3.7) $ 6.1 $(44.7)
- ----------------------------------------------------------------------------------------------------------------
Average number of
common
shares outstanding 79.9 78.4 79.7 78.5 72.4 78.6 106.0 78.6 84.5 78.5
Per share of common
stock
Before net cumulative
effect of
accounting changes $ .14 $ .17 $ .28 $.18 $ (.04) $(.44) $ (.23) $(.05) $ .07 $ (.14)
Net cumulative effect
of accounting changes - (.43) - - - - - - - (.43)
Net income (loss) .14 (.26) .28 .18 (.04) (.44) (.23) (.05) .07 (.57)
Dividends .14 .14 .14 .14 .14 .14 .14 .14 .56 .56
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The 1993 quarters do not equal the 1993 year-end amount for earnings per share
due to the weighted average number of shares outstanding used in the
computations for the respective periods. Per share amounts for the respective
quarters and years have been computed using the average number of common shares
outstanding as presented in the table above. The significant differences in the
number of shares in the 1993 periods are due principally to the issuance of
approximately 36.4 million shares due to the October 1993 Globe acquisition
offset, in part, by stock repurchases of approximately 10.3 million shares
during the third and fourth quarter.
The Company's largest source of revenues is advertising, which influences the
pattern of the Company's quarterly consolidated revenues and is seasonal in
nature. Traditionally, second-quarter and fourth-quarter advertising volume is
higher than that in the first quarter. Advertising volume tends to be lower in
the third quarter primarily because of the summer slow-down in many areas of
economic activity. Quarterly trends are also affected by the overall economy
and economic conditions that may exist in specific markets served by each of the
Company's business segments.
First-quarter 1993 was negatively affected by $3.7 million pre-tax ($.02 per
share) due to a March snowstorm.
Third-quarter 1993 includes $5.6 million ($.07 per share) of additional
income tax expense due to the enactment of the Tax Act.
Fourth-quarter 1993 includes a $2.6 million pre-tax gain ($.02 per share) on
the sale of assets.
Fourth-quarter 1993 includes $35.4 million of pre-tax charges ($.19 per share)
for white-collar and production union staff reductions at The Times.
Fourth-quarter 1993 includes an after-tax noncash charge to equity in
operations of $47.0 million ($.44 per share) to write-down the Company's
investment in its Forest Products Group to reflect current operating conditions
and economic factors in the industry.
First-quarter 1992 includes $3.1 million pre-tax gain ($.02 per share) on the
sales of assets.
Second-quarter 1992 was negatively affected by $11.0 million pre-tax ($.08 per
share) due to labor disruptions at The Times.
Third and fourth-quarter 1992 include pre-tax $2.8 million ($.02 per share)
and $7.6 million ($.05 per share), respectively, for training and start-up costs
for commencement of operations at Edison.
Fourth-quarter 1992 includes a $28.0 million pre-tax charge ($.20 per share)
for voluntary union staff reductions at The Times.
F - 27
<PAGE>
<TABLE><CAPTION>
TEN-YEAR SUPPLEMENTAL FINANCIAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in millions Year Ended December 31
except per share data 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and Income
Revenues $2,020 $1,774 $1,703 $1,777 $1,769 $1,700 $1,642 $1,524 $1,358 $1,199
- --------------------------------------------------------------------------------------------------------------------------------
Operating Profit 127 88 94 130 169 251 284 266 210 176
- --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations before
equity in forest products group 58 (2) 41 61 84 132 138 110 93 86
Equity in operations of forest products group (52) (9) 6 4 (16) 29 18 20 21 13
- --------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from continuing operations 6 (11) 47 65 68 161 156 130 114 99
Discontinued operations - - - - 199 7 4 2 2 1
Net cumulative effect of accounting changes - (34) - - - - - - - -
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 6 (45) 47 65 267 168 160 132 116 100
- --------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Total assets 3,215 1,995 2,128 2,150 2,188 1,915 1,712 1,405 1,296 869
Long-term debt and capital lease obligations 460 207 213 319 337 378 391 217 274 75
Common stockholders' equity 1,599 1,000 1,073 1,056 1,064 873 823 705 586 485
- --------------------------------------------------------------------------------------------------------------------------------
Per share of Common Stock
Continuing operations .07 (.14) .61 .85 .87 2.00 1.91 1.60 1.43 1.25
Discontinued operations - - - - 2.52 .08 .05 .03 .02 .01
Net cumulative effect of accounting changes - (.43) - - - - - - - -
Net income (loss) .07 (.57) .61 .85 3.39 2.08 1.96 1.63 1.45 1.26
Dividends .56 .56 .56 .54 .50 .46 .40 .33 .29 .25
Common stockholders' equity (end of year) 14.96 12.54 13.70 13.68 13.63 11.02 10.04 8.59 7.24 6.09
- --------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding (end of year)
Class A and Class B Common 106.9 79.7 78.4 77.2 78.1 79.2 82.0 82.0 80.9 79.7
- --------------------------------------------------------------------------------------------------------------------------------
Market Price (end of year) 26.25 26.37 23.62 20.62 26.37 26.87 31.00 35.50 24.50 19.19
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1993 - Results include pre-tax $3.7 million ($.02 per share) due to a March
snowstorm.
Results include $5.6 million ($.07 per share) of additional tax expense due to
the enactment of the Tax Act.
Results include a $2.6 million pre-tax gain ($.02 per share) on the sale of
assets.
Results include $35.4 million of pre-tax charges ($.23 per share) for staff
reductions at The Times.
Results include an after-tax noncash charge of $47.0 million ($.56 per share)
against equity in operations to write down the Company's investment in its
Forest Products Group to reflect current operating conditions and economic
factors in the industry.
1992 - Results included a $53.8 million pre-tax loss ($.47 per share) on the
closing of The Gwinnett (Ga.) Daily News.
Results included a $3.1 million pre-tax gain ($.02 per share) from the sales
of assets.
Results included a $28.0 million pre-tax charge ($.20 per share) for voluntary
union staff reductions at The Times.
Results included $21.4 million pre-tax ($.15 per share) for labor disruptions
and training and start-up costs at Edison.
1991 - Results included a $20.0 million pre-tax charge ($.15 per share) for
voluntary union staff reductions at The Times.
Results include the reversal of a provision for income taxes of $10.0 million
($.13 per share) for a favorable tax settlement.
1989 - Results included an after-tax gain of $193.3 million ($2.46 per share)
from the sale of the Company's cable television operations. The gain and
results of operations through the 1989 sale date are included as discontinued
operations.
Results included a $30.0 million pre-tax charge ($.22 per share) for voluntary
union staff reductions at The Times.
Results included an after-tax charge of $27.2 million ($.35 per share) for a
valuation reserve against the Company's investment in the Forest Products Group.
1986 - Results included an interest charge of $8.5 million ($.05 per share)
which relates to a court decision arising from the Company's 1981 acquisition of
two cable television systems.
1985 - Results included a $2.8 million gain ($.03 per share) from the sale
of property. The Company acquired five newspapers and two television stations
for $389.6 million.
F-28
<PAGE>
SCHEDULE V
THE NEW YORK TIMES COMPANY
PROPERTY, PLANT AND EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<TABLE> <CAPTION>
- --------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- --------------------------------------------------------------------------------------------------------
Balance at Other Balance at
beginning changes-- end
Classification of period Additions Retirements add (deduct) of period
- --------------------------------------------------------------------------------------------------------
Dollars in thousands
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Land........................ $ 61,961 $ 275 $ 15 $ 3,618(2,3) $ 65,839
Buildings, building
equipment and
improvements.............. 597,597 9,587 147 43,149(2,3) 650,186(5)
Equipment................... 751,186 28,610 9,497 104,180(2,3) 874,479
Construction and equipment
installations in
progress.................. 47,842 41,147(1) -- 4,018(2) 93,007
------------- ------------ ----------- ------------ -------------
Total............. $ 1,458,586 $ 79,619 $ 9,659 $ 154,965(2,3) $1,683,511
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
YEAR ENDED DECEMBER 31, 1992
Land........................ $ 66,022 $ 551 $ 894 $ (3,718)(4) $ 61,961
Buildings, building
equipment and
improvements.............. 605,416 9,849 856 (16,812)(4) 597,597(5)
Equipment................... 770,651 16,917 14,319 (22,063)(4) 751,186
Construction and equipment
installations in
progress.................. 27,830 20,012(1) -- -- 47,842
------------- ------------ ----------- ------------ -------------
Total............. $ 1,469,919 $ 47,329 $ 16,069 $ (42,593)(4) $ 1,458,586
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
YEAR ENDED DECEMBER 31, 1991
Land........................ $ 60,131 $ 5,908 $ 17 $ -- $ 66,022
Buildings, building
equipment and
improvements.............. 602,402 3,182 168 -- 605,416(5)
Equipment................... 762,250 15,248 6,847 -- 770,651
Construction and equipment
installations in
progress.................. 25,968 1,862(1) -- -- 27,830
------------- ------------ ----------- ------------ -------------
Total............. $ 1,450,751 $ 26,200 $ 7,032 $ -- $ 1,469,919
------------- ------------ ----------- ------------ -------------
------------- ------------ ----------- ------------ -------------
</TABLE>
- ---------------
(1) Net change for the period.
(2) Includes property, plant and equipment acquired through the October 1, 1993
acquisition of The Boston Globe.
(3) Includes reclassification of closed production facility (totaling $89
million) to miscellaneous assets pending decision related to future use of
such facility.
(4) Sale of residual assets of The Gwinnett (Ga.) Daily News.
(5) Includes $57 million capitalized lease of building and site for a production
and distribution facility in Edison, New Jersey for The New York Times.
S-1
<PAGE>
SCHEDULE VI
THE NEW YORK TIMES COMPANY
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<TABLE> <CAPTION>
- -----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- -----------------------------------------------------------------------------------------------------------
Balance at Other Balance at
beginning changes-- end
Description of period Additions(1) Retirements add (deduct) of period
- -----------------------------------------------------------------------------------------------------------
Dollars in thousands
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Buildings, building equipment and
improvements...................... $ 209,247 $ 31,386 $ 101 $ (21,616)(2) $ 218,916
Equipment........................... 346,584 57,888 8,445 (43,456)(2) 352,571
----------- ----------- ----------- ------------ -----------
Total..................... $ 555,831 $ 89,274 $ 8,546 $ (65,072)(2) $ 571,487
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
YEAR ENDED DECEMBER 31, 1992
Buildings, building equipment and
improvements...................... $ 178,869 $ 31,834 $ 378 $ (1,078)(3) $ 209,247
Equipment........................... 324,457 38,046 10,771 (5,148)(3) 346,584
----------- ----------- ----------- ------------ -----------
Total..................... $ 503,326 $ 69,880 $ 11,149 $ (6,226)(3) $ 555,831
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
YEAR ENDED DECEMBER 31, 1991
Buildings, building equipment and
improvements...................... $ 147,723 $ 31,187 $ 41 $ -- $ 178,869
Equipment........................... 289,598 41,254 6,395 -- 324,457
----------- ----------- ----------- ------------ -----------
Total..................... $ 437,321 $ 72,441 $ 6,436 $ -- $ 503,326
----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ------------ -----------
</TABLE>
- ---------------
(1) Depreciation of property, plant and equipment is provided at annual rates
based on estimated service lives. The rates are applied by the straight-line
method using ranges of estimated service lives as follows: 15 to 50 years
for buildings; 5 to 30 years for building equipment and improvements and 2
to 20 years for equipment.
(2) Reclassification of closed production facility to miscellaneous assets
pending decision related to future use of such facility.
(3) Sale of residual assets of The Gwinnett (Ga.) Daily News.
S-2
<PAGE>
SCHEDULE VIII
THE NEW YORK TIMES COMPANY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<TABLE> <CAPTION>
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ----------------------------------------------------------------------------------------------------------
Additions Deductions
charged for
to costs purposes
and for
Balance at expenses which Balance
beginning or accounts at end
Description of period revenues were set up of period
- ----------------------------------------------------------------------------------------------------------
Dollars in thousands
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Deducted from assets to which they apply
Uncollectible accounts...................... $ 12,809 $ 18,495 $ 14,196 $ 17,108
Returns and allowances, etc................. 20,491 71,657 65,749 26,399
----------- ----------- ----------- -----------
Total.................................. $ 33,300 $ 90,152 $ 79,945 $ 43,507
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
YEAR ENDED DECEMBER 31, 1992
Deducted from assets to which they apply
Uncollectible accounts...................... $ 13,020 $ 14,848 $ 15,059 $ 12,809
Returns and allowances, etc................. 17,621 61,154 58,284 20,491
----------- ----------- ----------- -----------
Total.................................. $ 30,641 $ 76,002 $ 73,343 $ 33,300
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
YEAR ENDED DECEMBER 31, 1991
Deducted from assets to which they apply
Uncollectible accounts...................... $ 11,837 $ 20,334 $ 19,151 $ 13,020
Returns and allowances, etc................. 17,968 42,957 43,304 17,621
Investment in forest products group
valuation allowance......................... 26,927 -- 26,927 --
----------- ----------- ----------- -----------
Total.................................. $ 56,732 $ 63,291 $ 89,382 $ 30,641
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
S-3
<PAGE>
SCHEDULE IX
THE NEW YORK TIMES COMPANY
SHORT-TERM BORROWINGS
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<TABLE> <CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- -------------------------------------------------------------------------------------------------------------------
Maximum Average Weighted
amount amount average
Weighted outstanding outstanding interest rate
Category of aggregate Balance at average during the during the during the
short-term borrowings end of period interest rate period period(1) period(2)
- -------------------------------------------------------------------------------------------------------------------
Dollars in thousands
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Borrowings from banks and commercial
paper................................ $ 62,340 3.7% $ 281,050 $ 75,924 3.5%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
YEAR ENDED DECEMBER 31, 1992
Borrowings from banks and commercial
paper................................ $ -- -- % $ 45,000 $ 2,331 4.0%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
YEAR ENDED DECEMBER 31, 1991
Borrowings from banks and commercial
paper................................ $ -- -- % $ 66,000 $ 18,941 6.6%
------------- ------ ----------- ----------- ------
------------- ------ ----------- ----------- ------
</TABLE>
- ---------------
(1) Calculated by dividing the aggregate amount borrowed during the year by the
number of days in a year.
(2) Calculated by dividing the total short-term interest expense by the average
short-term borrowings outstanding during the period.
S-4
<PAGE>
SCHEDULE X
THE NEW YORK TIMES COMPANY
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
<TABLE> <CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Column A Column B
- --------------------------------------------------------------------------------------------------------------------------
Charged to costs
Item(1) and expenses
- --------------------------------------------------------------------------------------------------------------------------
Dollars in
thousands
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Advertising costs (promotion, media, etc.).............................. $ 112,153
-------------------
-------------------
YEAR ENDED DECEMBER 31, 1992
Advertising costs (promotion, media, etc.).............................. $ 98,144
-------------------
-------------------
YEAR ENDED DECEMBER 31, 1991
Advertising costs (promotion, media, etc.).............................. $ 95,463
-------------------
-------------------
</TABLE>
-----------------------
(1) Amounts for other items required by this schedule are omitted as
they are presented in the consolidated financial statements or are
less than 1% of consolidated revenues.
S-5
EXHIBIT INDEX
Exhibit
No. Description
- ------ ---------------------------------------------------------------
3.1 -Certificate of Incorporation as amended by the Class A and
Class B stockholders and as restated on September 29, 1993.
3.2 -By-laws as amended through February 17, 1994.
9.1 -Globe Voting Trust Agreement, dated as of October 1, 1993.
10.2 -The Company's 1991 Executive Stock Incentive Plan, as
amended through April 13, 1993.
10.8 -Agreement of Lease, dated as of December 15, 1993, between
The City of New York, Landlord, and the Company, Tenant (as successor
to New York City Economic Development Corporation (the "EDC"),
pursuant to an Assignment and Assumption of Lease With Consent, made
as of December 15, 1993, between the EDC, as Assignor, to the
Company, as Assignee).
10.9 -Funding Agreement #1, dated as of December 15, 1993, between
the EDC and the Company.
10.10 -Funding Agreement #2, dated as of December 15, 1993,
between the EDC and the Company.
10.11 -Funding Agreement #3, dated as of December 15, 1993,
between the EDC and the Company.
10.12 -Funding Agreement #4, dated as of December 15, 1993,
between the EDC and the Company.
10.13 -New York City Public Utility Service Power Service
Agreement, made as of May 3, 1993, between The City of New York,
acting by and through its Public Utility Service, and The New York
Times Newspaper Division of the Company.
10.14 -Employment Agreement, dated May 19, 1993, between API,
Globe Newspaper Company and William O. Taylor.
10.16 -API's Supplemental Executive Retirement Plan, as amended
effective September 15, 1993.
21 -Subsidiaries of the Company.
EXHIBIT 3.1
THE NEW YORK TIMES COMPANY
Certificate of Incorporation
As Amended and Restated on
September 29, 1993
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
of
THE NEW YORK TIMES COMPANY
Under Section 807 of the Business Corporation Law
Pursuant to the provisions of Section 807 of the
Business Corporation Law, the undersigned, being a Senior Vice
President and the Secretary, respectively, of THE NEW YORK TIMES
COMPANY (hereinafter called the "Corporation"), hereby certify as
follows:
FIRST: The name of the Corporation is THE NEW YORK
TIMES COMPANY.
SECOND: The Certificate of Incorporation of the
Corporation was filed by the Department of State, Albany,
New York, on the 26th day of August, 1896.
THIRD: That the text of Article THIRD relating to the
share structure of the Corporation and Article EIGHTH
relating to the number of directors of the Corporation each
is hereby amended as stated below, and the text of Articles
FIRST, SECOND, FOURTH, FIFTH, SIXTH, SEVENTH and NINTH each
is hereby restated, without amendment or change, to read in
full, as follows:
"CERTIFICATE OF INCORPORATION
of
THE NEW YORK TIMES COMPANY.
FIRST
The name of the proposed corporation is The New York
Times Company.
SECOND
The objects for which it is to be formed are as
follows:
1. The business of printing, publishing and selling
newspapers, books, pamphlets and other publications;
gathering, transmitting and supplying news reports, general
job printing, and any and all other business incidental to
the foregoing or any of them or thereunto pertaining or
proper in connection therewith.
2. To purchase, take on lease or in exchange, hire or
otherwise acquire any real or personal property, rights or
privileges suitable or convenient for any purpose of its
business, and to erect and construct, make, improve or aid
or subscribe towards the construction, erection, making and
improvement of any building institution, machinery or other
appliance insofar as the same may be appurtenant to or
useful for the conduct of the business above specified, but
only to the extent to which the Corporation may be
authorized under the laws of the State of New York or of the
United States.
3. To acquire and carry on all or any part of the
business or property of any corporation engaged in a
business similar to that authorized to be conducted by this
Corporation, and to undertake in conjunction therewith any
liabilities of any person, firm, association or corporation
possessed of property suitable for any of the purposes of
this Corporation, or for carrying on any business which this
Corporation is authorized to conduct,
<PAGE>
and as the consideration for the same to pay cash or to issue
shares, stock or obligations of this Corporation.
4. To purchase, subscribe for or otherwise acquire,
hold and dispose of the shares, stock or obligations of any
corporation organized under the laws of this state or any
other state, or of any territory of the United States or of
any foreign country, except moneyed corporations, insofar as
the same may be useful for the conduct of the business of
this Corporation and incidental to or proper in connection
therewith; and to issue in exchange therefor its stock,
bonds or other obligations.
5. To borrow or raise money for any of the
aforementioned purposes of this Corporation, and to secure
the same and the interest thereon accruing, or for any
purpose, to mortgage or charge the undertaking, or all or
any part of the property, present or after acquired, subject
to the limitations herein expressed, and to create, issue,
make, draw, accept and negotiate debentures or debenture
stock, mortgage bonds, promissory notes or other obligations
or negotiable instruments.
6. To guarantee the payment of dividends or interest
on any share, stocks or debentures or other securities
issued by, or any other contract or obligation of any
corporation whenever proper or necessary for the business of
this Corporation, provided the required authority be first
obtained for that purpose.
7. To do any and all such other things as are
incidental or conducive to the attainment of the above-
mentioned objects.
THIRD
The Capital Stock is to consist of 200,910,000 shares,
of which 110,000 shares of the par value of One Hundred Dollars
($100) each shall be 5 1/2% Cumulative Prior Preference Stock,
200,000 shares of the par value of One Dollar ($1) each shall be
Serial Preferred Stock, 200,000,000 shares of the par value of
Ten Cents (10 cents) each shall be Class A Common Stock and 600,000 of
the par value of Ten Cents (10 cents) each shall be Class B Common
Stock.
FOURTH
The designations, preferences, privileges and voting
powers of the shares of each class and the restrictions or
qualification thereof are as follows:
(I) The holders of the 5 1/2% Cumulative Prior
Preference Stock shall be entitled to receive, when and as
declared by the Board of Directors, dividends at the rate of
5 1/2% of the par value thereof per annum and no more, payable
in equal quarterly installments on the first day of January,
April, July and October in each year, accruing from October
1, 1957, in respect of shares of the 5 1/2% Cumulative Prior
Preference Stock issued before October 1, 1957, and in
respect of shares of 5 1/2% Cumulative Prior Preference Stock
issued on or after said date, from the quarterly dividend
payment dates on which issued, or, if not issued on a
quarterly dividend payment date, from the quarterly dividend
payment date next preceding the date of issue of said
shares, before any distribution, whether by way of dividends
or otherwise, shall be declared or paid upon or set apart
for the Serial Preferred Stock or the Common Stock of the
Corporation, or any other stock of the Corporation, except
stock having a preference over, or being on a parity with,
the 5 1/2% Cumulative Prior Preference Stock. Such dividends
2
<PAGE>
upon the 5 1/2% Cumulative Prior Preference Stock shall be
cumulative so that unless all dividends on the 5 1/2%
Cumulative Prior Preference Stock for all past quarterly
dividends shall have been paid, or declared and a sum
sufficient for the payment thereof set apart, and after the
full dividend thereon for the current quarterly dividend
period shall have been paid, or declared and a sum
sufficient for the payment thereof set apart, the
Corporation shall not declare or pay any dividend, in cash
or stock or otherwise on the Serial Preferred Stock, the
Class A Common Stock, the Class B Common Stock or any other
stock of the Corporation, except stock having such
preference over, or being on a parity with, the 5 1/2%
Cumulative Prior Preference Stock.
(II) After all dividends upon the 5 1/2% Cumulative Prior
Preference Stock for all past quarterly dividend periods
shall have been paid, or declared and a sum sufficient for
the payment thereof set apart, and after the full dividend
thereon for the current quarterly dividend period shall have
been paid, or declared and a sum sufficient for the payment
thereof set apart, then, and not otherwise, the holders of
the Serial Preferred Stock shall be entitled to receive,
when and if declared by the Board of Directors, dividends
thereon at the rate and time and in the manner and on the
terms and conditions, prescribed by the Board of Directors
pursuant to paragraph VIII of this Article FOURTH before any
distribution, whether by way of dividends or otherwise, may
be declared or paid upon or set apart for the Class A Common
Stock, or Class B Common Stock of the Corporation or any
other stock of the Corporation, except stock having a
preference over, or being on a parity with, the Serial
Preferred Stock.
(III) After all dividends upon the 5 1/2% Cumulative Prior
Preference Stock for all past quarterly dividend periods
shall have been paid, or declared and a sum sufficient for
the payment thereof set apart, and after the full dividend
thereon for the current quarterly dividend period shall have
been paid, or declared and a sum sufficient for the payment
thereof set apart, and after all dividends upon all series
of Serial Preferred Stock for all past quarterly dividend
periods shall have been paid, or declared and a sum
sufficient for the payment thereof set apart, and after the
full dividend thereon for the current quarterly dividend and
a sum sufficient for the payment thereof set apart, then,
and not otherwise, dividends may be declared upon, and paid
to the holders of the Class A Common Stock and to the
holders of the Class B Common Stock, share for share, to the
exclusion of the holders of the 5 1/2% Cumulative Prior
Preference Stock and the Serial Preferred Stock.
(IV) The Corporation at the option of the Board of
Directors may redeem in whole or in part the 5 1/2% Cumulative
Prior Preference Stock at the time or times, but only after
October 1, 1962, fixed by the Board of Directors with
respect to the shares of 5 1/2% Cumulative Prior Preference
Stock so to be redeemed and on the terms and conditions
fixed herein, upon notice duly given as hereinafter
provided, by paying therefor in cash for each share of 5 1/2%
Cumulative Prior Preference Stock to be redeemed the sum of
One Hundred Dollars ($100) plus an amount equal to the
amount of all the dividends accumulated and unpaid thereon
at the redemption date, but without interest, whether or not
earned or declared (such sum being hereinafter called the
"redemption price").
At least 30 days' previous notice of any such
redemption of 5 1/2% Cumulative Prior Preference Stock shall be
mailed, addressed to the holders of record of the shares to
be redeemed at their respective addresses as the same shall
appear on the books of the Corporation as of such date
(which shall be not more than 50 days prior to the
redemption date) as shall be established by the Board of
Directors, and such notice shall also be published in a
daily newspaper printed in the English language and
published and of general circulation
3
<PAGE>
in the Borough of Manhattan, City of New York. In case of the
redemption of only part of the 5 1/2% Cumulative Prior
Preference Stock at the time outstanding, the shares so to be
redeemed shall be selected by either of the following methods
as the Board of Directors shall elect:
(a) By lot; or
(b) By redeeming as nearly as practicable that
proportion of the number of shares of 5 1/2% Cumulative
Prior Preference Stock held by each holder of record of
shares of 5 1/2% Cumulative Prior Preference Stock as of
the record date established by the Board of Directors
as hereinabove provided which the total number of
shares thereof so to be redeemed bears to the total
number of shares thereof then outstanding.
If such notice of redemption shall have been duly given
as aforesaid at least 30 days prior to the redemption date,
and if on or before the redemption date specified in such
notice all funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the
holders of the shares of 5 1/2% Cumulative Prior Preference
Stock so called for redemption, so as to be and continue to
be available therefor, then, from and after the redemption
date, notwithstanding that any certificate for the shares of
5 1/2% Cumulative Prior Preference Stock so called for
redemption shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed to
be outstanding, the right to receive dividends thereon shall
cease and all rights with respect to such shares of 5 1/2%
Cumulative Prior Preference Stock so called for redemption
shall forthwith on such redemption date cease and terminate
except only the right of the holders thereof to receive the
redemption price of such shares so to be redeemed, but
without interest thereon. Any moneys so set aside by the
Corporation and unclaimed at the end of 6 years from the
date fixed for such redemption shall revert to the general
funds of the Corporation.
The Corporation may, however, prior to the redemption
date specified in the notice of redemption, deposit in trust
for the account of the holders of the shares of 5 1/2%
Cumulative Prior Preference Stock so to be redeemed, with a
bank or trust company in good standing organized under the
laws of the United States of America or of the State of New
York, doing business in the Borough of Manhattan, the City
of New York, having a capital, surplus and undivided profits
aggregating at least $5,000,000, designated in such notice
of redemption, all funds necessary for such redemption,
together with irrevocable written instructions authorizing
such bank or trust company, on behalf and at the expense of
the Corporation, to cause the notice of redemption to be
duly mailed and the publication of such notice to be made as
hereinabove provided, at least 30 days prior to the
redemption date, and thereupon, notwithstanding that any
certificate for the shares of 5 1/2% Cumulative Prior
Preference Stock so called for redemption shall not have
been surrendered for cancellation, all shares of 5 1/2%
Cumulative Prior Preference Stock with respect to which such
deposit shall have been made shall no longer be deemed to be
outstanding and all rights with respect to such shares of
5 1/2% Cumulative Prior Preference Stock shall forthwith upon
such deposit in trust cease and terminate, except only the
rights of the holders thereof to receive from such bank or
trust company, at any time on or after the redemption date,
the redemption price for such shares so to be redeemed. Any
moneys so deposited by the Corporation and unclaimed at the
end of 6 years from the date fixed for such redemption shall
be repaid to the Corporation upon its request expressed in
a resolution of its Board of Directors, after which
repayment, the holders of the shares so called for
redemption shall look only to the Corporation for payment
thereof.
4
<PAGE>
(V) In the event of liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, the holders of the 5 1/2% Cumulative Prior
Preference Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation, whether from
capital, surplus or earnings, before any payment or
distribution out of such assets shall be made to the holders
of the Serial Preferred Stock or the holders of the Class A
Common Stock or the holders of the Class B Common Stock, or
any other stock of the Corporation, except stock having
preference over, or being on a parity with, the 5 1/2%
Cumulative Prior Preference Stock, the sum of One Hundred
Dollars ($100) per share plus an amount equal to the amount
of all the dividends accumulated and unpaid thereon, but
without interest, whether or not earned or declared, and
thereafter the holders of the 5 1/2% Cumulative Prior
Preference Stock shall be entitled to no further payment or
distribution. A reorganization, consolidation or merger of
this Corporation (in whatever manner effected, including the
sale or transfer of its assets) shall not be regarded as a
voluntary liquidation, dissolution or winding up of this
Corporation.
(VI) In the event of liquidation, dissolution, or
winding up of the Corporation, whether voluntary or
involuntary, after payment in full of the amounts required
to be paid to the holders of all 5 1/2% Cumulative Prior
Preference Stock then outstanding, the holders of all series
of Serial Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Corporation, whether
from capital, surplus or earnings, in the order of the
preference, if any, of the various series of the Serial
Preferred Stock, before any payment or distribution out of
such assets shall be made to the holders of the Class A
Common Stock or the holders of the Class B Common Stock, or
any other stock of the Corporation, except stock having a
preference over, or being on a parity with, the Serial
Preferred Stock, the sum of One Hundred Dollars ($100) per
share, and if required by the resolution or resolutions of
the Board of Directors establishing such series, an amount
which shall be equal to the amount of all dividends
accumulated and unpaid thereon, whether or not earned or
declared, but without interest, and thereafter the holders
of all series of the Serial Preferred Stock shall be
entitled to no further payment or distribution. A
reorganization, consolidation or merger of this Corporation
(in whatever manner effected, including the sale or transfer
of its assets) shall not be regarded as a voluntary
liquidation, dissolution or winding up of this Corporation.
(VII) In the event of the liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, after payment in full of the amounts required
to be paid to the holders of all 5 1/2% Cumulative Prior
Preference Stock then outstanding, and after payment in full
of the amounts required to be paid to the holders of all
series of the Serial Preferred Stock then outstanding, the
holders of the Class A Common Stock and the holders of the
Class B Common Stock shall be entitled to the exclusion of
the holders of the 5 1/2% Cumulative Prior Preference Stock and
the holders of all series of the Serial Preferred Stock to
share, ratably, share for share, in all remaining assets of
the Corporation. A reorganization, consolidation or merger
of this Corporation (in whatever manner effected, including
the sale or transfer of its assets) shall not be regarded as
a voluntary liquidation, dissolution or winding up of this
Corporation.
(VIII) (a) Subject to applicable provisions of law and
to the provisions of this Certificate of Incorporation
(including without limitation those provisions set forth in
paragraphs II and VI of this Article FOURTH) authority is
hereby expressly granted to and vested in the Board of
Directors, to the extent permitted by and upon compliance
with the provisions set forth in the law of the State of New
York to issue the Serial Preferred Stock from time to time
in one or more series, each series to have such relative
rights, preferences,
5
<PAGE>
limitations or restrictions, and bear such designations, as
shall be determined and stated prior to the issuance of any
shares of any such series in and by a resolution or resolutions
of the Board of Directors authorizing the issuance of such
series, including without limitation:
(1) The number of shares to constitute such series
and the distinctive designation thereof;
(2) The dividend rate or rates to which the shares
of such series shall be entitled and whether dividends
shall be cumulative and, if so, the date from which
dividends shall accumulate, and the quarterly dates on
which dividends, if declared, shall be payable;
(3) Whether the shares of such series shall be
redeemable, the limitations and restrictions in respect
of such redemptions, the manner of selecting shares of
such series for redemption if less than all shares are
to be redeemed, and the amount per share, including the
premium, if any, which the holders of shares of such
series shall be entitled to receive upon the redemption
thereof, which amount may vary at different redemption
dates and may be different in respect of shares
redeemed through the operation of any retirement or
sinking fund and in respect of shares otherwise
redeemed;
(4) Whether the holders of shares of such series
shall be entitled to receive, in the event of the
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, an
amount equal to the dividends accumulated and unpaid
thereon, whether or not earned or declared, but without
interest;
(5) Whether the shares of such series shall be
subject to the operation of a purchase, retirement or
sinking fund and, if so, whether such fund shall be
cumulative or noncumulative, the extent to and the
manner in which such fund shall be applied to the
purchase or redemption of the shares of such series for
retirement or to other corporate purposes, and the
terms and provisions in respect of the operation
thereof;
(6) Whether the shares of such series shall be
convertible into, or exchangeable for, shares of stock
of any other class or series thereof or of any other
series of the same class, and if so convertible or
exchangeable, the price or prices or the rate or rates
of conversion or exchange and the method, if any, of
adjusting the same;
(7) The voting powers, if any, of the shares of
such series in addition to the voting powers provided
by law;
(8) Any other rights, preferences, limitations or
restrictions not inconsistent with law or the
provisions of this Certificate of Incorporation.
(b) All shares of any one series of Serial Preferred
Stock shall be identical with each other in all respects,
except that in respect of any series entitled to cumulative
dividends, shares of such series issued at different times
may differ as to the dates from which such dividends shall
be cumulative.
6
<PAGE>
(c) The shares of Serial Preferred Stock shall be
issued for a consideration of at least One Hundred Dollars
($100) per share, and the stated capital allocable to each
such issued share shall be at least One Hundred Dollars
($100).
(IX) The holders of the Class A Common Stock shall be
entitled to one vote for each share thereof held by them in
the election of 30% of the Board of Directors proposed to be
elected at any meeting of stockholders held for that purpose
(or the nearest larger whole number if such percentage is
not a whole number) voting separately and as a class; and
the holders of the Class B Common Stock shall be entitled to
one vote for each share held by them in the election of the
balance of the Board of Directors proposed to be elected at
any such meeting, voting separately and as a class. Nothing
herein shall be deemed to limit the authority of the Board
of Directors with respect to the voting powers of any series
of Serial Preferred Stock which may be issued pursuant to
paragraph (VIII) of this Article FOURTH.
(X) The holders of the Class A Common Stock, the
holders of the Class B Common Stock, and (to the extent
determined by the Board of Directors in determining the
rights of any series of Serial Preferred Stock issued
pursuant to paragraph VIII hereof) the holders of shares of
any series of Serial Preferred Stock shall be entitled to
one vote per share, voting together and not as separate
classes, upon:
(1) The matters specifically set forth in
paragraph XII of this Article FOURTH;
(2) Any proposal submitted to a vote of
shareholders in connection with the ratification of the
selection of independent certified public accountants
to serve as auditors of the Company.
(XI) Except as provided in paragraphs VIII, IX and X
of this Article FOURTH and as otherwise required by the laws
of the State of New York, the entire voting power shall be
vested solely and exclusively in the holders of the shares
of Class B Common Stock, the holders of Class B Common Stock
to be entitled to 1 vote for each 1 share thereof held upon
all matters requiring a vote of stockholders of the
Corporation and the holders of the 5 1/2% Cumulative Prior
Preference Stock or of the Class A Common Stock shall have
no voting power, and shall not have the right to participate
in any meeting of stockholders or to have notice thereof.
(XII) Authorization by a majority of the votes cast at
a meeting of shareholders by the holders of shares entitled
to vote thereon shall be required for any one or more of the
following actions, unless the Corporation shall, prior to
any such action, receive in writing the consent of any stock
exchange upon which any stock of the Corporation may be
listed to such action without authorization of stockholders,
or unless at the time of such action no shares of stock of
the Corporation are listed upon any stock exchange:
(1) Reservation of any shares of capital stock of
the Corporation for options granted or to be granted to
officers, directors or employees of the Corporation:
(2) The acquisition of the stock or assets of any
other company in the following circumstances:
7
<PAGE>
(a) If any officer, director or holder of 10% or more
of any class of shares of voting securities of the
Corporation has an interest, directly or indirectly, in the
company or assets to be acquired or in the consideration to
be paid in the transaction;
(b) If the transaction involves the issuance of Class
A Common Stock or Class B Common Stock or securities
convertible into either, or any combination of the three,
and if the aggregate number of shares of Common Stock so to
be issued together with the Common Stock which could be
issued upon conversion of such securities approximates (in
the reasonable judgment of the Board of Directors) 20% of
the aggregate number of shares of Class A Common Stock and
Class B Common Stock outstanding immediately prior to such
transaction; or
(c) If the transaction involves issuance of Class A
Common Stock or Class B Common Stock and any additional
consideration, and if the value of the aggregate
consideration so to be issued (including the value of any
Common Stock which may be issuable in the future in
accordance with the terms of the transaction) has in the
reasonable judgment of the Board of Directors a combined
fair value of approximately 20% or more of the aggregate
market value of shares of Class A Common Stock and Class B
Common Stock outstanding immediately prior to such
transaction.
(XIII) Except for the holders of Class B Common Stock,
no holder of any share of any class of stock of the
Corporation shall have any preemptive or other rights to
subscribe for or purchase any shares of any class or any
notes, debentures, bonds or any other securities of the
Corporation, whether now or hereafter authorized and whether
or not convertible into, or evidencing or carrying options,
warrants or rights to purchase shares of any class or any
notes, debentures, bonds or any other securities now or
hereafter authorized, and whether the same shall be issued
for cash, services or property, or by way of dividend or
otherwise.
(XIV) Whenever any shares of Class A Common Stock or
Class B Common Stock of the Corporation shall have been
redeemed, purchased or otherwise reacquired, the Board of
Directors shall be authorized either to eliminate such
shares from the authorized number of shares of the
Corporation or to restore such shares to the status of
authorized but unissued shares.
(XV) (1) Each share of Class B Common Stock may at
any time be converted, at the option of the holder thereof,
into one fully paid and non-assessable (except to the extent
provided in Section 630 of the Business Corporation Law)
share of Class A Common Stock. Such right shall be exercised
by the surrender of the certificate representing such share
of Class B Common Stock to be converted at the office of the
transfer agent of the Corporation (the "Transfer Agent")
during normal business hours accompanied by a written notice
of the election by the holder thereof to convert and (if so
required by the Corporation or the Transfer Agent) an
instrument of transfer, in form satisfactory to the
Corporation and to the Transfer Agent, duly executed by such
holder or his duly authorized attorney, and funds in the
amount of any applicable transfer tax (unless provision
satisfactory to the Corporation is otherwise made therefor),
if required pursuant to subparagraph (3) below.
(2) As promptly as practicable after the surrender for
conversion of a certificate representing shares of Class B
Common Stock in the manner provided in subparagraph (1)
above and the payment in cash of any amount required by the
provisions of subparagraphs (1) and (3), the Corporation
will deliver or cause to be delivered at the office of the
Transfer
8
<PAGE>
Agent to or upon the written order of the holder of
such certificate, a certificate or certificates representing
the number of fully paid and non-assessable (except to the
extent provided in Section 630 of the Business Corporation
Law) shares of Class A Common Stock issuable upon such
conversion, issued in such name or names as such holder may
direct. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of
the surrender of the certificate representing shares of
Class B Common Stock, and all rights of the holder of such
shares of Class B Common Stock as such holder shall cease at
such time and the person or persons in whose name or names
the certificate or certificates representing the shares of
Class A Common Stock are to be issued shall be treated for
all purposes as having become the record bolder or holders
of such shares of Class A Common Stock at such time;
provided, however, that any such surrender and payment on
any date when the stock transfer books of the Corporation
shall be closed shall constitute the person or persons in
whose name or names the certificate or certificates
representing shares of Class A Common Stock are to be issued
as the record holder or holders thereof for all purposes
immediately prior to the close of business on the next
succeeding day on which such stock transfer books are open.
(3) The issuance of certificates for shares of Class A
Common Stock upon conversion of shares of Class B Common
Stock shall be made without charge for any stamp or other
similar tax in respect of such issuance. However, if any
such certificate is to be issued in a name other than that
of the holder of the share or shares of Class B Common Stock
converted, the person or persons requesting the issuance
thereof shall pay to the Corporation the amount of any tax
which may be payable in respect of any transfer involved in
such issuance, or shall establish to the satisfaction of the
Corporation that such tax has been paid.
(4) When shares of Class B Common Stock have been
converted, they shall be cancelled and not reissued.
FIFTH
The amount with which said Corporation shall commence
business is the sum of Seven Hundred Dollars ($700).
SIXTH
The Secretary of State is designated as agent for the
service of process.
The principal office of the Corporation shall be located in
the City of New York, County of New York and State of New York,
and the address to which the Secretary of State shall mail a copy
of process in any action or proceeding against the Corporation
which may be served on him is 229 West 43d Street, New York, N.Y.
10036.
SEVENTH
The duration of the Corporation shall be perpetual.
9
<PAGE>
EIGHTH
The number of directors of the Corporation shall be not less
than three nor more than eighteen, each of whom shall hold at
least one share of Capital Stock.
NINTH
No director of the Corporation shall be personally liable to
the Corporation or its stockholders for damages for any breach of
duty as a director; provided that this Article NINTH shall
neither eliminate nor limit liability: (a) if a judgment or
other final adjudication adverse to such director establishes
that his or her acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that he
or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled or that his
or her acts violated Section 719 of the Business Corporation Law;
or (b) for any act or omission prior to the effectiveness of this
Article NINTH. Any repeal of or modification to the provisions
of this Article NINTH shall not adversely affect any right or
protection of a director of the Corporation existing pursuant to
this Article NINTH immediately prior to such repeal or
modification."
FOURTH: The amendments to the Certificate of
Incorporation effected by the foregoing restatement were
authorized by a vote of the Board of Directors at a meeting
of the Board of Directors held at 229 West 43rd Street, New
York, New York, on the 10th day of June, 1993, at 3:00 p.m.
local time, upon notice pursuant to Section 711 of the
Business Corporation Law followed by the affirmative vote of
the holders of record of a majority of the outstanding
shares of the Class B Common Stock of the Corporation at a
special meeting of the shareholders held at Town Hall, 123
West 43rd Street, New York, New York 10036 on the 28th day
of September, 1993, at 9:00 a.m., local time, upon notice
pursuant to Section 605 of the Business Corporation Law.
IN WITNESS WHEREOF, we have hereunto subscribed this
Certificate this 29th day of September, 1993, and affirm that the
statements contain therein are true under the penalties of
perjury.
By
--------------------------
Michael E. Ryan
Senior Vice President
By
---------------------------
Laura J. Corwin
Secretary
10
THE NEW YORK TIMES COMPANY
------------------
By-Laws
------------------
As Amended by the
Board of Directors
October 21, 1968, February 26, 1969, March 24, 1971, March 29,
1972, March 28, 1973, May 30, 1973, November 28, 1973, March 27,
1974, March 31, 1976, April 26, 1977, January 30, 1978, October 25,
1978, April 3, 1979, July 23, 1979, March 20, 1980, May 15, 1980,
March 19, 1981, March 18, 1982, February 17, 1983, April 28, 1983,
February 16, 1984, July 18, 1985, February 20, 1986, April 30, 1986,
October 16, 1986, February 19, 1987, February 18, 1988, March 16,
1989, February 15, 1990, February 21, 1991, February 20, 1992,
February 18, 1993, October 21, 1993, December 16, 1993, and
February 17, 1994.
As Ratified by the
Class B Stockholders
April 22, 1969
and the Class A and Class B Stockholders
(Article XI only)
April 19, 1988
<PAGE>
BY-LAWS
OF
THE NEW YORK TIMES COMPANY
As Amended by the As Ratified by the
Board of Directors Class B Stockholders
October 21, 1968 April 22, 1969
February 26, 1969 and the Class A and
March 24, 1971 Class B Stockholders
March 29, 1972 (Article XI only)
March 28, 1973 (April 19, 1988)
May 30, 1973
November 28, 1973
March 27, 1974
March 31, 1976
April 26, 1977
January 30, 1978
October 25, 1978
April 3, 1979
July 23, 1979
March 20, 1980
May 15, 1980
March 19, 1981
March 18, 1982
February 17, 1983
April 28, 1983
February 16, 1984
July 18, 1985
February 20, 1986
April 30, 1986
October 16, 1986
February 19, 1987
February 18, 1988
March 16, 1989
February 15, 1990
February 21, 1991
February 20, 1992
February 18, 1993
October 21, 1993
December 16, 1993
February 17, 1994
i
<PAGE>
I N D E X
<TABLE>
<S> <C> <C>
PAGE
ARTICLE I. Stockholders........................................................................... 1
1. Annual Meeting................................................................. 1
2. Special Meetings............................................................... 1
3. Notice of Meetings............................................................. 1
4. Quorum......................................................................... 1
5. Voting......................................................................... 1
ARTICLE II. Closing Transfer Books; Setting Record Date............................................ 2
1. Qualification of Voters........................................................ 2
2. Determination of Stockholders of Record for Other Purposes..................... 2
ARTICLE III. Board of Directors..................................................................... 2
1. Number, Classification, Election and Qualifications............................ 2
2. Vacancies...................................................................... 2
3. Regular Meetings............................................................... 3
4. Special Meetings............................................................... 3
5. Quorum......................................................................... 3
6. Committees..................................................................... 4
7. Salaries....................................................................... 4
8. Resignation.................................................................... 4
9. Telephonic Meetings............................................................ 4
ARTICLE IV. Officers............................................................................... 4
1. Appointment.................................................................... 4
2. Term of Office................................................................. 4
3. The Chairman of the Board...................................................... 5
4. The Vice Chairman of the Board................................................. 5
5. The President.................................................................. 5
6. Vice Presidents................................................................ 5
7. The Secretary.................................................................. 5
8. The Treasurer.................................................................. 5
9. Duties of Officers may be Delegated............................................ 6
ARTICLE V. Stock Certificates..................................................................... 6
1. Issuance of Stock Certificates................................................. 6
2. Lost Stock Certificates........................................................ 6
3. Transfers of Stock............................................................. 6
4. Regulations.................................................................... 6
ARTICLE VI. Seal................................................................................... 7
ARTICLE VII. Checks................................................................................. 7
ARTICLE VIII. Books of Account and Stock Book........................................................ 7
ARTICLE IX. Fiscal Year............................................................................ 7
ARTICLE X. Voting Securities...................................................................... 7
ARTICLE XI. Indemnification........................................................................ 7
ARTICLE XII. Interest of Directors and Officers in Contracts with the Company....................... 8
ARTICLE XIII. Notices................................................................................ 8
ARTICLE XIV. Amendment.............................................................................. 9
</TABLE>
ii
<PAGE>
THE NEW YORK TIMES COMPANY
BY-LAWS
ARTICLE I
STOCKHOLDERS
1. Annual Meeting.
The Annual Meeting of Stockholders for the election of directors and for
the transaction of such other business as may properly come before the meeting
shall be held on the third Tuesday in April, at such time and place either
within or without the State of New York as may be specified by the Board of
Directors.
2. Special Meetings.
Special meetings of the stockholders, to be held at such place either
within or without the State of New York and for the purpose or purposes as may
be specified in the notices of such meetings, may be called by the Chairman of
the Board or the President and shall be called by the President or the Secretary
at the request of a majority of the Board of Directors or of stockholders owning
25 per cent or more of the shares or stock of the Company issued and outstanding
and entitled to vote on any action proposed by such stockholders for such
meetings. Such request shall be in writing and shall state the purpose or
purposes of the proposed meeting.
3. Notice of Meetings.
Notice of the time, place and purpose or purposes of every meeting of
stockholders shall be in writing, signed by the President or the Secretary, and
shall be mailed by the Secretary, or the person designated by him to perform
this duty, at least ten, and not more than fifty, days before the meeting, to
each stockholder of record entitled to vote at such meeting and to each
stockholder of record who would be entitled to have his stock appraised if the
action proposed at such meeting were taken. Such notice shall be directed to a
stockholder at his address as it appears on the stock book, unless he shall have
filed with the Secretary a written request that notices intended for him be
mailed to some other address, in which case it will be mailed to the address
designated in such request.
4. Quorum.
The holders of record of a majority of the shares of stock issued and
outstanding and entitled to vote thereat, present in person or by proxy, shall
be requisite and shall constitute a quorum at each meeting of stockholders for
the transaction of business, except as otherwise provided by law, by the
Certificate of Incorporation or by these By-laws; provided that, when any
specified action is required to be voted upon by a class of stock voting as a
class, the holders of a majority of the shares of such class shall be requisite
and shall constitute a quorum for the transaction of such specified action. If,
however, there shall be no quorum, the officer of the Company presiding as
chairman of the meeting shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present, when any business may be transacted which might have been
transacted at the meeting as first convened had there been a quorum.
5. Voting.
Each stockholder entitled to vote on any action proposed at a meeting of
stockholders shall be entitled to one vote in person or by proxy for each share
of voting stock held of record by him. Every proxy must be executed in writing
by the stockholder or by his duly authorized attorney. No proxy shall be valid
after the expiration of eleven months from the date of its execution, unless the
person executing it shall have specified therein its duration.
1
<PAGE>
The vote for directors shall be by ballot, and the election of each
director shall be decided by a plurality vote. Except as otherwise provided by
law, by the Certificate of Incorporation, by other certificate filed pursuant to
law or by these By-laws, votes on any other matters coming before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
shares represented at such meeting, in person or by proxy, and entitled to vote
on the specific matter. Except as required by law, by the Certificate of
Incorporation, by other certificate filed pursuant to law or by these By-laws,
the chairman presiding at any meeting of stockholders may rule on questions of
order or procedure coming before the meeting or submit such questions to the
vote of the meeting, which vote may at his direction be by ballot. The chairman
shall submit any such questions to the vote of the meeting at the request of any
stockholder entitled to vote present in person or by proxy at the meeting, which
vote shall be by ballot.
ARTICLE II
CLOSING TRANSFER BOOKS; SETTING RECORD DATE
1. Qualification of Voters.
The Board of Directors may prescribe a period, not exceeding fifty days
prior to the date of any meeting of the stockholders or prior to the last day on
which the consent or dissent of stockholders may be effectively expressed for
any purpose without a meeting, as the time as of which stockholders entitled to
notice of and to vote at such a meeting or whose consent or dissent is required
or may be expressed for any purpose, as the case may be, shall be determined,
and all persons who were holders of record of voting stock at such time and no
others shall be entitled to notice of and to vote at such meeting or to express
their consent or dissent, as the case may be.
2. Determination of Stockholders of Record for Other Purposes.
The Board of Directors may fix a time, not exceeding forty days preceding
the date fixed for the payment of any dividend or for the making of any
distribution or for the delivery of evidences of rights or evidences of
interests arising out of any change, conversion or exchange of capital stock, as
a record time for the determination of the stockholders entitled to receive any
such dividend, distribution, rights or interests, and in such case only
stockholders of record at the time so fixed shall be entitled to receive such
dividend, distribution, rights or interests.
ARTICLE III
BOARD OF DIRECTORS
1. Number, Classification, Election and Qualifications.
The affairs of the Company shall be managed by a Board of Directors
consisting of sixteen members. For the purpose of election of directors only,
and not for any other purpose, the sixteen directors shall be divided into two
classes, the five directors whom the holders of Class A Common Stock are
entitled to elect, to be designated the Class A directors, and the eleven
directors whom the Class B Common Stock are entitled to elect, to be designated
the Class B directors. The directors shall, except as provided in Section 2 of
this Article III, be elected by the classes of shares entitled to elect them, by
ballot at each annual meeting of stockholders, and shall hold office until the
next annual meeting of stockholders and until their successors shall be elected
and qualify. All directors must be of full age and at least one shall be a
citizen of the United States and a resident of New York State.
2. Vacancies.
Any vacancy in the Board of Directors, whether caused by resignation,
death, increase in the number of directors, disqualification or otherwise, may
be filled by a majority of the directors in office
2
<PAGE>
after the vacancy has occurred, although less than a quorum. A director so
elected shall hold office for the unexpired term in respect of which such
vacancy occurred.
3. Regular Meetings.
A regular meeting of the Board shall be held in each year immediately
following the Annual Meeting of Stockholders or if such meeting be adjourned,
the final adjournment thereof at the same place as such meeting of stockholders.
No notice of such meeting shall be necessary to the newly elected directors in
order to legally constitute the meeting. Other regular meetings of the Board may
be held at such time and place, either within or without the State of New York,
as shall from time to time be determined by a resolution of the Board. Any
business may be transacted at any regular meeting at which a quorum is present.
The time and place of any such regular meeting may be changed (i) at the
preceding regular meeting; or (ii) subsequent to the adjournment of the
preceding regular meeting by consent in writing signed by a majority of the
whole Board; provided, however, that in either case notice of such change be
served on each director personally or by telegram two days or by mail five days
prior to the date originally designated for such regular meeting.
4. Special Meetings.
A special meeting of the Board of Directors may be held at the time fixed
by resolution of the Board or upon call of the Chairman of the Board, the
President or any two directors and may be held at any place within or without
the State of New York. Except as otherwise provided by law, by the Certificate
of Incorporation, by other certificate filed pursuant to law or by these
By-laws, notice of the time and place of any special meeting of the Board shall
be given by the Secretary or other person designated by him to perform this duty
by serving the same personally or by telegram on each director at his post
office address as the same shall appear on the books of the Company at least two
days previous to such meeting or by mailing a copy of such notice, postage
prepaid, to each director at such address at least five days previous to such
meeting, provided, however, that no notice need be given to any director if
waived by him either before or after the meeting or if he shall be present at
such meeting, and any meeting of the Board may be held at any time without
notice if all the directors then in office shall be present thereat.
Any such notice shall also state the items of business which are expected
to come before the meeting, and the items of business transacted at any special
meeting of the Board shall be limited to those stated in such notice, unless all
the directors are present at the meeting, or all those absent consent in writing
either before or after the meeting, to the transaction of an item or items of
business not stated in such notice.
5. Quorum.
At all meetings of the Board, the presence of any five of the directors in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business, and, except as otherwise required by law, by the
Certificate of Incorporation, by other certificate filed pursuant to law or by
these By-laws, the affirmative vote of a majority of the directors present at
any meeting at which a quorum is present shall be necessary for the adoption of
any business or resolution which may come before the meeting; provided, however,
that in the absence of a quorum a majority of the directors present or any
director solely present may adjourn any meeting from time to time until a quorum
is present. No notice of any adjournment to a later hour on the date originally
designated for the holding of a meeting need be given, but immediate telegraphic
notice shall be given by the Secretary or other person designated by him to
perform this duty to all directors of any adjournment to any subsequent date,
and such notice shall be deemed sufficient, though less than the notice required
by Section 3 if such meeting be an adjourned regular meeting of the Board, or by
Section 4 if such meeting be an adjourned special meeting of the Board.
3
<PAGE>
6. Committees.
The Board of Directors may by resolution or resolutions passed by a
majority of the whole Board designate one or more committees, each committee to
consist of three or more of the directors, which, to the extent provided in said
resolution or resolutions, shall have and may exercise powers of the Board of
Directors in the management of the business and affairs of the Company and may
have power to authorize the seal of the Company to be affixed to all papers
which may require it. Such committee or committees shall have such name or names
as may be determined from time to time by resolution adopted by the Board of
Directors. All committees so appointed shall keep regular minutes of the
business transacted at their meetings.
7. Salaries.
Directors, as such, shall not receive any stated salary for their services,
but by resolution of the Board may receive an annual retainer and, in addition,
a fixed sum and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting, or adjourned session thereof, of the Board;
provided that nothing herein contained shall be construed to preclude any
director from serving the Company in any other capacity and receiving
compensation therefor. Members of committees may be allowed such compensation as
may be fixed from time to time by the Board for attending committee meetings.
8. Resignation.
Any director may, at any time, resign, such resignation to take effect upon
receipt of written notice thereof by the President or the Secretary, unless
otherwise stated in the resignation.
9. Telephonic Meetings.
One or more directors may participate in a meeting of the Board of
Directors, or a committee designated pursuant to Section 6 of this Article III,
by a conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear and speak to each other.
Participation in a meeting pursuant to this provision shall constitute actual
attendance at such meeting.
ARTICLE IV
OFFICERS
1. Appointment.
The Board of Directors at its first meeting after the Annual Meeting of
Stockholders, or as soon as practicable after the election of directors in each
year, may appoint from their number a Chairman of the Board and one or more Vice
Chairmen of the Board. The Board of Directors shall appoint a President, a
Secretary and a Treasurer and may also appoint one or more Vice Presidents, none
of whom need be members of the Board, and may from time to time appoint such
other officers as they may deem proper. Any two of the aforesaid offices, except
those of President and Vice President, or President and Secretary, may be filled
by the same person. The compensation of all officers of the Company shall be
fixed by the Board.
2. Term of Office.
The officers of the Company shall hold office at the pleasure of the Board
of Directors. Any officer elected or appointed by the Board may be removed from
office at any time for or without cause by the affirmative vote of a majority of
the whole Board of Directors. Any officer may resign his office at any time,
such resignation to take effect upon receipt of written notice thereof by the
Company, unless otherwise stated in the resignation. If the office of any
officer becomes vacant for any reason, the vacancy may be filled by the Board.
4
<PAGE>
3. The Chairman of the Board.
The Chairman of the Board shall be the chief executive officer of the
Company. He shall preside at all meetings of the Board of Directors and all
meetings of the stockholders. He shall have final authority subject to the
control of the Board of Directors over the general policy and business of the
Company, and shall have such other powers and duties as may from time to time be
prescribed by the Board of Directors.
4. The Vice Chairman of the Board.
Each Vice Chairman of the Board shall have such powers and duties as may
from time to time be prescribed by the Board of Directors or by the Chairman of
the Board. In the absence or inability to act of the Chairman of the Board, a
Vice Chairman of the Board, in order of seniority or priority established by the
Board, shall preside at all meetings of the Board of Directors and all meetings
of the stockholders.
5. The President.
The President shall be the chief operating officer of the Company and as
such shall have the general control and management of the business and affairs
of the Company subject, however, to the control of the Chairman of the Board.
The President shall have the power, subject to the control of the Chairman of
the Board, to appoint or discharge and to prescribe the duties and to fix the
compensation of such agents and employees of the Company as he may deem
necessary. He shall have, as does the Chairman of the Board, the authority to
make and sign bonds, mortgages and other contracts and agreements in the name
and on behalf of the Company, except when the Board of Directors by resolution
instructs the same to be done by some other officer or agent. He shall see that
all orders and resolutions of the Board of Directors are carried into effect and
shall perform all other duties necessary to his office or properly required of
him by the Board of Directors, subject, however, to the right of the directors
to delegate any specific powers, except such as may by statute be exclusively
conferred upon the President, to any other officer or officers of the Company.
In the absence or inability to act of the Chairman of the Board, the President
shall have the duties prescribed for the Chairman of the Board subject, however,
to Section 4 of this Article IV.
6. Vice Presidents.
Each Vice President shall have such powers and perform such duties as may
be assigned to him from time to time by the Chairman of the Board or the
President.
7. The Secretary.
The Secretary shall attend all sessions of the Board and all meetings of
the stockholders and record all votes and the minutes of all proceedings in a
book to be kept for that purpose, and shall perform like duties for committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and meetings of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors or the President. He
shall keep in safe custody the seal of the Company and shall see that it is
affixed to all documents, the execution of which, on behalf of the Company,
under its seal, is necessary or proper, and when so affixed may attest the same.
8. The Treasurer.
The Treasurer shall, if required by the Board of Directors, give a bond for
the faithful discharge of his duties in such amount and with such surety or
sureties as the Board of Directors may determine; the cost of any such bond, and
any expenses incurred in connection therewith, shall be borne by the Company. He
shall have the custody of the corporate funds and securities, except as
otherwise provided by the Board, and shall cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Company and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Company in such depositaries as may be designated by the Board of
Directors. He
5
<PAGE>
shall disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
the directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the financial
condition of the Company.
9. Duties of Officers may be Delegated.
In the case of the absence of any officer, or for any other reason that the
Board may deem sufficient, the President or the Board may delegate for the time
being the powers or duties of such officer to any other officer or to any
director.
ARTICLE V
STOCK CERTIFICATES
1. Issuance of Stock Certificates.
The Capital Stock of the Company shall be represented by certificates
signed by the Chairman or the President or a Vice President and by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer and sealed
with the seal of the Company. Such seal may be a facsimile, engraved or printed
and where any such certificate is signed by a transfer agent or transfer clerk
and by a registrar the signatures of any officers appearing thereon may be
facsimiles, engraved or printed.
2. Lost Stock Certificates.
The Board of Directors may by resolution adopt, from time to time, such
regulations concerning the issue of any new or duplicate certificates for lost,
stolen or destroyed stock certificates of the Company as shall not be
inconsistent with the provisions of the laws of the State of New York as
presently in effect or as they may hereafter be amended.
3. Transfers of Stock.
Transfers of stock shall be made only on the stock transfer books of the
Company, and, except in the case of any such certificate which has been lost,
stolen or destroyed, in which case the resolutions of the Board then in effect
respecting lost, stolen or destroyed stock certificates shall be complied with,
such transfer shall only be made upon surrender to the Company of a certificate
for shares for cancellation duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon the issue of a new
certificate to the person entitled thereto, the Company shall cancel the old
certificate and record the transaction upon its books.
4. Regulations.
Except to the extent that the exercise of such power shall be prohibited or
circumscribed by these By-laws, by the Certificate of Incorporation, or other
certificate filed pursuant to law, or by statute, the Board of Directors shall
have power to make such rules and regulations concerning the issuance,
registration, transfer and cancellation of stock certificates as it shall deem
appropriate.
6
<PAGE>
ARTICLE VI
SEAL
The seal of the Company shall be circular in form, shall bear the legend:
"The New York Times Company-1851 Inc. 1896" and shall contain in the center the
letters NYT.
ARTICLE VII
CHECKS
All checks or demands for money and notes of the Company shall be signed by
such officer or officers or such other person or persons as the Board of
Directors may from time to time designate.
ARTICLE VIII
BOOKS OF ACCOUNT AND STOCK BOOK
The Company shall keep at its principal office correct books of account of
all its business and transactions. A book to be known as the stock book,
containing the names alphabetically arranged, of all persons who are
stockholders of the Company, showing their places of residence, the number of
shares of stock held by them respectively, the times when they respectively
became the owners thereof, and the amount paid thereon, shall be kept at the
principal office of the Company or its transfer agent.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company shall be the calendar year unless otherwise
provided by the Board of Directors.
ARTICLE X
VOTING SECURITIES
Unless otherwise ordered by the Board of Directors, the President, or, in
the event of his absence or inability to act, the Vice Presidents, in order of
seniority or priority established by the Board or by the President, unless and
until the Board shall otherwise direct, shall have full power and authority on
behalf of the Company to attend and to act and to vote, or to execute in the
name and on behalf of the Company a proxy authorizing an agent or
attorney-in-fact for the Company to attend and to act and to vote at any
meetings of security holders of corporations in which the Company may hold
securities, and at such meetings he or his duly authorized agent or
attorney-in-fact shall possess and may exercise any and all rights and powers
incident to the ownership of such securities, and which as the owner thereof the
Company might have possessed and exercised, if present. The Board of Directors
by resolution from time to time may confer like powers upon any other person or
persons.
ARTICLE XI
INDEMNIFICATION
1. Directors and Officers. The Company shall, to the fullest extent
permitted by applicable law as the same exists or may hereafter be in effect,
indemnify any person who is or was made or threatened to be made a party to or
is involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the Company to procure a judgment in its favor and an action
by or in the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit plan or
7
<PAGE>
any other entity, which any director or officer of the Company is serving, has
served or has agreed to serve in any capacity at the request of the Company, by
reason of the fact that such person or such person's testator or intestate is or
was or has agreed to become a director or officer of the Company, or is or was
serving or has agreed to serve such other corporation, partnership, joint
venture, trust, employee benefit plan or other entity in any capacity, against
judgments, fines, amounts paid or to be paid in settlement, taxes or penalties,
and costs, charges and expenses, including attorneys' fees, incurred in
connection with such action or proceeding or any appeal therein; provided,
however, that no indemnification shall be provided to any such person if a
judgment or other final adjudication adverse to the director or officer
establishes that (i) his or her acts were committed in bad faith or were the
result of active and deliberate dishonesty and, in either case, were material to
the cause of action so adjudicated or (ii) he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled.
2. Non-Exclusivity. Nothing contained in this Article XI shall limit the
right to indemnification and advancement of expenses to which any person would
be entitled by law in the absence of this Article, or shall be deemed exclusive
of any other rights to which such person seeking indemnification or advancement
of expenses may have or hereafter may be entitled under law, any provision of
the Certificate of Incorporation, or By-laws, any agreement approved by the
Board of Directors, or a resolution of stockholders or directors; and, the
adoption of any such resolution or entering into of any such agreement approved
by the Board of Directors is hereby authorized.
3. Continuity of Rights. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article XI shall (i) apply with
respect to acts or omissions occurring prior to the adoption of this Article XI
to the fullest extent permitted by law and (ii) survive the full or partial
repeal or restrictive amendment hereof with respect to events occurring prior
thereto.
ARTICLE XII
INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS WITH THE COMPANY
A director or officer of the Company shall not be disqualified by his
office from dealing or contracting with the Company either as a vendor,
purchaser or otherwise, nor shall any transaction or contract of the Company be
void or voidable by reason of the fact that any director or officer or any firm
of which any director or officer is a member or any corporation of which any
director or officer is a shareholder, officer or director, is in any way
interested in such transaction or contract, provided that such transaction or
contract is or shall be authorized, ratified or approved either (1) by a vote of
a majority of a quorum of the Board of Directors, without counting in such
majority or quorum any director so interested or member of a firm so interested,
or a shareholder, officer or director of a corporation so interested, or (2) by
the written consent, or by the vote at any stockholders' meeting of the holders
of record of a majority of all the outstanding shares of stock of the Company
entitled to vote on such transaction or contract; nor shall any director or
officer be liable to account to this Company for any profits realized by or from
or through any such transaction or contract of the Company authorized, ratified
or approved as aforesaid by reason of the fact that he, or any firm of which he
is a member or any corporation of which he is a shareholder, officer or
director, was interested in such transaction or contract. Nothing herein
contained shall create liability in the events above described or prevent the
authorization, ratification or approval of such transactions or contracts in any
other manner permitted by law.
ARTICLE XIII
NOTICES
Whenever, under the provisions of these By-laws, notice is required to be
given to any director, officer, or stockholder, it shall not be construed to
mean personal notice, but unless otherwise expressly stated in these By-laws,
such notice may be given in writing by depositing the same in a post office or
letter box in a postpaid sealed wrapper, addressed to such stockholder, officer
or director, at such
8
<PAGE>
address as appears on the books of the Company, and such notice shall be deemed
to have been given at the time when the same was thus mailed.
ARTICLE XIV
AMENDMENT
These By-laws may be amended, altered, changed, added to or repealed by a
majority vote of all the Class B Common Stock issued and outstanding and
entitled to vote at any annual or special meeting of the stockholders, provided
that such amendments are not inconsistent with any provisions of the Company's
Certificate of Incorporation.
The Board of Directors, at any regular or at any special meeting, by a
majority vote of the whole Board, may amend, alter, change, add to or repeal
these By-laws, provided that such amendments are not inconsistent with any
provisions of the Company's Certificate of Incorporation, and provided further
that if any By-law regulating an impending election of directors is adopted or
amended or repealed by the Board, there shall be set forth in the notice of the
next stockholders meeting for the election of directors the By-laws so adopted
or amended or repealed, together with a concise statement of the changes made.
9
GLOBE VOTING TRUST
VOTING TRUST AGREEMENT dated as of October 1, 1993 by
and among the stockholders of The New York Times Company (the
"Company") who execute this Agreement (the "Holders") and
William O. Taylor, Charles H. Taylor, Benjamin B. Taylor,
Alexander B. Hawes, Jr. and Davis Taylor Pillsbury
(collectively, with their successors in trust, the "Voting
Trustees"), amending, restating and extending the Taylor
Voting Trust dated as of October 1, 1954, as heretofore
amended.
RECITALS
1. This Agreement may from time to time be referred to
as the "Globe Voting Trust."
2. All the initial Holders were indirect stockholders
of Affiliated Publications, Inc. ("API"), prior to the merger
of a subsidiary of the Company into API, by reason of their
participation in the Taylor Voting Trust.
3. On October 1, 1993, the Taylor Voting Trust became
entitled to receive shares of Class A Common Stock of the
Company ("Class A Stock") upon the merger of the subsidiary
of the Company into API.
4. The Holders are unanimously of the opinion that,
throughout the term of this Agreement, the operation of this
Agreement in accordance with its terms (i) would assure the
voting of shares of Class A Stock deposited hereunder
("Deposited Stock") as a unit for the election of a Board of
Directors of the Company and on other matters as provided
herein, (ii) would be conducive to safe and prudent
management of the Company, (iii) would support the current
emphasis of the Company on maintaining the independence and
editorial excellence of its newspaper properties, including
The Boston Globe, and a long-term corporate perspective for
the benefit of its shareholders, employees, communities,
suppliers and readers and (iv) would be in the interests of
all the Holders and also in the interests of the beneficial
<PAGE>
-2-
owners of any such additional shares of Class A Stock as may
be deposited hereunder.
5. API shares were also held by the Jordan Voting
Trust pursuant to a Voting Trust Agreement dated as of
January 29, 1987, as amended, established by the trustees of
the Jordan Trust created pursuant to the Will of Eben D.
Jordan. Such API shares have also been converted into Class
A Stock. When the Jordan Voting Trust and the Jordan Trust
terminate on January 16, 1996 in accordance with their terms,
the beneficiaries of the Jordan Trust who receive shares of
Class A Stock upon the liquidation of the Jordan Trust will
be offered the opportunity to deposit their holdings of Class
A Stock with the Voting Trustees under this Agreement.
6. The terms "Deposited Stock" and "Class A Stock" and
words of similar import wherever appearing in this Agreement
shall be taken to be synonymous and to mean and include any
voting stock of the Company (other than Class B Common Stock
of the Company), or of any entity which is a successor of the
Company or which may from time to time be issued with respect
to or in exchange for any voting stock held by the Voting
Trustees hereunder or into which any such voting stock may be
changed as a result of any reorganization, merger,
recapitalization or similar transaction. The term "Company"
wherever appearing in this Agreement shall be taken to mean
and include the issuer of any voting stock held hereunder for
the time being as "Deposited Stock."
7. "Taylor Descendant" means a descendant by blood or
adoption of Charles H. Taylor, first Treasurer of Globe
Newspaper Company, a spouse of such descendant or a trustee
or trustees holding for the benefit of any such descendant or
descendants or for the benefit of a spouse of any such
descendant or descendants or a stock corporation all the
voting stock of which is owned by the foregoing.
8. "Jordan Descendant" means a descendant by blood or
adoption of Eben D. Jordan, a spouse of such descendant or a
trustee or trustees holding for the benefit of any such
descendant or descendants or for the benefit of a spouse of
any such descendant or descendants or a stock corporation all
the voting stock of which is owned by any of the foregoing.
NOW, THEREFORE, in consideration of the premises and of
the agreements herein contained and for other good and
valuable consideration, receipt of all of which consideration
is hereby acknowledged, the parties hereto amend, restate and
extend the Taylor Voting Trust so that it reads in its
entirety as follows:
1. Initial Interests in the Voting Trust. The
-------------------------------------------
interest of each Holder is set forth in Schedule A and shall
-------- -
<PAGE>
-3-
be reflected in transfer records maintained by the Voting
Trustees, periodic reports of which will be sent to the
Holder. Only if a Holder expressly requests that his
interest be represented by a certificate shall the Voting
Trustees issue to the Holder a Voting Trust Certificate,
registered in the name of that Holder. Certificates issued
under the Taylor Voting Trust are no longer valid and should
be destroyed.
2. Subsequent Deposits and Interests. The Voting
------------------------------------
Trustees shall accept transfer and delivery to them of
additional shares of Class A Stock from any Taylor Descendant
and from any Jordan Descendant who shall have executed a copy
of this Agreement. The interest of each person who so
becomes a Holder shall be reflected in the Voting Trustees'
transfer records. Only if such a Holder expressly so
requests shall the Voting Trustees issue a Voting Trust
Certificate. The Voting Trustees shall prepare a revised
Schedule A adding the name and address of each new Holder and
-------- -
the number of additional shares of Class A Stock so
transferred. All such additional shares shall be held by the
Voting Trustees hereunder in accordance with and subject to
the provisions of this Agreement.
3. Voting. The Voting Trustees shall vote all shares
------
of Deposited Stock as the holders of record of such shares as
follows:
(a) With respect to any shares of Class A Stock
deposited by any stockholder who is a party to the
Stockholders Agreement dated June 11, 1993 among the
Company and certain of the Stockholders (the
"Stockholders Agreement"), as required by Section 3.6 of
the Stockholders Agreement for so long as the provisions
of such Section 3.6 shall apply.
(b) On any question of selling, mortgaging,
leasing or otherwise disposing of substantially all the
assets or dissolving, merging or consolidating the
Company not governed by paragraph (a) of this Section 3,
in accordance with the written instructions of the
Holder with respect to his or her shares of Deposited
Stock.
(c) On all other matters, including the election
of directors of the Company, as recommended by the Board
of Directors of the Company.
4. Disposition of Deposited Stock by Voting Trustees.
---------------------------------------------------
The Voting Trustees shall not pledge, mortgage, sell or
otherwise dispose of any of the Deposited Stock or any
interest therein, provided, however, that if any transaction
requires the exchange or conversion of Deposited Stock, the
<PAGE>
-4-
Voting Trustee may surrender the Deposited Stock and receive
distribution in respect thereof in accordance with the terms
of the transaction and provided, further, that any
dissenters' appraisal rights in respect of any such
transaction shall be exercised by the Voting Trustees on
behalf of any Holder in accordance with the instructions of
that Holder at the Holder's expense and provided, further,
that the Voting Trustees will exercise no right of dissent
with respect to any transaction approved in accordance with
Section 3.6 of the Stockholders Agreement.
5. Transfer of Deposited Stock to Other Holders, Other
---------------------------------------------- -----
Taylor Descendants and Other Jordan Descendants. Any Holder
------------------------------------------------
may at any time and from time to time transfer his or her
interest in any shares of Deposited Stock to any other
Holder, whether by gift or by sale. Any Holder may at any
time and from time to time transfer his or her interest in
any shares of Deposited Stock to any other Taylor Descendant
or Jordan Descendant, whether by gift, by bequest or by sale,
and each recipient of an interest shall be conclusively
deemed to have assented to all the terms of this Agreement as
fully as though the recipient had executed a copy of this
Agreement as a Holder. Promptly after receiving advice of
any such transfer, the Voting Trustees shall correct Schedule
--------
A.
-
6. Withdrawal of Deposited Stock for Sale by a Holder.
---------------------------------------------------
A Holder may withdraw shares of Deposited Stock for the
purpose of selling them either to the Company or in a
broker's transaction, subject to the limitations set forth in
this Section 6. No Holder may withdraw in any calendar year
more than 20% of the total number of shares of Deposited
Stock deposited by or for him or her from time to time,
computed without deducting withdrawals in prior calendar
years. In the event that the value of any interest in shares
of Deposited Stock is taxed to any person, estate or trust by
reason of the death of any person, the 20% limitation shall
not apply to the Holder or Holders of such interest, who
shall be limited instead, in the aggregate, to the number of
shares the sale of which will generate funds in the amount of
the taxes and expenses arising by reason of such person's
death, whether or not attributable to the value of an
interest in Deposited Stock. Any Holder desiring to sell up
to and including 1,000 shares of Deposited Stock in any
calendar year may do so in one or more broker's
transactions. Any Holder desiring to sell more than 1,000
shares in any year must first offer to sell the excess shares
to the Company at the average closing price of Class A Stock
on the largest exchange on which it is listed over the ten
trading days preceding the date of the offer. Notice of the
offer shall be sent to the Company at 229 West 43rd Street,
New York, New York 10036, Attention: Secretary. If the
Company shall not have accepted the offer within ten calendar
<PAGE>
-5-
days, the Holder may sell the excess withdrawn shares in one
or more broker's transactions. If the sales shall not have
been completed within six months after the withdrawal, the
shares shall once again become Deposited Stock.
7. Withdrawal of Deposited Stock for Charitable
----------------------------------------------------
Contribution. A Holder may withdraw any number of shares for
------------
contribution to any corporation, trust of community chest,
fund or foundation, gifts to which are deductible under
Section 170(c)(2) of the Internal Revenue Code of 1986 or any
successor provisions thereto. If the contribution shall not
have been completed within six months after the withdrawal,
the remaining shares shall once again become Deposited Stock.
8. Compensation and Expenses. The Voting Trustees
---------------------------
shall serve without compensation. Each Voting Trustee shall
be entitled to reimbursement from the assets held by them
under this Agreement for such reasonable out-of-pocket
expenses as he may incur and as are reasonably incident to
the performance of his duties hereunder.
9. Dividends and Other Distributions. From all
-------------------------------------
dividends or other cash distributions received from the
Company by the Voting Trustees as record holders hereunder of
Deposited Stock, the Voting Trustees may deduct such sums as
may be required to pay any and all reasonable expenses
incurred by the Voting Trustees in the administration of this
Voting Trust Agreement. After such deductions, the Voting
Trustees shall forthwith pay to the Holders, in proportion to
their beneficial interest in the Deposited Stock, the entire
balance of the dividends and other cash distributions so
received by the Voting Trustees. Dividends and other
distributions received by the Voting Trustees in respect of
Deposited Stock in the form of voting stock of the Company
shall be held by the Voting Trustees as additional Deposited
Stock. Any other distributions of securities or property
shall be distributed by the Voting Trustees pro rata to the
Holders. In case the Company should grant to its
stockholders the right to subscribe to any securities, such
rights will be granted by the Voting Trustees pro rata to
the Holders, provided, however, that if such rights relate to
securities which would constitute Deposited Stock, such
rights may be exercised through the Voting Trustees only,
with funds provided by the respective Holders and the
securities so purchased will be retained hereunder as
additional Deposited Stock. If the Voting Trustees are
required to pay over to any government any withholding tax,
they may deduct the amount so required to be paid over from
cash distributions received and, if such distributions are
insufficient for the purpose, the Holders agree to deliver to
the Voting Trustees such amounts as they may require for the
purpose.
<PAGE>
-6-
10. Termination. This Voting Trust Agreement (a) shall
-----------
terminate on September 30, 2003, (b) may be terminated on any
earlier date as may be fixed in a written notice to the
Voting Trustees signed by the Holders of Voting Trust
Certificates representing 66-2/3% of the Deposited Stock
delivered to the Voting Trustees at least 30 calendar days
prior to the termination date so fixed in such notice and (c)
may be terminated on any earlier date by unanimous
declaration of the Voting Trustees made by written notice
addressed to the Holders at least 15 calendar days prior to
the date of expiration fixed in such declaration. Upon
termination of this Voting Trust Agreement, the Holders who
hold certificates shall promptly surrender their certificates
to the Voting Trustees for cancellation, and the Voting
Trustees shall cause to be delivered to the Holders
certificates for the Deposited Stock.
11. Resignation and Replacement. Any Voting Trustee
-----------------------------
may resign at any time by delivering to the remaining Voting
Trustees and to the Company his written resignation, to take
effect at the time of delivery. If any Voting Trustee shall
die or resign before any Jordan Descendants shall have become
Holders, the then remaining Voting Trustees shall elect a
successor Voting Trustee from among Taylor Descendants. When
any Jordan Descendant shall have become a Holder, three of
the Voting Trustees shall resign. Two of the positions shall
be filled by the Holders who are Jordan Descendants, voting
as a class (in proportion to their interests in the Globe
Voting Trust) for Jordan Descendants; and the remaining
position (the "Fifth Trustee") shall be filled by the
executive of Globe Newspaper Company, if any, who is a
director of the Company or, if none, by vote of the other
four Voting Trustees. Thereafter, any vacancy caused by
death or resignation of a Voting Trustee who is a Taylor
Descendant (but not the Fifth Trustee) shall be filled by the
Holders who are Taylor Descendants, voting as a class for a
Taylor Descendant, any vacancy caused by the death or
resignation of a Voting Trustee who is a Jordan Descendant
(but not the Fifth Trustee) shall be filled by the Holders
who are Jordan Descendants, voting as a class for a Jordan
Descendant, and any vacancy caused by the death or
resignation of the Fifth Trustee shall be filled in the same
manner as the vacancy filled by election of the original
Fifth Trustee. Each and every power granted to a Voting
Trustee under this Voting Trust Agreement shall vest in each
and every successor Voting Trustee immediately upon his or
her appointment and acceptance of said office. Each
successor Voting Trustee shall be deemed to have accepted
said office upon delivery of a writing to that effect to the
remaining Voting Trustees and to the Company.
12. Standards of Conduct. In voting or consenting or
--------------------
taking or failing to take any action with respect to the
<PAGE>
-7-
Deposited Stock, the Voting Trustees shall exercise their
best judgment with respect to the proper management of the
Company and the best interests of the Holders, but it is
understood and agreed that no Voting Trustee incurs any
liability as Voting Trustee hereunder, except for his own
individual malfeasance, and no Voting Trustee shall be
responsible for the acts or omissions of any other Voting
Trustee hereunder. The Voting Trustees may vote any shares
of Deposited Stock held by them in their own interests in
each case without any liability to account. The Voting
Trustees or any firms of which they may be members or any
corporations of which they may be stockholders, directors,
officers or counsel may enter into any contract or financial
arrangements with, or be pecuniarily interested in any matter
or transaction with, the Company as fully as though the
Voting Trustees were not Voting Trustees hereunder.
13. Proof of Authority of Voting Trustees. No person
--------------------------------------
dealing with the Voting Trustees or their agents shall be
bound to make any inquiry concerning the authorization or
validity of any act purporting to be done by the Voting
Trustees or their agents. Any certificate signed by the
Voting Trustees shall be conclusive evidence of the matters
contained therein in favor of all persons acting in good
faith in reliance thereon.
14. Notices. All notices to Holders shall be given by
-------
mail at the address furnished by the Holders to the Voting
Trustees. All notices to the Voting Trustees shall be c/o
Bingham, Dana & Gould, 150 Federal Street, Boston,
Massachusetts 02110, Attention: Director of Fiduciary
Services.
15. Amendments. This Agreement may be amended at any
----------
time by a written instrument executed by all of the Voting
Trustees then acting and consented to in writing by the
Holders of interests in two-thirds or more of the Deposited
Stock.
16. Securities Law Representation and Transfer
----------------------------------------------------
Restriction. Each Holder represents and warrants to the
-----------
Voting Trustees that the Holder's interest in the Voting
Trust is being acquired for the Holder's own account for
investment only and not with a view to any resale or
distribution thereof, and each Holder agrees that no interest
in the Globe Voting Trust may be sold or otherwise disposed
of in violation of the Securities Act of 1933, as amended.
The Holder understands that the Holder's interest must be
held indefinitely unless transfers are made in compliance
with applicable law and understands that any certificate that
may be issued to evidence the Holder's interest in the Globe
Voting Trust will bear the following restrictive legend:
<PAGE>
-8-
"This security has not been registered under the
Securities Act of 1933 and may not be sold,
assigned or otherwise transferred in the absence of
an effective registration statement under that Act
or an opinion of counsel satisfactory to the issuer
that registration under that act is not required."
17. Acceptance of Trust. The Voting Trustees hereby
--------------------
accept the trust created hereby and agree that they will in
good faith in all respects exercise the powers granted to
them hereunder or accruing to them by reason of the ownership
of Deposited Stock in trust as herein provided.
18. No Action Inconsistent with Stockholders Agreement.
---------------------------------------------------
Notwithstanding the express provisions of Sections 5, 6, 7
and 15 of this Agreement, transfer of interests in Deposited
Stock and transfer of Deposited Stock will at no time be made
by any Holder bound by the Stockholders Agreement in
violation of any of the provisions of the Stockholders
Agreement.
19. Counterparts. This Agreement may be signed in any
------------
number of counterparts, with Holders signing separate
counterparts; and all counterparts taken together shall
constitute a single instrument.
IN WITNESS WHEREOF, the Voting Trustees and the Holders
have caused this Voting Trust Agreement to be executed and
delivered on the date first written above.
s/ William O. Taylor s/ Alexander B. Hawes, Jr.
----------------------------- -----------------------------
William O. Taylor Alexander B. Hawes, Jr.
s/ Charles H. Taylor s/ Davis Taylor Pillsbury
----------------------------- -----------------------------
Charles H. Taylor Davis Taylor Pillsbury
s/ Benjamin B. Taylor
-----------------------------
Benjamin B. Taylor
Charles H. Taylor
-----------------------------
Name of Holder
s/ Charles H. Taylor
-----------------------------
Signature
<PAGE>
SCHEDULE A
NYTCO SHS DEPOSITED TO:
** GLOBE VOTING TRUST ** 12/29/93
# of NYT A
Shs to
UNITHOLDER GLOBE
VTG TR
C H TAYLOR 1993 GLOBE TRUST 199,656
C H TAYLOR GLOBE FAMILY TRUST 248,400
ROSAMOND T DYE REV TRUST 61,531
PAMELA S COTHEY REV TRUST 10,638
CHARLES H TAYLOR 85,560
CHARLES H TAYLOR 88 IRR TRUST 19,440
STEPHEN EMYLIN TAYLOR 10,000
E B TAYLOR STUART 13,230
PAMELA ROGERS WETZELS 127,291
KATRINA WETZELS TRUST 15,921
THOMAS T WETZELS TRUST 15,921
PETER BLACK 1,636
SYLVIA BLACK RIPLEY 20,787
EMILY TAYLOR ANDREWS 460,272
EUNICE T VANDERHOEF TRUST 248,380
ELIZABETH T FESSENDEN TRUST 625,817
LOUISE C RIEMER (MOTHER) 4,708
KARL DAVIS RIEMER 2,760
LOUISE C REIMER (DAUGHTER) 2,760
HENRY F REIMER 2,220
ELIZABETH L RIEMER REECE 2,760
KATHARINE C FEGUSON TRUST 4,708
WILLIAM DAVIS TAYLOR REV TR 289,681
ANNE MACY TAYLOR REV TRUST 26,907
WILLIAM OSGOOD TAYLOR 426
WILLIAM OSGOOD TAYLOR 20,449
WILLIAM OSGOOD TAYLOR 42,970
WILLIAM DAVIS TAYLOR II 499
EDMUND C TAYLOR 180
EDMUND C TAYLOR 630
OLIVIA P HEARFIELD TRUST 387,403
EVANS S PILLSBURY III MAR TRUST 311,318
EVANS S PILLSBURY III RES TR 192,218
TAYLOR PILLSBURY GLOBE TRUST 129,822
ELIZ SCULLY MARCHEWKA 9,570
<PAGE>
NYTCO SHS DEPOSITED TO:
** GLOBE VOTING TRUST ** 12/29/93
# of NYT A
Shs to
UNITHOLDER GLOBE
VTG TR
MARGARET B TAYLOR FAM TRUST 22,200
BLAKE TAYLOR CHLDRN'S TRUST 184,548
JOHN I TAYLOR REV TRUST 117,734
CARSON TAYLOR 1,338
TIMOTHY B TAYLOR REV TRUST 79,864
DAVID V N TAYLOR REV TRUST 149,662
SHELLEY G HALL-TAYLOR REV TR 30,000
SUSAN D CONNER 1,000
ELIZA TAYLOR 6,676
MATTHEW VAN NESS TAYLOR 6,676
BENJAMIN B TAYLOR REV TRUST 194,312
KATHERINE S TAYLOR REV TRUST 1,338
ABIGAIL TAYLOR 1,781
SAMUEL S TAYLOR 1,781
WILLIAM I TAYLOR 1,781
LITTLE CHILDREN'S TRUST 116,098
ALEXANDER BOYD HAWES TRUST 242,852
ALEXANDER BOYD HAWES 1,330
ELIZABETH SAVAGE WRIGHT 1,526
JOHN WRIGHT 238
MATT. ARMSTRONG HAWES TR 55,384
CHRIS. DeBOUVRY HAWES TRUST 8,533
TOTAL NYTCO SHARES DEPOSITED 4,823,121
---------
---------
EXHIBIT 10.2
The New York Times Company
1991 EXECUTIVE STOCK INCENTIVE PLAN
As approved by Class A and Class B Shareholders on April 16, 1991
As amended by the Board of Directors on April 13, 1993
__________________________________________________________________
N Y T
<PAGE>
THE NEW YORK TIMES COMPANY
1991 EXECUTIVE STOCK INCENTIVE PLAN
1. NAME AND GENERAL PURPOSE
The name of this plan is The New York Times Company 1991 Executive Stock
Incentive Plan (hereinafter called the "Plan"). The purpose of the Plan is to
enable the Company (as hereinafter defined) to retain and attract executives
who enhance its tradition and contribute to its success by their ability,
ingenuity and industry, and to enable them to participate in the long-term
success and growth of the Company.
2. DEFINITIONS
(a) "Awards"--has the meaning specified in Section 12 hereof.
(b) "Board"--means the Board of Directors of the Company.
(c) "Cash Plan"--means the Company's 1991 Executive Cash Bonus Plan.
(d) "Code"--means the Internal Revenue Code of 1986, as amended.
(e) "Committee"--means the Committee referred to in Section 3 of the
Plan. If at any time no Committee shall be in office then the functions of the
Committee specified in the Plan shall be exercised by those members of the
Board who are Disinterested Persons.
(f) "Common Stock"--means shares of the Class A Common Stock of the
Company.
(g) "Company"--means The New York Times Company, a corporation organized
under the laws of the State of New York (or any successor corporation), and
its subsidiaries (as hereinafter defined) and other non-corporate entities in
which it owns directly or indirectly 40% or more of the equity interests. A
"subsidiary" means any corporation in which the Company possesses directly or
indirectly 50% or more of the combined voting power of all classes of stock.
(h) "Consolidated Statement of Income"--means the consolidated statement
of income (or any comparable statement, however designated) of the Company,
audited by the independent certified public accountants of the Company and
contained in the Company's annual report to stockholders or proxy statement.
(i) "Disability"--means total disability as defined under the Company's
long term disability plan, whether or not the Participant is covered by such
plan, as determined by the Committee.
(j) "Disinterested Person"--means any Director of the Company who at the
time of acting is a "disinterested person" under Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(k) "Equity in Operations of Forest Products Group"--means the amount
designated as Equity in Operations of the Forest Products Group for the
applicable year and shown separately in the Consolidated Statement of Income
for such year.
(l) "Fair Market Value"--means the arithmetic mean of the highest and
lowest sales prices of the Common Stock as reported in the Consolidated
Transactions of the American Stock Exchange ("AMSE") (or such other national
securities exchange on which the Common Stock may be listed at the time of
determination, and if the Common Stock is listed on more than one exchange,
then on the one located in New York or if the Common Stock is listed only on
the National Association of Securities Dealers Automated Quotations System
("NASDAQ"), then on such system) on the date of the grant or other date on
which the Common Stock is to be valued hereunder. If no sale shall have been
made on the AMSE, such other exchange or the NASDAQ on such date or if the
Common Stock is not then listed on
1
<PAGE>
any exchange or on the NASDAQ, Fair Market Value shall be determined by the
Committee in accordance with Treasury Regulations applicable to incentive
stock options.
(m) "Participant"--means a key employee of the Company who is selected by
the Committee to participate in any one or more parts of the Plan from among
persons who in the judgment of the Committee are key employees of the Company.
In general, key employees are those employees who have principal
responsibility for, or who contribute substantially to, the management
efficiency, editorial achievement or financial success of the Company.
(n) "Pre-Tax Income"--means income before income taxes and Equity in
Operations of Forest Products Group, as shown in the Consolidated Statement of
Income for the applicable year, but before the amount of any provision for
Awards under the Plan and awards under the Cash Plan for such year.
(o) "Retirement"--means retirement as defined by the terms of "The New
York Times Companies Pension Plan" which became effective December 31, 1988,
or any successor retirement plan whether or not the Participant is a member of
such retirement plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board or the Committee appointed by
it and composed of two or more directors all of whom shall be Disinterested
Persons. The membership of the Committee shall be constituted so as to comply
at all times with the applicable requirements of Rule 16b-3. The Committee
shall serve at the pleasure of the Board and shall have such powers as the
Board may from time to time confer upon it.
4. OPTIONS AND AWARDS UNDER THE PLAN
Options, which include "Non-Qualified Options" and "Incentive Stock
Options" or combinations thereof, are rights to purchase Common Stock of the
Company. Non-Qualified Options and Incentive Stock Options are subject to the
terms, conditions and restrictions provided in Part I of the Plan.
Awards under the Plan may include one or more of the following types,
either alone or in any combination thereof: (i) "Stock Awards," (ii)
"Restricted Stock Awards," (iii) "Retirement Unit Awards," and (iv)
"Performance Awards" or "Other Awards."
Stock Awards are granted under Part IIA of the Plan. Restricted Stock
Awards are granted under Part IIB of the Plan. Retirement Unit Awards are
granted under Part IIC of the Plan. Performance Awards or Other Awards are
granted under Part IID of the Plan. Awards are subject to the terms,
conditions and restrictions provided in the respective subparts of Part II of
the Plan.
PART I STOCK OPTIONS.
5. PURPOSE
The purpose of the Stock Option portion of the Plan is to provide an
added incentive for effective service and high levels of performance to
participating key employees of the Company by affording them an opportunity,
under the terms of the Plan, to acquire Common Stock and thereby to increase
their proprietary interest in the continued progress and success of the
Company.
6. DETERMINATION OF OPTIONEES; SHARES SUBJECT TO OPTIONS
(a) The Committee may grant options to purchase Common Stock ("Options")
to key employees of the Company in such amounts as the Committee may
determine, subject to the conditions and limitations set forth in the Plan.
Options may be granted in combination with Awards made under the Plan, and
Options may be granted to any Participant whether or not he or she was
eligible for, or received, an Award.
2
<PAGE>
(b) There may be issued under the Plan pursuant to the exercise of
Options, an aggregate of not more than 10,000,000 shares of Common Stock,
subject to adjustment as provided in Sections 28 and 29 hereof. Shares of
Common Stock issued pursuant to Options may be either authorized but unissued
shares, treasury shares, reacquired shares, or any combination thereof. Any
shares subject to an Option which expires without being exercised shall be
available for issuance under new Options.
7. OPTION PRICE
The exercise price of Common Stock subject to Options granted pursuant to
the Plan shall be the Fair Market Value thereof at the time the Option is
granted. If a Participant owns or is deemed to be the owner of, by reason of
the attribution rules under Section 425(d) of the Code, more than 10% of the
combined voting power of all classes of the stock of the Company or any
subsidiary of the Company and an Option granted to such Participant is
intended to qualify as an Incentive Stock Option within the meaning of Section
422 of the Code, the option price shall be no less than 110% of the Fair
Market Value of the Common Stock on the date the Option is granted.
8. PAYMENT OF OPTION PRICE
The purchase price is to be paid in full when the Option is exercised and
stock certificates will be delivered only against such payment. Such purchase
price may be paid in such form as the Committee may determine. Payment of the
option price may be made (i) in cash, (ii) by delivering a properly executed
exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the purchase price, (iii) by delivering to the Company
shares of Common Stock previously owned, (iv) by electing to have the Company
retain Common Stock which would be otherwise issued on exercise of the Option,
or (v) any combination of the foregoing forms, all subject to the approval of
the Committee and to such rules as the Committee may adopt. In determining the
number of shares of Common Stock necessary to be delivered to or retained by
the Company, such Common Stock shall be valued at Fair Market Value.
9. TYPES OF STOCK OPTIONS
(a) Options granted under the Plan may be two types, an incentive stock
option ("Incentive Stock Option") and a non-qualified stock option
("Non-Qualified Option"). It is intended that Incentive Stock Options granted
hereunder shall constitute incentive stock options within the meaning of
Section 422 of the Code. Anything in the Plan to the contrary notwithstanding,
(i) no provision of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify either the Plan or any
Incentive Stock Option granted under such provisions of the Code, and (ii) no
Option designated by the Committee as a Non-Qualified Option shall constitute
an Incentive Stock Option. In furtherance of the foregoing and not by way of
limitation, no Incentive Stock Option shall be granted to a Participant who is
not an employee of The New York Times Company or one of its subsidiaries.
(b) If the aggregate Fair Market Value of the Common Stock (determined as
of the date of grant) for which any optionee may for the first time exercise
Incentive Stock Options in any calendar year under the Plan and any other
stock option plan of the Company, considered in the aggregate, exceeds
$100,000, such excess Incentive Stock Options will be treated as Non-Qualified
Options.
10. TERMS OF STOCK OPTIONS
(a) Each Option will be for a term of not more than ten years from the
date of grant, except that if a Participant owns or is deemed to be the owner
of, by reason of the attribution rules of Section 425(d) of the Code, more
than 10% of the combined voting power of all classes of stock of the Company
or any subsidiary of the Company and an Incentive Stock Option is granted to
such Participant, the term of such Option shall be no more than five years
from the date of grant.
3
<PAGE>
(b) An Option may not be exercised within one year after the date of
grant except in the case of the death of the optionee or upon termination of
active employment with the Company by reason of the Disability or Retirement
of the optionee during such period (but subject to the provisions of Section
18 hereof with respect to any optionee subject to the reporting requirements
of Section 16 of the Exchange Act). Thereafter, an Option shall be exercisable
in such installments, if any, as the Committee may specify, and shall be
exercisable during the optionee's lifetime only by the optionee (or, if the
optionee is disabled, by any guardian or other legal representative appointed
to represent him or her) and, except as provided in subsections (c) and (d)
below, shall not be exercisable by the optionee unless at the time of exercise
such optionee is an employee of the Company.
(c) Upon termination of active employment with the Company by reason of
Disability or Retirement, an optionee (or, if the optionee is disabled, any
guardian or legal representative appointed to represent him or her) may
exercise all Options otherwise exercisable by him or her at the time of such
termination of employment (subject to the provisions of subsection (e) below)
until the expiration thereof. In the event an optionee dies while employed by
the Company or after termination of employment by reason of Disability or
Retirement, the person who acquired the right to exercise his or her Options
by reason of the death of the optionee, as provided in Section 30 hereof, may
exercise such Options otherwise exercisable at the time of death (subject to
the provisions of subsection (e) below) at any time until the expiration
thereof.
(d) Upon termination of employment with the Company for any reason other
than death, Retirement or Disability, the optionee may exercise all Options
otherwise exercisable by him or her at the time of such termination of
employment for an additional one year after such termination of employment. In
the event such optionee dies within such one-year period, the person who
acquired the right to exercise his or her Options by reason of the death of
the optionee, as provided in Section 30 hereof, may exercise such Options at
any time within the period of the greater of (i) the remainder of the one-year
period described in the foregoing sentence, or (ii) three months from the date
of the optionee's death.
(e) Notwithstanding any of the foregoing, no Option shall be exercisable
in whole or in part after the expiration date provided in the Option. In the
event of the death of the optionee while employed by the Company, or the
Disability or Retirement of the optionee, the Committee shall have the
discretion to provide for the acceleration of the exercisability of Options
exercisable over a period of time, or alternatively, to provide for all or any
part of such Options to continue to become exercisable in such installments as
originally specified by the Committee, or such revised installments as
specified by the Committee at the time of termination of employment (but in no
event beyond the original expiration date), in either case subject to such
conditions as determined by the Committee in its discretion (but in all cases
subject to the provisions of Section 18 hereof with respect to any optionee
subject to the reporting requirements of Section 16 of the Exchange Act). No
Option shall be transferable otherwise than by will or by the laws of descent
and distribution.
11. OPTION AGREEMENTS
In consideration of any Options granted to a Participant under the Plan,
such Participant shall enter into an Option Agreement with the Company
providing, in addition to such other terms as the Committee may deem
advisable, that the optionee must remain in the employ of the Company for one
year before such optionee will be entitled to exercise the Option, except as
provided in Section 10 hereof with respect to death, Disability and
Retirement, and specifying the installments, if any, in which such Option
shall become exercisable.
4
<PAGE>
PART II AWARDS.
12. FORM OF AWARDS
The Award portion of the Plan is designed to provide incentives for key
employees of the Company by the making of awards of supplemental compensation
("Awards"). The Committee, subject to the terms and conditions hereof, may
make Awards to a Participant in any one, or in any combination, of the
following forms:
(a) Common Stock as provided in Part IIA of the Plan ("Stock
Awards");
(b) Restricted Stock as provided in Part IIB of the Plan
("Restricted Stock Awards");
(c) Retirement Units as provided in Part IIC of the Plan
("Retirement Unit Awards"); and
(d) Performance Awards ("Performance Awards") or other forms of
Awards ("Other Awards") as provided in Part IID of the Plan.
Awards may be made to a Participant whether or not he or she is receiving an
Option grant under Part I of the Plan for the year and whether or not he or
she receives an award under the Cash Plan.
Awards will be based on a Participant's performance in those areas for
which the Participant is directly responsible. Performance for this purpose
may be measured by the achievement of specific management goals such as, but
not limited to, an increase in earnings or the operating cash flow of the
Company, outstanding initiative or achievement in any department of the
Company, or any other standards specified by the Committee.
13. MAXIMUM AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER PART II OF THE
PLAN FOR ANY YEAR
(a) No accrual for Awards shall be made hereunder (or under the Cash
Plan) for any year unless cash dividends of not less than ten cents ($.10) per
share (subject to adjustment as provided in Sections 28 and 29 hereof) have
been declared on the outstanding Class A and Class B Common Stock of the
Company during such year.
(b) In the event that the above condition is met for any year during the
continuance of this Plan, the maximum aggregate amount that may be accrued for
Awards under the Plan and the Cash Plan for such year shall be 4% of the sum
of: (1) Pre-Tax Income plus (2) Equity in Operations of Forest Products Group.
The Committee, in its sole discretion, may make adjustments in Pre-Tax Income
and Equity in Operations of Forest Products Group to take account of
extraordinary, unusual or infrequently occurring events and transactions,
changes in accounting principles that substantially affect the foregoing, or
such other circumstances as the Committee may determine warrant such
adjustment.
(c) As soon as feasible after the close of each year, the independent
certified public accountants of the Company shall report the maximum amount
that may be accrued for Awards for such year under the formula described in
Section 13(b), subject to the second sentence of such Section.
(d) If amounts are accrued in any year under the formula described in
this Section 13 and are not awarded in full in such year under the Plan and
the Cash Plan, such unawarded amounts may, in the discretion of the Committee,
be carried forward and be available for Awards under the Plan and under the
Cash Plan in any future year without regard to the provisions of Sections
13(a) or (b) of the Plan applicable to Awards made in such year.
(e) Awards under the Plan for any year may not exceed the sum of (i) the
amount accrued for such year under Section 13(b) above plus (ii) unawarded
accrued amounts carried forward from previous years under Section 13(d) above
plus (iii) amounts that may become available for Awards pursuant to the last
sentence of Section 15(c) hereof, minus (x) the amount of interest or dividend
equivalents set aside during such year pursuant to Section 15(c) hereof and
the amount of dividend equivalents allocated to Retirement Unit Accounts
during such year pursuant to Section 24 hereof, and minus (y)
5
<PAGE>
the amount of awards made for such year under the Cash Plan (and any interest
equivalents allocated during such year pursuant to Section 10(b) thereof). For
this purpose, the amount of Awards of Common Stock under the Plan shall be
based on the Fair Market Value of the Common Stock subject to Awards as of the
date of grant of such Awards.
(f) Subject to Sections 28 and 29 hereof, the aggregate number of shares
of Common Stock for which Stock, Restricted Stock, Retirement Units,
Performance and Other Awards may be made under the Plan shall not exceed
1,000,000 shares, which shall be treasury shares reserved for issuance of
Awards under the Plan. Shares of Common Stock subject to, but not issued
under, any deferred Award which has been discontinued by the Committee
pursuant to the provisions hereof or any Restricted Stock which is forfeited
by any Participant shall again be available for Awards under the Plan.
14. DETERMINATION OF AWARDS AND PARTICIPANTS
(a) As promptly as practicable after the end of each year, the Committee
may make Awards for such year and determine the amounts to be carried forward
for Awards in future years. The Committee may also, in its discretion, make
Awards prior to the end of the year based on the amounts available under
clauses (ii) and (iii) of Section 13(e) and reasonable estimates of the
accrual for the year in question.
(b) The Committee shall have absolute discretion to determine the key
employees who are to receive Awards under the Plan for any year and to
determine the amount of such Awards based on such criteria and factors as the
Committee in its sole discretion may determine, such as the Company's
operating cash flow and overall financial performance. Recommendations as to
the key employees who are to receive Awards under the Plan for any year and as
to the amount and form of such Awards shall, however, be made to the Committee
by the chief executive officer of the Company. The fact that an employee is
selected as eligible for an Award shall not mean, however, that such employee
will necessarily receive an Award.
(c) A person whose employment terminates during the year or who is
granted a leave of absence during the year may, in the discretion of the
Committee and under such rules as the Committee may from time to time
prescribe, be given an Award with respect to the period of such person's
service during such year.
15. METHOD AND TIME OF PAYMENT OF AWARDS
(a) Awards shall be paid in full as soon as practicable after the Award
is made; provided, however, that the payment of any or all Awards may be
deferred, divided into annual installments, or made subject to such other
conditions as the Committee in its sole discretion may authorize under such
rules and regulations as may be adopted from time to time by the Committee.
(b) The Committee's rules and regulations may include procedures by which
a Participant expresses a preference to the Committee as to the form of Award
or method of payment of an Award but the final determination as to the form
and the terms and conditions of any Award shall rest solely with the
Committee.
(c) Awards deferred under the Plan shall become payable to the
Participant or, in the event of the Participant's death, as specified in
Section 30 hereof, in such manner, at such time or times (which may be either
before or after Retirement or other termination of service), and subject to
such conditions as the Committee in its sole discretion shall determine. In
any year the Committee shall have the discretion to set aside, for payment in
such year or any future year, interest on any deferred Award payable partly in
cash, and amounts equivalent to dividends on any deferred Award payable wholly
or partly in stock; provided, however, that the total amount of such interest
and dividend equivalents shall be deducted from the maximum amount available
for Awards under Section 13(e) of the Plan. Any forfeited deferred Awards
(including any forfeited stock at its Award value) shall be carried forward
and be
6
<PAGE>
available for Awards in any future year without regard to the provisions of
Sections 13(a) or (b) of the Plan.
16. INDIVIDUAL AGREEMENTS
(a) The Committee may in its discretion require that each Participant
receiving an Award enter into an agreement with the Company which shall
contain such terms and conditions as the Committee in its discretion may
require.
(b) The Committee may cancel any unexpired, unpaid or deferred Award at
any time if the Participant is not in compliance with all applicable
provisions of the agreement referred to above, if any, and the Plan.
17. STATUS OF PARTICIPANTS
No Participant in this Plan shall be deemed to be a stockholder of the
Company, or to have any interest in any stock or any specific assets of the
Company by reason of the fact that deferred Stock Awards, Retirement Unit
Awards, Performance Awards, Other Awards or dollar credits are to be recorded
as being held for such Participant's account to be paid in installments in the
future. The interest of all Participants shall derive from and be determined
solely by the terms and provisions of the Plan set forth herein.
18. DISPOSITION OF STOCK RECEIVED UNDER AN AWARD; SECTION 16(B).
In the case of any Participant subject to the reporting requirements of
Section 16 of the Exchange Act, no shares of Common Stock received pursuant to
any Award under the Plan or upon the exercise of any "derivative security" (as
defined in the rules promulgated under Section 16 of the Exchange Act)
received under the Plan may be sold, assigned, pledged or otherwise
transferred for the period of time after the date of such Award or receipt of
such derivative security as is specified in Rule 16b-3.
PART IIA STOCK AWARDS.
19. DETERMINATION OF STOCK AWARDS
(a) Each year the Committee shall designate those key employees of the
Company who shall receive Stock Awards under this part of the Plan. Stock
Awards are made in the form of grants of Common Stock, which may be delivered
immediately, in installments or on a deferred date, as the Committee, in its
discretion, may provide.
(b) If the Committee determines that some portion of a Stock Award to a
Participant shall be treated as a deferred Stock Award and payable in annual
or other periodic installments, then the Participant will be notified in
writing when such deferred Stock Awards shall be paid and over what period of
time. As soon as feasible after the granting of such a Stock Award, there
shall be reserved out of the treasury shares of the Company, a number (which
may include a fraction) of shares of Common Stock equal to the number of
shares of Common Stock so awarded. In each year at the discretion of the
Committee there may also be allocated or credited to each Participant a dollar
amount equal to the cash dividends declared and paid by the Company on its
Common Stock which the Participant would have received had such Participant
been the owner of the number of shares of any Common Stock deferred for future
payment. Any amounts provided for pursuant to the preceding sentence shall
become payable in such manner, at such time or times, and subject to such
conditions (which may include provision for an amount equivalent to interest
on such dividend equivalents at rates fixed by the Committee) as the Committee
in its sole discretion shall determine; provided, however, that the total
value of such dividend equivalents (and any interest thereon) shall be
deducted from the amount available for Awards under the provisions of Section
13(e) of the Plan. The Committee in its discretion may make appropriate
equitable adjustments to such deferred Stock Award to account for any
dividends of property (other
7
<PAGE>
than cash) declared and paid by the Company on its Common Stock, or to account
for any other event described in Sections 28 and 29 hereof.
PART IIB RESTRICTED STOCK AWARDS.
20. DETERMINATION OF RESTRICTED STOCK AWARDS
Each year the Committee shall designate the key employees of the Company
who shall receive Restricted Stock Awards. Shares awarded under this part of
the Plan, while subject to the restrictions hereinafter set forth, are
referred to as "Restricted Stock".
21. TERMS OF RESTRICTED STOCK AWARDS
Any Award of Restricted Stock shall be subject to the following terms and
conditions and to any other terms and conditions not inconsistent with the
Plan as shall be prescribed by the Committee in its sole discretion and which
may be contained in the agreement, if any, referred to in Section 16 above (or
in any amendment thereto):
(a) Delivery of Restricted Stock. Unless otherwise determined by the
Committee, the Company shall transfer treasury shares to each Participant
to whom an Award of Restricted Stock has been made equal to the number of
shares of Restricted Stock specified in the Award, and hold the
certificates representing such shares of Restricted Stock for the
Participant for the period of time during which such shares shall remain
subject to the restrictions set forth in the Award (the "Restricted
Period"). Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered by a
Participant during the Restricted Period, except as hereinafter provided.
Except for the restrictions set forth herein and unless otherwise
determined by the Committee, a Participant shall have all the rights of a
stockholder with respect to the shares of Restricted Stock comprising his
or her Award, including, but not limited to, the right to vote and the
right to receive dividends (which if in shares of Common Stock shall be
Restricted Stock under the same terms and conditions).
(b) Lapse of Restricted Period. The Restricted Period shall commence upon
the date of the Award (which unless otherwise specified by the Committee
shall be the date the Restricted Stock is transferred to the Participant)
and, unless sooner terminated as otherwise provided herein, shall
continue for such period of time as specified by the Committee in the
Award, which shall in no event be less than one year, and thereafter
shall lapse in such installments, if any, as provided by the Committee in
the Award.
(c) Legend. Each certificate issued in respect of shares of Restricted
Stock transferred or issued to a Participant under an Award shall be
registered in the name of the Participant and shall bear the following
(or a similar) legend:
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY
ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE NEW
YORK TIMES COMPANY 1991 EXECUTIVE STOCK INCENTIVE PLAN (THE
"PLAN") APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED
STOCK AGREEMENT DATED (THE "AGREEMENT"),
AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN ANY
MANNER DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH
AGREEMENT. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE
WITH THE SECRETARY OF THE COMPANY."
(d) Death or Disability. Unless the Committee shall otherwise determine in
the Award (and subject to Section 18 hereof), if a Participant ceases to
be employed by the Company by reason of
8
<PAGE>
death or Disability, the Restricted Period covering all shares of
Restricted Stock transferred or issued to such Participant under the Plan
shall immediately lapse.
(e) Retirement. Unless the Committee shall otherwise determine in the
Award (and subject to the provisions of Section 18 hereof), the
Restricted Period covering all shares of Restricted Stock transferred to
a Participant under the Plan shall immediately lapse upon such
Participant's Retirement, whether early or not.
(f) Termination of Employment. Unless the Committee shall otherwise
determine in the Award or otherwise determine at or after the date of
grant, if a Participant ceases to be employed by the Company other than
due to a condition described in Sections 21(d) or (e) above, all shares
of Restricted Stock owned by such Participant for which the Restricted
Period has not lapsed shall revert back to the Company upon such
termination. Authorized leave of absence or absence in military service
shall constitute employment for the purposes of this Section 21(f).
Whether absence in government service may constitute employment for the
purposes of the Plan shall be conclusively determined by the Committee.
(g) Waiver of Forfeiture Provisions. The Committee, in its sole and
absolute discretion (but subject to the provisions of Section 18 hereof),
may waive the forfeiture provisions in respect of all or some of the
Restricted Stock awarded to a Participant.
(h) Issuance of New Certificates. Upon the lapse of the Restricted Period
with respect to any shares of Restricted Stock, such shares shall no
longer be subject to the restrictions imposed in the Award and shall no
longer be considered Restricted Stock for the purposes of the Award and
the Plan, and the Company shall issue new share certificates respecting
such shares registered in the name of the Participant without the legend
described in Section 21(c) in exchange for those previously issued.
PART IIC RETIREMENT UNIT AWARDS.
22. DETERMINATION OF RETIREMENT UNIT AWARDS
Each year the Committee shall designate those key employees of the
Company who shall receive Retirement Unit Awards under the Plan. The Company
shall create and maintain appropriate records of account for each Participant
which shall be designated as the Participant's Retirement Unit Account.
23. CREDITS TO RETIREMENT UNIT ACCOUNTS
The Committee shall allocate to each Participant selected to receive a
Retirement Unit Award for that year such dollar amount as the Committee shall
determine, taking into account the value of the Participant's services to the
Company. Such dollar amount shall thereupon be converted into Retirement Units
or fractions of Units and credited to each such Participant's Retirement Unit
Account in a number equal to the quotient obtained by dividing such allocated
dollar amount by the Fair Market Value of one share of Common Stock as of the
date the allocation is made.
24. DIVIDEND CREDITS
At the discretion of the Committee there may also be allocated in each
year to each Participant a dollar amount equal to the cash dividends declared
and paid by the Company on the Common Stock which the Participant would have
received had such Participant been the owner of the number of shares of Common
Stock equal to the number of the whole Retirement Units (but not fractional
Units) credited to the Participant's Retirement Unit Account; provided,
however, that the total value of such dividend equivalents shall be deducted
from the amount available for Awards under Section 13 of the Plan. The dollar
amounts allocated shall be converted into and credited to the Participants'
Retirement Unit Accounts as Retirement Units or fractions thereof as set forth
in Section 23 above as of the date on
9
<PAGE>
which such dividends were paid by the Company. No interest shall be paid on
the dollar amount so allocated to the Retirement Unit Account of any
Participant. The Committee in its discretion may make appropriate equitable
adjustments to such Retirement Unit Accounts to account for any dividends of
property (other than cash) declared and paid by the Company on its Common
Stock, or to account for any other event described in Sections 28 and 29
hereof.
25. RESERVATION OF STOCK AND ACCOUNTING RECORDS
The Company shall keep records of the Participant's Retirement Unit
Accounts. At the time of any allocation to a Participant's account under
Sections 23 or 24 hereof, there shall be reserved out of treasury shares of
the Company a number (which may include a fraction) of shares of Common Stock
equal to the number of Units or fraction thereof so allocated.
26. MATURITY AND PAYMENT AFTER MATURITY
(a) The Retirement Unit Account of each Participant shall mature upon
such Participant's death, Retirement or other termination of employment.
(b) After maturity, the Company shall deliver to the Participant (or in
the event of the death of the Participant, as specified in Section 30 hereof)
in ten approximately equal annual installments, shares of Common Stock equal
in the aggregate to the number of Retirement Units credited to the
Participant's Retirement Unit Account. Any fraction of a Unit credited to the
Participant's account at maturity shall be paid in cash with the first
installment, the fractional Unit being converted into cash at the Fair Market
Value of the Common Stock on such first payment date. The first such
installment shall be paid within 90 days after maturity. However, the
Committee in its discretion at or any time after maturity may, with the
consent of the Participant (or the beneficiary of a deceased Participant as
specified in Section 30 hereof), (i) defer the commencement of such
distribution or defer any installment, (ii) deliver full payment of the shares
of Common Stock equal to the aggregate number of Retirement Units credited to
the Participant's Retirement Unit Account and the dollar amount credited
thereto, or (iii) reduce or increase the number of annual installments in
which the payments are to be made.
(c) So long as Retirement Units remain credited to the Retirement Unit
Account of a Participant subsequent to maturity, such account shall be
credited with the dollar amount allocated to the account as dividends as
provided for in Section 24 hereof. Any dollar amount so credited may be paid
in cash with the next succeeding annual installment made under Section 26(b)
above, or in such manner, at such time or times, and subject to such
conditions as the Committee in its sole discretion shall determine; provided,
however, that in the case of any dollar amount credited to an account after
maturity in respect of a dividend declared prior to maturity, such dollar
amounts shall be converted to Retirement Units as of the date of payment and
the remaining installments of Common Stock shall be increased accordingly.
PART IID PERFORMANCE OR OTHER AWARDS.
27. DETERMINATION OF PERFORMANCE AND OTHER AWARDS
(a) Each year the Committee in its sole discretion may authorize other
forms of Awards such as, but not limited to, Performance Awards, if the
Committee deems it appropriate to do so in order to further the purposes of
the Plan.
(b) A "Performance Award" shall mean an Award which entitles the
Participant to receive Common Stock, Restricted Stock, Retirement Units,
Options under Part I of the Plan or other compensation (which may include
cash), or any combination thereof, in an amount which depends upon the
financial performance of the Company during a stated period of more than one
year. Performance for this purpose may be measured by the growth in book value
of the Common Stock, an increase in per
10
<PAGE>
share earnings of the Company, an increase in operating cash flow, or any
other indicators specified by the Committee. The Committee shall also fix the
period during which such performance is to be measured, the value of a
Performance Award for purposes of providing for the accrual pursuant to
Section 13 of the Plan and the form of payment to be made in respect of the
Performance Award.
PART III GENERAL PROVISIONS.
28. STOCK DIVIDEND OR STOCK SPLIT
If at any time the Company shall take any action whether by stock
dividend, stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares of Common Stock
then subject to deferred Stock Awards, credited to Retirement Unit Accounts
(matured or unmatured) or set aside for Performance or Other Awards, (ii) the
number of outstanding Options, the number of shares of Common Stock for which
such Options are exercisable and the exercise price thereof, (iii) the number
of shares of Common Stock reserved for Stock Awards, and (iv) the number of
shares of Common Stock reserved for Options, shall be increased or decreased
in the same proportion. The Committee shall make an appropriate equitable
adjustment to the provisions of Section 13(a) to take account of such increase
or decrease in issued and outstanding shares. The Committee in its discretion
may make appropriate equitable adjustments respecting deferred Stock Awards,
Retirement Units, Performance or Other Awards and outstanding Options to take
account of a dividend by the Company of property other than cash. All such
adjustments shall be made by the Committee whose determination shall be
conclusive and binding upon all Participants and any person claiming under or
through any Participant.
29. RECLASSIFICATION OR MERGER
If at any time the Company reclassifies or otherwise changes its issued
and outstanding Common Stock (other than in par value) or the Company and one
or more corporations merge and the Company is the surviving corporation of
such merger, then each Stock Award, Retirement Unit (matured or unmatured),
Performance Award or Other Award which at the time of such reclassification or
merger is credited as a Stock Award, Retirement Unit, Performance Award or
Other Award shall thereafter be deemed to be the equivalent of (and all Units
thereafter credited to a Retirement Unit Account shall be computed with
reference to), and outstanding Options shall be exercisable for, the shares of
stock or other securities of the Company which pursuant to the terms of such
reclassification or merger are issued with respect to each share of Common
Stock. The Committee shall also make an appropriate equitable adjustment to
the provisions of Section 13(a) to take account of such event. All such
adjustments shall be made by the Committee whose determination shall be
conclusive and binding upon all Participants and any person claiming under or
through any Participant.
30. NON-ALIENATION OF BENEFITS
Except as herein specifically provided, no right or unpaid benefit under
this Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or person entitled to the benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease. Notwithstanding the
foregoing, rights and benefits hereunder shall pass by will or the laws of
descent and distribution in the following order: (i) to beneficiaries so
designated by the Participant; if none, then (ii) to a legal representative of
the Participant; if none, then (iii) to the persons entitled thereto as
determined by a court of competent jurisdiction. Awards so passing shall be
made at such times and in such manner as if the Participant were living.
11
<PAGE>
31. WITHHOLDING OR DEDUCTION FOR TAXES
If at any time specified herein for the making of any payment or delivery
of any Common Stock to any Participant or beneficiary, any law or regulation
of any governmental authority having jurisdiction in the premises shall
require the Company to withhold, or to make any deduction for, any taxes or
take any other action in connection with the payment or delivery then to be
made, such payment or delivery shall be deferred until such withholding or
deduction shall have been provided for by the Participant or beneficiary, or
other appropriate action shall have been taken. Subject to the provisions of
Rule 16b-3 and the consent of the Committee for persons subject to Section 16
of the Exchange Act, the Participant or beneficiary may satisfy the obligation
for such withholding or deduction in whole or in part by electing to deliver
shares of Common Stock already owned or to have the Company retain from the
distribution shares of Common Stock, in each case having a Fair Market Value
equal to the amount to be withheld or deducted.
32. ADMINISTRATION EXPENSES
The entire expense of administering this Plan shall be borne by the
Company.
33. GENERAL CONDITIONS
(a) The Board in its discretion may from time to time amend, suspend or
terminate any or all of the provisions of this Plan, provided that no change
may be made which would prevent Incentive Stock Options granted under the Plan
from being Incentive Stock Options as described therein without the consent of
the optionees concerned, and further provided that the Board may not make any
amendment which (1) changes the class of persons eligible for Incentive Stock
Options, or (2) increases the total number of shares for which Options may be
granted under Section 6(b), or (3) materially affects the provisions of
Sections 13(a) or (b) of the Plan, or (4) increases the total number of shares
authorized under Section 13(f) for which Awards may be granted, without the
consent and approval of the holders of a majority of the outstanding shares of
Class A and Class B Common Stock of the Company entitled to vote thereon,
voting together as one class. The foregoing provisions shall not be construed
to prevent the Committee from exercising its discretion, or to limit such
discretion, to increase the total number of shares for which Options may be
granted under Section 6(b) or the total number of shares authorized under
Section 13(f) for which Awards may be granted, as expressly permitted by
Sections 28 and 29 hereof, or to adjust the provisions of Sections 13(a) and
(b) hereof as expressly permitted by Sections 13(b), 28 and 29 hereof, or
otherwise to exercise any discretion to the extent expressly authorized
hereunder.
(b) Nothing contained in the Plan shall prohibit the Company from
establishing incentive compensation arrangements in addition to this Plan and
the Cash Plan. Payments made under any such separate arrangements shall not be
included in or considered a part of the maximum dollar amount available for
Awards under the Plan and Cash Plan, or number of shares available for Awards
or Options under the Plan, and shall not be charged against the dollar or
share amounts available for Awards under the Plan and Cash Plan or Options
under the Plan. In the discretion of the Committee, employees shall be
eligible to participate in such other arrangements, as well as the Plan and
Cash Plan, in the same year.
(c) Nothing in this Plan shall be deemed to limit in any way the right of
the Company to terminate a Participant's employment with the Company at any
time.
(d) The Committee may promulgate rules and regulations relating to the
administration and interpretation of, and procedures under, the Plan. Any
decision or action taken by the Company, the Board or the Committee arising
out of or in connection with the construction, administration, interpretation
and effect of the Plan shall be conclusive and binding upon all Participants
and any person claiming under or through any Participant.
12
<PAGE>
(e) No member of the Board or of the Committee shall be liable for any
act or action, whether of commission or omission, taken by any other member or
by any officer, agent or employee, nor for anything done or omitted to be done
by such Director except in circumstances involving actual bad faith.
(f) Notwithstanding any other provision of this Plan, the Company shall
not be obligated to make any Award, issue any shares of Common Stock, or grant
any Option with respect thereto, unless it is advised by counsel of its
selection that it may do so without violation of the applicable Federal and
State laws pertaining to the issuance of securities, and may require any stock
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required to prevent
any such violation.
(g) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3, that any ambiguities or inconsistencies in construction of
the Plan be interpreted to give effect to such intention and that if any
provision of the Plan is found not to be in compliance with Rule 16b-3, such
provision shall be deemed null and void to the extent required to permit the
Plan to comply with Rule 16b-3. The Board may adopt rules and regulations
under, and amend, the Plan in furtherance of the intent of the foregoing.
34. TRANSITION
Upon the effectiveness of this Plan, as provided below, and the Cash
Plan, such plans shall replace the Company's present Executive Incentive
Compensation Plan ("EICP"), except that the EICP shall continue to govern
options and awards of restricted stock outstanding under the EICP. No further
awards will be made under the EICP, and all amounts accrued for awards under
the EICP and unawarded shall be carried forward and be available for Awards
under the Plan and awards under the Cash Plan. All unmatured and matured but
undistributed retirement units and all performance awards respecting current
performance cycles awarded under the EICP shall be deemed Retirement Units and
Performance Awards awarded hereunder and any payments or distributions in
respect thereof shall be made hereunder; provided, however, that the number of
shares of Common Stock available for Awards pursuant to Section 13(f) hereof
shall not be reduced by the number of such retirement units previously awarded
under the EICP and paid subsequently under the Plan.
35. EFFECTIVE DATES
The Plan shall become effective for periods beginning after January 1,
1991 if approved by the holders of a majority of the outstanding shares of
Class A and Class B Common Stock of the Company entitled to vote thereon at
the 1991 Annual Meeting of Stockholders, in person or by proxy, voting
together as a single class. No Options may be granted or Awards made under the
Plan after December 31, 2000, or such earlier expiration date as may be
designated by resolution of the Board.
13
AGREEMENT OF LEASE
between
THE CITY OF NEW YORK,
Landlord,
and
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION
Tenant.
Dated as of December 15, 1993
Premises
Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block
4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281,
p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block
4284, Lot 1, Block 4306, p/o Lot 1 and Lot 44, Block
4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot
36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o Lot
50, Block 4337, Lot 62 and p/o Lot 76, and Block 4339,
Lot 46, plus demapped portions of 25th Avenue, 28th
Avenue, 138th Street and 139th Street on the Tax Map
for the Borough of Queens, in the County of Queens,
City and State of New York, and assigned new tentative
tax block and lot numbers Block 4282, Lot 100 for
future identification.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS................................. 3
ARTICLE 2 DEMISE OF PREMISES AND TERM OF LEASE........ 31
Section 2.01. Demise of Premises; Term 31
Section 2.02. Pre-Possessory Date Access
and Use 31
ARTICLE 3 RENTAL...................................... 34
Section 3.01. Method and Place of Payment 34
Section 3.02. Base Rent 34
Section 3.03. [Intentionally Omitted] 36
Section 3.04. [Intentionally Omitted] 36
Section 3.05. Payments in Lieu of Taxes 36
Section 3.06. Offset for Funding Default 47
Section 3.07. [Intentionally Omitted] 47
Section 3.08. Exemption From Certain Taxes 47
Section 3.09. Impositions and College Point
Improvement Fund Payments 55
Section 3.10. Single Tax Lot 60
Section 3.11. Tax Benefits Applications 60
ARTICLE 4 OFFSETS AGAINST RENTAL...................... 62
Section 4.01. Offsets Against Rental 62
Section 4.02. Notice of Offset 63
Section 4.03. Inability to Take Full Amount
of Offset 64
ARTICLE 5 PROHIBITION AGAINST LANDLORD TRANSFERS
AND ENCUMBRANCES............................ 65
Section 5.01. Prohibited Encumbrances 65
Section 5.02. Prohibited Transfers 65
ARTICLE 6 LATE CHARGES................................ 67
ARTICLE 7 INSURANCE................................... 68
Section 7.01. Insurance Requirements 68
Section 7.02. Treatment of Proceeds 69
Section 7.03. General Requirements Applicable
to Policies 70
Section 7.04. Increases in Coverage 73
Section 7.05. No Representation as to Adequacy
of Coverage 73
Section 7.06. Blanket and/or Umbrella Policies 73
Section 7.07. Liability Insurance Requirements 74
<PAGE>
Section 7.08. Property and Other Insurance
Requirements 75
Section 7.09. Construction Insurance Requirements 76
Section 7.10. Deductibles 77
Section 7.11. No Separate Contractor Coverage
Required 77
ARTICLE 8 DAMAGE, DESTRUCTION AND RESTORATION......... 79
Section 8.01. Notice to Landlord 79
Section 8.02. Tenant's Option Upon a Substantial
Casualty Loss 79
Section 8.03. Lease Termination or Purchase 80
Section 8.04. Casualty Restoration Construction
Work 80
Section 8.05. Restoration Funds 81
Section 8.06. Effect of Casualty on This Lease 82
ARTICLE 9 CONDEMNATION................................ 83
Section 9.01. Substantial Condemnation 83
Section 9.02. Less Than A Substantial
Condemnation 85
Section 9.03. [Intentionally Omitted] 86
Section 9.04. Temporary Taking 86
Section 9.05. Governmental Action Not Resulting
in a Condemnation 88
Section 9.06. Collection of Awards 89
Section 9.07. Tenant's Approval of Settlements 89
Section 9.08. Negotiated Sale 89
Section 9.09. Reduction of Base Rent and
Land PILOT 89
Section 9.10. Reduction of Purchase Price 90
ARTICLE 10 TRANSFER AND SUBLETTING..................... 91
Section 10.01. Tenant's Right to Assign, Sublet,
Transfer, Etc. 91
Section 10.02. Subtenant Violation 101
Section 10.03. Tenant's Right to Sublease 101
ARTICLE 11 MORTGAGES................................... 102
Section 11.01. Effect of Mortgages 102
Section 11.02. Mortgagee's Rights Not Greater
than Tenant's 102
Section 11.03. Notice and Right to Cure Tenant's
Defaults 103
Section 11.04. Execution of New Lease 106
ii
<PAGE>
Section 11.05. Recognition by Landlord of Recognized
Mortgagee Most Senior in Lien 109
Section 11.06. Appearance at Condemnation
Proceedings 110
Section 11.07. Rights Limited to Recognized
Mortgagees 110
Section 11.08. Consent to Assignment of Tenant
Rights 110
Section 11.09. Prohibition Against Surrender 112
Section 11.10. No Merger 112
Section 11.11. No Subordination to Fee Mortgage 112
Section 11.12. No Modifications 112
Section 11.13. Estoppel Certificate 113
Section 11.14. Modification of Lease 113
Section 11.15. Chattel Mortgages 114
Section 11.16. Additional Notices to Mortgagees 115
Section 11.17. Provisions of Lease Continue in
Effect After Foreclosure 115
ARTICLE 12 CAR POUND................................... 116
Section 12.01. Removal of Car Pound 116
Section 12.02. Damages for Tenant's Failure to
Construct after Notice 117
Section 12.03. Damages for Landlord's Failure
to Remove Car Pound 119
Section 12.04. Tenant's Self-Help Remedy 123
Section 12.05. Tenant's Right to Terminate
the Lease 125
Section 12.06. Interim Car Pound 126
Section 12.07. Interim Car Pound License 127
ARTICLE 13 CONSTRUCTION WORK........................... 128
Section 13.01. Construction of the Project 128
Section 13.02. Subsequent Construction Work 139
Section 13.03. [Intentionally Omitted] 139
Section 13.04. Supervision of Architect 140
Section 13.05. Conditions Precedent to Tenant's
Commencement of All Construction
Work 140
Section 13.06. Completion of Construction Work 141
Section 13.07. Title to the Improvements
and Materials 142
Section 13.08. [Intentionally Omitted] 143
Section 13.09. Construction Agreements 143
Section 13.10. Consent for Demolition 145
ARTICLE 14 REPAIRS, MAINTENANCE, ETC................... 146
Section 14.01. Maintenance of the Premises, Etc. 146
Section 14.02. [Intentionally Omitted] 146
Section 14.03. Free of Dirt, Snow, Etc. 146
Section 14.04. No Obligation of Landlord
To Repair or to
Supply Utilities 146
iii
<PAGE>
ARTICLE 15 CAPITAL IMPROVEMENTS........................ 148
Section 15.01. Capital Improvements 148
ARTICLE 16 REQUIREMENTS OF GOVERNMENTAL AUTHORITIES.... 149
Section 16.01. Requirements 149
ARTICLE 17 DISCHARGE OF LIENS; BONDS................... 151
Section 17.01. Creation of Liens 151
Section 17.02. Discharge of Liens 151
ARTICLE 18 REPRESENTATIONS............................. 153
Section 18.01. Landlord's Representations
and Warranties 153
Section 18.02. Tenant's Acknowledgment of No
Other Representations 155
Section 18.03. No Payments 156
ARTICLE 19 LANDLORD NOT LIABLE FOR INJURY OR
DAMAGE, ETC................................. 157
Section 19.01. Landlord not Liable for Injury
or Damage, Etc. 157
Section 19.02. Waiver of Claims 158
ARTICLE 20 INDEMNIFICATION OF LANDLORD AND OTHERS...... 159
Section 20.01. Tenant's Obligation to Indemnify 159
Section 20.01A. Landlord's Obligation to Indemnify 160
Section 20.02. Contractual Liability 161
Section 20.03. Defense of Claim, Etc. 161
Section 20.04. Notice 163
Section 20.05. Survival Clause 163
ARTICLE 21 PURCHASE OPTION ............................ 164
Section 21.01. Purchase Option 164
Section 21.02. Default under Purchase Agreement;
Extension of Term 167
Section 21.03. Condemnation 171
Section 21.04. Right to Terminate 171
iv
<PAGE>
ARTICLE 22 LANDLORD'S RIGHT TO PERFORM TENANT'S
COVENANTS................................... 172
Section 22.01. Landlord's Right to Perform 172
Section 22.02. Reimbursement of Amounts Paid 172
Section 22.03. Waiver, Release and Assumption of
Obligations 172
ARTICLE 23 USE OF THE PREMISES......................... 174
Section 23.01. Permitted Uses 174
Section 23.02. Prohibited Uses 174
ARTICLE 24 EVENTS OF DEFAULT, CONDITIONAL
LIMITATIONS, REMEDIES, ETC.................. 175
Section 24.01. Definition 175
Section 24.02. Enforcement of Performance 177
Section 24.03. Expiration and
Termination of Lease 177
Section 24.04. Arbitration of Certain Defaults 180
Section 24.05. Receipt of Moneys after Notice
or Termination 181
Section 24.06. Exercise of Purchase Option 181
Section 24.07. Strict Performance 182
Section 24.08. Right to Enjoin Defaults 182
Section 24.09. Survival of Article 183
ARTICLE 25 NOTICES..................................... 184
Section 25.01. All Notices, Communications,
Etc. in Writing 184
Section 25.02. Service 185
ARTICLE 26 NO SUBORDINATION............................ 186
v
<PAGE>
ARTICLE 27 SANITARY SEWER.............................. 187
Section 27.01. Requirement of Sanitary Sewer 187
Section 27.02. Obligation to Construct Sanitary
Sewer 188
Section 27.03. Damages for Landlord's Failure
to Construct Sanitary Sewer 190
Section 27.04. Damages for Delaying Tenant's
Construction of the Sanitary
Sewer 191
Section 27.05. Sewer Self-Help Remedy 192
ARTICLE 28 ABANDONMENT OF THE PROJECT.................. 194
Section 28.01. Effect of Abandonment of the Project 194
Section 28.02. Loss of Certain Benefits 194
Section 28.03. Reimbursement of Funding 195
Section 28.04. Right to Terminate 196
ARTICLE 29 CERTIFICATES BY LANDLORD AND TENANT......... 198
Section 29.01. Certificate of Tenant 198
Section 29.02. Certificate of Landlord 198
ARTICLE 30 CONSENTS AND APPROVALS...................... 200
Section 30.01. Effect of Granting or Failure to
Grant Approvals or Consents 200
Section 30.02. Remedy for Refusal to Grant
Consent or Approval 200
Section 30.03. No Unreasonable Delay 201
Section 30.04. No Fees Etc. 201
ARTICLE 31 SURRENDER AT END OF TERM.................... 202
Section 31.01. Surrender of Premises 202
Section 31.02. Delivery of Subleases, Etc. 202
Section 31.03. Personal Property 203
Section 31.04. Survival Clause 204
ARTICLE 32 ENTIRE AGREEMENT............................ 205
ARTICLE 33 QUIET ENJOYMENT............................. 206
vi
<PAGE>
ARTICLE 34 ARBITRATION................................. 207
Section 34.01. Disputes to be Submitted to
Arbitration 207
Section 34.02. Procedure for Arbitration 207
Section 34.03. Selection of Arbiter 208
Section 34.04. Recognized Mortgagees 210
Section 34.05. Arbiter's Decision 210
Section 34.06. Lists of Arbiters 210
ARTICLE 35 ADMINISTRATIVE AND JUDICIAL
PROCEEDINGS, CONTESTS, ETC.................. 215
Section 35.01. Tax Contest Proceedings 215
Section 35.02. Imposition Contest Proceedings 216
Section 35.03. Requirement Contest 217
Section 35.04. Landlord's Participation
in Contest Proceedings 218
ARTICLE 36 SALES AND COMPENSATING USE TAXES............ 219
Section 36.01. Exemption 219
Section 36.02. Public Purpose Payments 219
ARTICLE 37 REPORTS, SUBMISSIONS AND RECORDS............ 221
Section 37.01. Financial Reports 221
Section 37.02. Submission of Certificates
of Occupancy 221
ARTICLE 38 RECORDING OF LEASE.......................... 222
ARTICLE 39 TENANT'S PROPERTY........................... 223
ARTICLE 40 NONDISCRIMINATION; AFFIRMATIVE ACTION....... 224
Section 40.01. Executive Order No. 50 224
Section 40.02. Limitations 225
Section 40.03. E.O. 50 Remedies 226
Section 40.04. Nondiscrimination; Affirmative
Action 227
Section 40.05. Nondiscrimination Remedies 228
ARTICLE 40A INVESTIGATIONS, ETC......................... 230
Section 40A.01. Cooperation in Investigations 230
Section 40A.02. Hearing 231
Section 40A.03. Adjournments of Hearing, Etc. 232
Section 40A.04. Penalties 232
Section 40A.05. Criteria for Determination 234
vii
<PAGE>
Section 40A.06. Payment of Penalties 235
Section 40A.07. Definitions 235
Section 40A.08. Exclusive Remedy 236
Section 40A.09. Right to Dispute Determinations
of Deputy Mayor 237
ARTICLE 41 EMPLOYMENT REPORTING AND
REQUIREMENTS................................ 238
Section 41.01. Employment Reporting
and Requirements 238
ARTICLE 42 APPOINTMENT OF LEASE ADMINISTRATOR.......... 240
Section 42.01. Appointment of Lease Administrator 240
Section 42.02. Revocation of Appointment 240
Section 42.03. Binding Nature of Lease
Administrator's Actions 240
Section 42.04. Obligation of Landlord to Perform
Certain Acts 241
ARTICLE 43 MISCELLANEOUS............................... 243
Section 43.01. Captions 243
Section 43.02. Table of Contents 243
Section 43.03. Reference to Landlord and Tenant 243
Section 43.04. Person Acting on Behalf of a Party
Hereunder 243
Section 43.05. Comptroller's Statutory
Right of Audit 244
Section 43.06. Limitation on Liability 244
Section 43.07. Remedies Cumulative 248
Section 43.08. Merger 248
Section 43.09. Performance at Party's Sole
Cost and Expense 249
Section 43.10. Relationship of Landlord and Tenant 249
Section 43.11. Waiver, Modification, Etc. 249
Section 43.12. [Intentionally Omitted] 249
Section 43.13. Governing Law 249
Section 43.14. Successors and Assigns 250
Section 43.15. Publicity 250
Section 43.16. [Intentionally Omitted] 250
Section 43.17. [Intentionally Omitted] 250
Section 43.18. Termination by Tenant 251
Section 43.19. Hazardous Substances, Etc. 251
ARTICLE 44 STORM DRAINAGE SYSTEM....................... 254
ARTICLE 45 BROKERS..................................... 255
ARTICLE 46 WHITESTONE ROAD............................. 256
viii
<PAGE>
EXHIBITS
PAGE
Exhibit A - Mayoral Authorization 2
Exhibit B - Land 17
Exhibit C - Maximum Improvement PILOT 18
Exhibit D - Maximum Land PILOT 19
Exhibit E - Sanitary Sewer Easement 31
Exhibit F - [Intentionally Omitted]
Exhibit G - Title Matters 31
Exhibit H - Form of Assumption Agreement 92
Exhibit I - Plan of Parcels A, B and C 31
Exhibit J - South Brooklyn Marine Terminal Site 124
Exhibit K - Agreement of Sale and Purchase 165
Exhibit L - [Intentionally Omitted]
Exhibit M-1 Reimbursement Schedule 195
Exhibit M-2 Amortized Reimbursement Schedule 195
Exhibit N - Employment Questionnaire 238
Exhibit O - Site Connection Proposal Form 254
Exhibit P - E.O. 50 Construction Contract Rider 224
ix
<PAGE>
AGREEMENT OF LEASE
AGREEMENT OF LEASE, made as of the 15th day of
December, 1993, between THE CITY OF NEW YORK, a municipal
corporation of the State of New York, having an address at City
Hall, New York, New York 10007, as landlord, and NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION, a local development
corporation formed under Section 1411 of the New York
Not-for-Profit Corporation Law, having an address at 110
William Street, New York, NY 10038, as tenant.
W I T N E S S E T H:
RECITALS
WHEREAS:
(1) The City of New York is the owner of the Land (as
hereinafter defined) and any buildings and other improvements
situated thereon or therein.
(2) The parties desire to provide a public benefit by
providing for the construction and operation on the Land of a
new facility for the printing, production and distribution of
newspapers to be constructed and operated by The New York Times
Newspaper Division of The New York Times Company or an
Affiliate (as hereinafter defined) of The New York Times
Newspaper Division of The New York Times Company.
<PAGE>
(3) The Mayor of the City of New York has authorized
the City of New York to enter into this Lease pursuant to
Mayoral Authorization Cal. No. 9, dated January 13, 1993, a
copy of which is annexed hereto as Exhibit A.
(4) It is anticipated that the number of permanent
jobs to be retained and/or created in connection with the
Project (as hereinafter defined) is approximately 410 - 710,
depending upon the size of the Project to be constructed by
Tenant (as hereinafter defined), based upon manning levels
currently in effect under conditions resulting from current
technology and collective bargaining agreements currently in
effect; provided, however, that The New York Times Newspaper
Division of The New York Times Company makes no representations
as to the number of jobs to be retained and/or created under
conditions resulting from future technological advances or
modifications to existing collective bargaining agreements or
new collective bargaining agreements that may become effective
during the Term (as hereinafter defined).
TERMS OF AGREEMENT
NOW, THEREFORE, it is hereby mutually covenanted and
agreed by and between the parties hereto that this Lease is
made upon and subject to the terms, covenants and conditions
hereinafter set forth.
-2-
<PAGE>
ARTICLE 1
DEFINITIONS
For all purposes of this Lease, the terms defined in
this Article shall have the following meanings:
"Abandonment of the Project" means any of the
following occurrences:
(a) Tenant shall have delivered to Landlord
written notice of its election to abandon the Project
as of the date specified in such notice, in which
event Abandonment of the Project shall be effective on
such date.
(b) at any time during the period between the
Lease Execution Date and the Operational Date, Tenant
shall have permanently relocated substantially all of
the jobs and/or functions directly related to the
printing, bundling, collating, production and
distribution of The New York Times newspaper located,
on the Lease Execution Date, at the 43rd Street
Facility to another facility outside of the City of
New York, in which event Abandonment of the Project
shall be effective on the effective date of such
permanent relocation of jobs and/or functions;
(c) at any time after the Construction
Commencement Date Tenant shall have failed to make
reasonable and diligent efforts to construct a
-3-
<PAGE>
facility constituting at least the Minimum Printing
Facility to completion, and as a result of such
failure Tenant shall not Substantially Complete
construction of a facility constituting at least the
Minimum Printing Facility by the Scheduled Completion
Date (subject to Unavoidable Delays), and such failure
to Substantially Complete construction of a facility
constituting at least the Minimum Printing Facility
shall continue for thirty (30) days after written
notice from Landlord, in which event Abandonment will
be effective on the day after the expiration of such
30-day period (provided that prior to the expiration
of such 30-day period, Tenant has not commenced to
cure such failure);
(d) on or before the Outside Operation Date,
Tenant shall have failed to equip the Minimum Printing
Facility with printing presses and such other
equipment as is necessary to enable the Minimum
Printing Facility to be operational for the printing,
collating, bundling and distribution of newspapers and
magazines or other periodicals or printed materials
and to commence the operation of the Minimum Printing
Facility, in which event Abandonment shall be
effective on the Outside Operation Date; or
-4-
<PAGE>
(e) at any time after the Operational Date,
Tenant shall have ceased operation of the Minimum
Printing Facility and failed to resume the operation
of the Minimum Printing Facility as a major printing
facility serving the New York City Metropolitan Area
within a five (5) year period and such failure shall
have continued for thirty (30) days after written
notice from Landlord, in which event Abandonment will
be effective on the day after expiration of such
30-day period (provided that prior to the expiration
of such 30-day period, Tenant has not commenced to
cure such failure).
Notwithstanding anything to the contrary contained herein,
Abandonment of the Project shall in no event be deemed to have
occurred if The New York Times Company or any successor thereto
shall have assigned its interest in this Lease in accordance
with the provisions hereof and the assignee of such interest in
this Lease shall either perform or continue to perform the
obligations of the Tenant set forth herein with respect to the
construction, equipping and operation of the Minimum Printing
Facility. Nothing contained herein shall be construed as
granting to any such assignee any extension of the time periods
set forth herein for the performance of such obligations.
"Accounting Principles" at any time means the then
current generally accepted accounting principles consistently
-5-
<PAGE>
applied which relate to the accrual method of accounting, but
subject to the exceptions, if any, expressly set forth in this
Lease.
"Acquisition Date" has the meaning provided in Section
21.02.
"Affiliate" means, with respect to any Person, any
other Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under
common control with, such Person. For purposes hereof, the term
"control" means the possession by a Person, directly or
indirectly, of the power to direct or cause the direction of
the management and policies of another Person through the
ownership of voting rights or interests, by contract, or
otherwise. Ownership of or by a Person includes beneficial
ownership effected by ownership or control of intermediate
entities. Unless the context otherwise requires, any reference
to an "Affiliate" in this Lease shall be deemed to refer to an
Affiliate of Tenant.
"Amortized EDC Reimbursement Amount" has the meaning
provided in Section 28.03(b).
"Amortized Reimbursement Schedule" has the meaning
provided in Section 28.03(b).
"Arbiter" has the meaning provided in Section 34.02(a).
"Architect" means any registered architect,
architectural firm, professional engineer or engineering firm,
-6-
<PAGE>
or a combined practice or association, licensed in the State of
New York selected by Tenant, or any licensed architect or
engineer on the staff of a general contractor selected by
Tenant responsible for the performance of all or any portion of
the general construction work relative to any Construction Work
who is authorized to sign construction documents, in his or her
professional capacity, on behalf of such general contractor.
"Base Rent" has the meaning provided in Section 3.02.
"Basic Penalty Offset" has the meaning provided in
Section 12.03(b).
"Basic Purchase Price" has the meaning provided in
Section 21.01(a).
"Buildings Department" means the New York City
Department of Buildings and its successors.
"Business Day" mean any day other than a Saturday,
Sunday, legal holiday, or a day on which banking institutions
in New York City are authorized by law or executive order to
close.
"Capital Improvement" has the meaning provided in
Section 15.01(c).
"Car Pound" means the Police Department Vehicle Pound
operated on the Land by the New York City Police Department as
the same may exist on the Lease Execution Date.
"Car Pound Completion Date" has the meaning provided
in Section 12.03(b).
-7-
<PAGE>
"Car Pound Offset Amounts" has the meaning provided in
Section 12.03.
"Car Pound Removal Date" has the meaning provided in
Section 12.01(a).
"Car Pound Removal Notice" has the meaning provided in
Section 12.01.
"Casualty Restoration" has the meaning provided in
Section 8.02(a).
"Certificate of Occupancy" means a certificate of
occupancy, either temporary or permanent, issued by the
Buildings Department.
"Certified Public Accountant" means an independent
certified public accountant or accounting firm selected by
Tenant.
"City" means The City of New York, a municipal
corporation of the State of New York.
"Collateral Assignment" has the meaning provided in
Section 10.01(b).
"College Point Improvement Fund" has the meaning
provided in Section 3.09(b)(ii).
"College Point Improvement Fund Payments" has the
meaning provided in Section 3.09(b)(iii).
"Commence Construction of the Project" or
"Commencement of Construction of the Project" has the meaning
provided in Section 13.01(b)(i).
-8-
<PAGE>
"Comptroller" has the meaning provided in Section
37.03(b).
"Condemnation" has the meaning provided in Section
9.01(c)(i)
"Condemnation Restoration" has the meaning provided in
Section 9.02(b).
"Construction Agreement(s)" has the meaning provided
in Section 13.09(b).
"Construction Commencement Date" has the meaning
provided in Section 13.01(b)(ii).
"Construction of the Project" has the meaning provided
in Section 13.01(b)(iii).
"Construction Work" means any construction work
performed under this Lease including, without limitation,
Construction of the Project, a repair, a Restoration, a Capital
Improvement, or work performed in connection with the use,
maintenance or operation of the Premises, or any demolition
work.
"Date of Condemnation" has the meaning provided in
Section 9.01(c)(ii).
"Default" means any condition or event, or failure of
any condition or event to occur, which constitutes, or would
after notice and/or the lapse of time constitute, an Event of
Default.
"Default Damages Period" has the meaning provided in
Section 21.02(b).
-9-
<PAGE>
"DEP Sewers" has the meaning provided in Section 43.17.
"Dispute Notice" has the meaning provided in Section
34.02(a).
"Division" means The New York Times Newspaper Division
of The New York Times Company.
"EDC" means New York City Economic Development
Corporation and its successors.
"EDC Reimbursement Amount" has the meaning provided in
Section 28.03(a).
"Engineer of Record" means the professional engineer,
if any, designated to act as engineer of record by (a) Tenant,
(b) any general contractor selected by Tenant responsible for
the performance of general construction work relative to the
construction of the Project, or (c) any construction manager
selected by Tenant responsible for the performance of
construction management services relative to the the
construction of the Project.
"Equipment" means all fixtures and personal property
incorporated in or attached to and used or usable in the
operation of or in connection with the Premises and shall
include, but shall not be limited to, all apparatus, devices,
motors, engines, dynamos, compressors, pumps, boilers and
burners, heating, lighting, plumbing, ventilating, air cooling
and air conditioning equipment; chutes, ducts, pipes, tanks,
fittings, conduits and wiring; incinerating equipment;
-10-
<PAGE>
elevators, escalators and hoists; partitions, doors, cabinets,
hardware; floor, wall and ceiling coverings; washroom, toilet
and lavatory equipment; lobby decorations; windows, window
washing hoists and equipment; communications equipment; and all
additions thereto or replacements thereof, excluding, however,
Tenant's Property and any personal property which is owned by
Subtenants or contractors engaged in maintaining same, or by
utility companies serving the Premises.
"Event of Default" has the meaning provided in Section
24.01.
"Exempt Taxes" has the meaning provided in Section
3.08.
"Expansion Construction Commencement Date" has the
meaning provided in Section 3.05(b)(ii).
"Expansion Improvement" has the meaning provided in
Section 3.05(b)(ii)(B)(2).
"Expiration Date" means, subject to postponement
pursuant to the provisions of Section 21.02 hereof, the
earliest to occur of (i) the twenty-fifth (25th) anniversary of
the Construction Commencement Date, (ii) the thirty-fifth
(35th) anniversary of the Lease Execution Date, or (iii) the
date, if any, upon which this Lease is terminated pursuant to
any provision of this Lease.
"Failure to Exercise Notice" has the meaning provided
in Section 21.01(c).
-11-
<PAGE>
"15th Year Normal Improvements PILOT" has the meaning
provided in Section 3.05(b)(ii)(C).
"Finance Department" means the New York City
Department of Finance and its successors.
"First Year Abatement Period" has the meaning provided
in Section 21.02(b).
"Fiscal Year" has the meaning provided in Section
3.05(d)(iv).
"Fixed Improvements Value" has the meaning provided in
Section 3.02(b)(ii)(A).
"Fixed Land PILOT" has the meaning provided in Section
3.05(b)(i)(B)(1)(y)(I).
"Floor Area" has the meaning provided for such term in
the City's Zoning Resolution effective on the Lease Execution
Date.
"4th Anniversary Date" has the meaning provided in
Section 3.02(a).
"43rd Street Facility" meants Tenant's 43rd Street
facility as it exists on the Lease Execution Date.
"Full Assessment Date" has the meaning provided in
Section 3.05(b)(ii)(A).
"Fund" means the College Point Improvement Fund.
"Funding" has the meaning provided in Funding
Agreement #1, Funding Agreement #2, Funding Agreement #3 or
Funding Agreement #4, as applicable.
-12-
<PAGE>
"Funding Agreement #1", "Funding Agreement #2",
"Funding Agreement #3" and "Funding Agreement #4" mean,
respectively, the four funding agreements so denominated
between EDC and The New York Times Company, dated as of the
Lease Execution Date, as the same may be amended from time to
time.
"Governmental Authority or Authorities" means the
United States of America, the State of New York, New York City
and any agency, department, commission, board, bureau,
instrumentality or political subdivision of any of the
foregoing, now existing or hereafter created, having legal
jurisdiction over the Premises or any portion thereof or any
street, road, avenue or sidewalk comprising a part of,
adjoining, or in front of, the Premises, or any vault in or
under the Premises.
"Gross Building Area" means, at any time, the gross
building area of the Improvements completed as of such time as
determined by the Finance Department or, if Tenant does not
agree with such determination, Tenant shall give notice to
Lease Administrator of such disagreement, and in such event,
the Gross Building Area shall be determined by arbitration in
accordance with Article 34. Lease Administrator shall promptly
notify Tenant of the Finance Department's determination of
Gross Building Area and Lease Administrator shall have the
right to include in such notice a provision indicating that
such determination of Gross Building Area shall be binding upon
-13-
<PAGE>
Landlord and Tenant for purposes of this Lease unless Tenant
notifies Lease Administrator of its disagreement with such
determination within ninety (90) days after Tenant's receipt of
such notice from Lease Administrator. In the event that any
such determination of Gross Building Area becomes binding upon
Landlord and Tenant for purposes of this Lease, such
determination shall remain binding unless and until there is a
recalculation of Gross Building Area by the Finance Department
as the result of an expansion of or addition to the
Improvements. The binding nature of any such determination of
Gross Building Area shall be for purposes only of performing
calculations under Section 3.05(b)(ii) hereof, and shall not
prejudice, limit or affect in any manner Tenant's rights under
Section 35.01(a) hereof or be admissible in any action or
proceeding referred to in said Section 35.01(a).
"Hazardous Substances" has the meaning provided in the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 USCA SEC.9601 et. seq.
"Hazardous Substances Extension Period" has the
meaning provided in Section 43.19(d).
"Imposition" or "Impositions" has the meaning provided
in Section 3.09(b)(i).
"Improvements" means any building (including footings
and foundations), Equipment, and other improvements and
appurtenances of every kind and description hereafter erected,
-14-
<PAGE>
constructed, or placed upon the Land including, without
limitation, the Initial Improvements, any Expansion
Improvements, any Capital Improvements and any and all
alterations and additions thereto and replacements and
substitutions therefor, excluding, however, Tenant's Property
and any personal property which is owned by Subtenants or
contractors engaged in maintaining same, or by utility
companies serving the Premises.
"Improvements PILOT" has the meaning provided in
Section 3.05(b)(ii).
"Improvements Taxes" has the meaning provided in
Section 3.05(d)(iii).
"Initial Improvements" means any building or buildings
(including footings and foundations), at least 360,000 square
feet in Gross Building Area (or such lesser amount of square
feet as may qualify for reimbursement under Funding Agreement
#1), first placed on the Land in accordance with the Plans and
Specifications.
"Initial Improvements PILOT Period" has the meaning
provided in Section 3.05(b)(ii).
"Initial Land PILOT Period" has the meaning provided
in Section 3.05(b)(i)(A).
"Initial Land PILOT Period Termination Date" has the
meaning provided in Section 3.05(b)(i)(A).
"Initial Three Month Period" has the meaning provided
in Section 12.03(a).
-15-
<PAGE>
"Institutional Lender" means (a) a state or federally
chartered savings bank, savings and loan association,
commercial bank, trust company (whether acting individually or
in a fiduciary capacity), financial institution, other entity
involved in the business of making loans or providing
financing, trust fund whose trustee is a bank or trust company,
or any similar institution, or any of the foregoing organized
under the laws of any foreign jurisdiction; an insurance
company organized and existing under the laws of the United
States or any state thereof or the laws of any foreign
jurisdiction; a religious, educational or eleemosynary
institution or any organization described in Section 501(c)(3)
of the Internal Revenue Code; a federal, state or municipal
employee's welfare, benefit, pension or retirement fund; a
brokerage, investment advisor or investment banking
organization (acting as principal or agent); any governmental
agency or entity insured by a governmental agency; any trust,
partnership, or other entity organized by any of the foregoing
for the purpose of acquiring receivables, or other assets from
or providing financing to Tenant as part of a securitized
financing; or any combination of Institutional Lenders;
provided, that each of the above entities shall qualify as an
Institutional Lender only if it shall (A) be subject (or agree
to be subject) to the jurisdiction of the courts of the State
of New York in any action with respect to its rights hereunder
-16-
<PAGE>
as a Recognized Mortgagee, and (B) have net assets of not less
than $50,000,000; provided, however, that with respect to any
institution acting in a trust capacity or as agent or which has
organized an entity for purposes of financing a Mortgage, such
net asset requirement shall apply to such institution rather
than to the entity for which such institution is acting in
trust for, as agent for, or has organized for the purpose of a
financing transaction, and
(b) any Affiliate of an Institutional Lender described
in clause (a).
"Land" means the land described in Exhibit B hereto.
"Land PILOT" has the meaning provided in Section
3.05(b)(i)
"Land Taxes" has the meaning provided in Section
3.05(d)(ii).
"Landlord" means the City acting in its capacity as
such (rather than in its municipal capacity), provided,
however, that if the City or any successor to its interest
hereunder transfers or assigns its interest in the Land or its
interest under this Lease (which assignee must be a municipal
entity), then from and after the date of such assignment or
transfer, the term "Landlord" shall mean the assignee or
transferee.
"Landlord Indemnitees" has the meaning provided in
Section 20.01.
-17-
<PAGE>
"Landlord's Liability Amount" has the meaning provided
in Section 43.06(a).
"Landlord's Sewer Commencement Date" has the meaning
provided in Section 27.02.
"Landlord's Unavoidable Delays" has the meaning
provided in Section 12.01.
"Late Charge Rate" means one percent (1%) over the
Prime Rate.
"Lease" means this Agreement of Lease and all exhibits
hereto and all amendments, modifications and supplements
thereof.
"Lease Administrator" means EDC, or an affiliate
entity controlled by EDC, acting in its capacity as
administrator of this Lease pursuant to the terms of Article 42
hereof.
"Lease Execution Date" means the date on which this
Lease has been fully executed by both parties hereto and
unconditionally delivered by each such party to the other.
"Lease Year" means each full calendar year falling
within the Term and the partial calendar year, if any, that
begins on the Possessory Date.
"Major Sublease" has the meaning provided in Section
10.01(b)(i)(B).
"Maximum Improvements PILOT" means, for any period,
the amount of Improvements PILOT for such period shown in
Exhibit C, after deducting the applicable abatement amounts
shown on said Exhibit C.
-18-
<PAGE>
"Maximum Land PILOT" means, for any period, the amount
of Land PILOT for such period shown in Exhibit D, after
deducting the applicable abatement amounts shown on said
Exhibit D.
"Minimum Printing Facility" means a facility for the
printing, production and distribution of newspapers, magazines
and/or other periodicals of not less than approximately 360,000
square feet of floor area, which facility and its foundation
shall be adequate to accommodate the installation and operation
therein of four printing presses and other equipment related
primarily to printing, collating, bundling and distribution
functions necessary in connection with the production of
newspapers and magazines or other periodicals or printed
materials.
"Mortgage" has the meaning provided in Section
11.01(b).
"Mortgagee" means the holder of a Mortgage.
"Normal Expansion Improvements PILOT" has the meaning
provided in Section 3.05(b)(ii)(B).
"Normal Improvements PILOT" has the meaning provided
in Section 3.05(b)(ii)(B).
"Notice Period" has the meaning provided in Section
34.02(b).
"Offset Amounts" has the meaning provided in Section
4.01.
-19-
<PAGE>
"Offset Dispute Notice" has the meaning provided in
Section 4.02.
"Offset Notice" has the meaning provided in Section
4.02.
"Offset Liability Portion" has the meaning provided in
Section 43.06(a).
"Operational Date" means the date on which Tenant
commences the operation of the Minimum Printing Facility.
"Outside Commencement Date" has the meaning provided
in Section 13.01(b)(iv).
"Outside Operation Date" means the date which is
five (5) years after Substantial Completion of construction of
the Minimum Printing Facility.
"Parcel A," "Parcel B," and "Parcel C" have the
meanings provided in Section 2.02.
"Permitted Encumbrances" has the meaning provided in
Section 5.1 of the Purchase Agreement.
"Permitted Testing" has the meaning provided in
Section 2.02.
"Person" means an individual, corporation,
partnership, joint venture, estate, trust, unincorporated
association; any federal, state, county or municipal government
or any bureau, department or agency thereof; and any fiduciary
acting in such capacity on behalf of any of the foregoing.
"PILOT" has the meaning provided in Section 3.05(a).
"PILOT Refund Amount" has the meaning provided in
Section 35.02.
-20-
<PAGE>
"Plans and Specifications" has the meaning provided in
Section 13.01(b)(v).
"Plans and Specifications Offset Amount" has the
meaning provided in Section 13.01(h).
"Possessory Date" means, subject to the applicable
provisions of Article 12 hereof, the date on which possession
of the Premises is delivered to Tenant free of the Car Pound
and all vehicles and structures and other improvements, free of
any claims to possession by any party and free of Hazardous
Substances to the extent required by Section 43.19(a) hereof,
and substantially free of any debris, but subject nevertheless
to any obligations that may be imposed upon Landlord pursuant
to the provisions of Section 43.19(c) hereof.
"Power Agreement" means that certain New York City
Public Utility Service Power Service Agreement made as of May
3, 1993 between The City of New York, acting by and through its
Public Utility Service, and the Division.
"Preliminary Site Work" has the meaning provided in
Section 13.01(b)(i).
"Premises" means the Land and the Improvements.
"Prime Rate" means the base or prime rate of interest
charged from time to time by Chemical Bank, as published in The
New York Times newspaper or by The Wall Street Journal if such
rate is not then being published by The New York Times
newspaper.
-21-
<PAGE>
"Printing Facility" means a facility for the printing,
production and distribution of newspapers and magazines or
other periodicals or printed materials.
"Prohibited Encumbrances" has the meaning provided in
Section 5.01.
"Prohibited Person" has the meaning provided in
Section 10.01(c).
"Project" means a Printing Facility of not less than
approximately 360,000 square feet and, in the sole discretion
of Tenant, such other buildings and Improvements as Tenant may
deem necessary in connection with such Printing Facility
including, without limitation, the expansion of the Printing
Facility to a size greater that 360,000 square feet.
"Property" has the meaning provided in Section
21.01(a).
"Public Purpose Payment" has the meaning provided in
Section 36.02.
"Public Sewer Delay" has the meaning provided in
Section 27.04.
"Purchase Agreement" has the meaning provided in
Section 21.01(d).
"Purchase Default Date" has the meaning provided in
Section 21.02(b).
"Purchase Notice" has the meaning provided in Section
21.01(b).
-22-
<PAGE>
"Purchase Option" means the purchase option described
in Article 21.
"Purchase Price" has the meaning provided in Section
21.01(a).
"Recognized Mortgage" has the meaning provided in
Section 11.02(b).
"Recognized Mortgagee" means the holder of a
Recognized Mortgage.
"Reimbursement Schedule" has the meaning provided in
Section 28.03(a).
"Rejection Notice" has the meaning provided in Section
34.02(b).
"Remaining Abatement Period" has the meaning provided
in Section 21.02(b).
"Remaining Improvements PILOT Period" has the meaning
provided in Section 3.05(b)(ii)(B).
"Remaining Land PILOT Period" has the meaning provided
in Section 3.05(b)(i)(B).
"Remaining Liability Portion" has the meaning provided
in Section 43.06(a).
"Rental" means Base Rent, Impositions, PILOT, College
Point Improvement Fund Payments, any amounts payable pursuant
to Article 20 or Section 36.02 and any other sums, costs or
expenses which Tenant is obligated, pursuant to any of the
provisions of this Lease, to pay.
"Requirements" has the meaning provided in Section
16.01.
-23-
<PAGE>
"Restoration" means either a Casualty Restoration or a
Condemnation Restoration, or both.
"Reviewable Features" has the meaning provided in
Section 13.01.
"Sales Tax Offset Limit" has the meaning provided in
Section 3.08.1(f).
"Sanitary Sewer" has the meaning provided in Section
27.01.
"Sanitary Sewer Default Date" has the meaning provided
in Section 27.03.
"Sanitary Sewer Easement" means the permanent
easement, approximately 30 feet wide, running along the portion
of the Premises fronting on the Whitestone Expressway Service
Road, more fully described in Exhibit E.
"Sanitary Sewer Offset Period" has the meaning
provided in Section 27.03.
"Sanitary Sewer Work" has the meaning provided in
Section 27.02.
"Scheduled Completion Date" has the meaning provided
in Section 13.01(b).
"Scheduled Sanitary Sewer Completion Date" has the
meaning provided in Section 27.02.
"Self-Help Notice" has the meaning provided in Section
12.04(a).
"Sewer Delay Offset Amount" has the meaning provided
in Section 27.04.
-24-
<PAGE>
"Sewer Delay Period" has the meaning provided in
Section 27.04.
"Sewer Drawings" has the meaning provided in Section
27.01.
"Sewer Offset Amount" has the meaning provided in
Section 27.03.
"Sewer Plans" has the meaning provided in Section
27.01.
"Sublease" means any sublease (including a
sub-sublease or any further level of subletting), occupancy,
license, franchise or concession agreement applicable to the
Premises or any part thereof.
"Subsequent Construction Work" means Construction Work
other than construction of the Initial Improvements.
"Substantial Completion Date" means the date on which
the Construction of the Initial Improvements shall have been
Substantially Completed, as certified by the Architect or
Engineer of Record in accordance with Section 13.01(b)(viii)
hereof.
"Substantial Completion" or "Substantially
Complete(d)" has the meaning provided in Section 13.01(b)(viii).
"Substantially All of the Premises" means (a) with
respect to a taking, such portion of the Premises as, when
taken, would leave a balance of the Premises that, due either
to the area so taken or the location of the part so taken in
relation to the part not so taken, would not, under zoning laws
and building regulations then existing, permit the Premises to
-25-
<PAGE>
be used as a Printing Facility to the same extent that the
Premises were used at the time of the taking including, without
limitation, adequate parking and other ancillary uses such as a
garage and (b) with respect to a casualty, such portion of the
Premises as, when damaged, would leave a balance of the
Premises that would not permit the Premises, in Tenant's
reasonable opinion, to be used as a Printing Facility in the
same manner and to the same extent that the Premises were used
at the time of the casualty including, without limitation,
adequate parking and other ancillary uses such as a garage.
With respect to any taking that would not be deemed a taking of
Substantially All of the Premises pursuant to clause (a) of the
immediately preceding sentence, at Tenant's sole election, to
be exercised by written notice to Landlord within one hundred
eighty (180) days after a taking, Substantially All of the
Premises shall be deemed to have been taken if the the portion
of the Premises, when taken, would leave a balance of the
Premises that, due either to the area so taken or the location
of the part so taken to the part not so taken, would not, under
zoning laws and building regulations then existing, permit the
Improvements existing at the time of the taking to be expanded
to a Printing Facility consisting of not less than 720,000
square feet of Gross Building Area and all facilities ancillary
thereto including, without limitation, adequate parking and a
garage.
"Subtenant" means any subtenant, operator, licensee,
franchisee, concessionaire or other occupant of the Premises or
any portion thereof under a Sublease.
-26-
<PAGE>
"Survey" means the survey of the Land performed by
Robert A. Haynes, dated August 28, 1990, incorporated herein by
reference.
"Tax Benefits" has the meaning provided in Section
3.05(d)(i).
"Taxes" has the meaning provided in Section 3.05(d)(i).
"Tax Year" has the meaning provided in Section
3.05(d)(v).
"Temporary Car Pound Relocation Site" has the meaning
provided in Section 12.04(a).
"Tenant" means the tenant under this Lease and, as of
the Lease Execution Date, the Tenant is EDC; provided, however,
that from and after the date of the contemplated assignment of
this Lease to The New York Times Company, the term "Tenant"
shall mean The New York Times Company and any successor to The
New York Times Company; and provided, further, that, from and
after such time as The New York Times Company or any successor
transfers or assigns this Lease, in accordance with this Lease,
the term "Tenant" shall mean the assignee or transferee. For
so long as the "Tenant" is The New York Times Company or any
successor thereto, the non-monetary obligations and covenants
set forth in this Lease as being the obligations or covenants
of "Tenant" shall apply only to and be performed by the
Division and the employees assigned to such Division, and
Landlord shall look solely to such Division for the performance
-27-
<PAGE>
of such non-monetary obligations and covenants; provided,
however, that any default by such Division in the performance
of such non-monetary obligations or covenants shall be treated
with the same force and effect pursuant to the applicable
provisions of this Lease as if such default had been committed
by "Tenant."
"Tenant Indemnitees" has the meaning provided in
Section 20.01A.
"Tenant Readiness Date" has the meaning provided in
Section 27.02.
"Tenant's Property" means all moveable partitions,
business and trade fixtures, business machinery and equipment,
communications and office equipment, tools, supplies, and spare
parts, whether or not attached to or built into the Premises,
which are installed in the Premises by Tenant or any Subtenant,
and all furniture, furnishings, and other moveable articles of
personal property owned by Tenant or any Subtenant.
Notwithstanding anything to the contrary set forth herein,
Tenant's Property shall include, without limitation, printing
presses and all other machinery and equipment used in the
process of printing, bundling, collating and distributing
newspapers, magazines and other printed materials.
"Term" has the meaning provided in Article 2.
"Title Matters" has the meaning provided in Article 2.
"Transfer" has the meaning provided in Section
10.01(b).
-28-
<PAGE>
"Transferee" has the meaning provided in Section
10.01(b).
"Unavoidable Delays" means delays caused by strikes,
slowdowns, walkouts, lockouts or other labor troubles; acts of
God; catastrophic weather conditions; inability to obtain labor
or materials due to labor disputes; court orders enjoining
commencement or continuation of Construction Work; enemy
action; civil commotion; shortage of fuel, supplies or labor
resulting from governmental declared priorities in connection
with a public emergency; failure or defect in the supply of
electricity, oil, gas or water to the Premises provided that
such failure or defect is not due to the action or inaction of
Tenant or any of its contractors or their subcontractors; fire,
casualty; the failure of the Lease Administrator to review,
comment on, approve, disapprove and/or inform the Buildings
Department of its approval of the Plans and Specifications
within the specified time periods, provided that such failure
is not a result of Tenant's failure to submit Plans and
Specifications in sufficient detail to permit Lease
Administrator to properly review such Plans and Specifications
or Tenant's failure to submit Plans and Specifications
appropriately modified to reflect Lease Administrator's
comments thereon, provided that such comments were submitted to
Tenant in writing in sufficient detail to make such
modifications; the failure of EDC to disburse any Funding under
-29-
<PAGE>
Funding Agreement #1; and/or any other cause or causes not
within Tenant's control that are causing a delay in Tenant's
performance of its construction obligations hereunder. Tenant
shall make good faith efforts to notify the Lease Administrator
in writing, stating when such delay commenced, not later than
ten (10) Business Days after Tenant received knowledge of the
occurrence of any of the foregoing conditions; provided,
however, that Tenant's failure to so notify the Lease
Administrator as aforesaid shall not affect the commencement of
any Unavoidable Delay or otherwise result in any adverse
consequences to Tenant under this Lease; and provided, further,
that Tenant's financial condition or inability to obtain
financing shall not constitute an Unavoidable Delay.
"Urban Renewal Plan" means the Second Amended Urban
Renewal Plan for the College Point II Industrial Development
Project, dated February 1989, with (a) all amendments and
modifications thereto from time to time up to and including the
Lease Execution Date (but not subsequent to the Lease Execution
Date, except as set forth in clause (b) of this sentence) and
(b) any amendments or modifications thereto after the Lease
Execution Date with respect only to landscaping, compliance
with which would not require Tenant to incur a material cost.
-30-
<PAGE>
ARTICLE 2
DEMISE OF PREMISES AND TERM OF LEASE
Section 2.01. Demise of Premises; Term. Landlord does
hereby demise and lease to Tenant, and Tenant does hereby hire
and take from Landlord, the Premises, together with the
Improvements to be constructed thereon and all easements,
appurtenances and interests and other rights and privileges now
or hereafter belonging or appertaining to the Premises, subject
to the terms and conditions of this Lease, and subject also to
(a) the reservation of the Sanitary Sewer Easement as set forth
in Exhibit E and (b) those matters affecting title set forth in
Exhibit G (the "Title Matters"), for a term (the "Term")
commencing on the Possessory Date and expiring on the
Expiration Date, as such Term may be extended pursuant to the
provisions of Section 21.02 hereof.
Section 2.02. Pre-Possessory Date Access and Use.
Notwithstanding anything to the contrary contained
herein, Tenant, from and after the date hereof, shall have a
right of access to the entire Premises, subject to the terms
and conditions hereinafter set forth in this Section 2.02, for
the performance of Preliminary Site Work including, without
limitation, the driving of test pilings, and such Construction
Work in connection with the Construction of the Project that
Tenant may be able to perform in light of the restrictions
contained in this Section 2.02. Attached hereto as Exhibit I
-31-
<PAGE>
and made a part hereof is a plan of the Land divided into
three (3) parcels denominated as Parcel A, Parcel B, and Parcel
C. As of the date hereof, the Car Pound occupies Parcel C
only. Tenant's access to and use of Parcel A, Parcel B, and
Parcel C shall be restricted as follows during the following
time periods:
(a) During the period commencing on the date
hereof and ending on the Possessory Date, Tenant shall have the
right to consruct a fence around Parcel A with such opening or
openings to a street or streets that Tenant may deem necessary
in order to obtain access to and use Parcel A for the purposes
permitted by this Section 2.02, and Tenant shall have access
to, and the sole and exclusive use of Parcel A, for the
performance of Preliminary Site Work and Construction Work in
connection with the Construction of the Project;
(b) During the period commencing on the date
hereof and expiring on the Possessory Date, Tenant shall not
have access to Parcel C, except to the extent that such access
may be granted by the New York City Police Department to
perform test soil borings and surveys ("Permitted Testing") or
such other Preliminary Site work that the New York City Police
Department may permit; and
(c) During the period commencing on (x) the date
hereof, and expiring on (y) the Possessory Date, Tenant shall
have access to Parcel B for the purposes of: (l) erecting one
-32-
<PAGE>
or more temporary structures and maintaining vehicles or other
equipment thereon, (2) carving out an opening in the existing
fence (fronting on Linden Boulevard) so as to provide vehicular
access to Parcel B, (3) filling and/or paving Parcel B and (4)
erecting such fence or fences, if any, that Tenant may deem
appropriate to secure its structures and equipment.
Tenant's access to and use of portions of the Premises
prior to the Possessory Date shall be upon all of the terms and
conditions of this Lease, except for such terms which by their
nature are inapplicable to periods prior to the Possessory Date
(e.g., the obligation to pay Rental).
-33-
<PAGE>
ARTICLE 3
RENTAL
Section 3.01. Method and Place of Payment. Except as
otherwise specifically provided herein, all Rental shall be
paid without setoff or deduction and without prior notice or
demand. All Rental payable to Landlord (except PILOT, which is
payable in accordance with Section 3.05, Public Purpose
Payments, if any, which are payable pursuant to Section 36.02,
and Impositions, if the rules and regulations of the City
governing such payment are to the contrary) shall be paid by
good checks payable to the order of Landlord and drawn on a
bank which is either (i) a bank in the top one hundred (100)
banks in the United States in total assets, (ii) a U.S. money
center bank or (iii) a bank that is a member of the New York
Clearing House Association (or any successor body of similar
function), mailed or delivered to Landlord c/o New York City
Economic Development Corporation, 110 William Street, New York,
New York, 10038, Attention: Lease Administration, or at such
other place as Landlord shall direct by notice to Tenant.
Impositions shall be payable in the form and to the location
provided by rules and regulations governing the payment of such
as if Tenant owned the Premises.
Section 3.02. Base Rent. Tenant shall pay Landlord
base rent ("Base Rent") during the Term as follows:
-34-
<PAGE>
(a) if the Construction Commencement Date occurs
on or prior to the fourth (4th) anniversary of the Lease
Execution Date (the "4th Anniversary Date"):
(i) for the period commencing with the
Possessory Date and continuing until the third (3rd)
anniversary of the Construction Commencement Date,
Base Rent will be at an annual rate of $1.00 (Landlord
hereby acknowledges receipt of $7.00 as advance
payment on account of such Base Rent); and
(ii) from the day after the third (3rd)
anniversary of the Construction Commencement Date, and
for each Lease Year thereafter during the Term, Base
Rent shall be at the annual rate of five hundred
fifty-two thousand dollars ($552,000).
(b) if the Construction Commencement Date shall
not have occurred on or prior to the 4th Anniversary Date, Base
Rent for the period commencing with the Possessory Date and
ending on the Expiration Date shall be at the annual rate of
five hundred fifty-two thousand dollars ($552,000).
(c) Payment of Base Rent.
(i) Period. Base Rent shall be paid in
monthly installments, the first monthly installment payable in
advance on the Possessory Date for the calendar month or
portion thereof in which it falls due and on the first day of
each calendar month thereafter.
-35-
<PAGE>
(ii) Prorations of Base Rent. Base Rent
which is due for any period of less than a full calendar month
shall be appropriately apportioned on a 365- or 366-day basis.
Section 3.03. [Intentionally Omitted]
Section 3.04. [Intentionally Omitted]
Section 3.05. Payments in Lieu of Taxes.
(a) Tenant's Obligation to Pay PILOT. For each
Tax Year or portion thereof within the Term, Tenant shall pay
as Rental (and not as a tax) to Landlord, c/o City Collector,
Department of Finance, Bureau of Central Real Estate, 25 Elm
Place, Brooklyn, New York 11201 (or such other address of which
the Landlord shall give Tenant notice), in accordance with
notice of the amount due and payable, an annual sum (each such
sum being hereinafter referred to as a "PILOT") in the
aggregate amounts and in the manner determined as provided in
Section 3.05(b)
(b) Amount of PILOT. PILOT shall be payable in
the following amounts:
(i) Land PILOT. Tenant shall make payments
in lieu of real estate taxes on the Land (the "Land PILOT") for
each Fiscal Year or portion thereof included within any period
(apportioned, on a 365- or 366-day basis, as appropriate, for
any part of a Fiscal Year) during the Term, payable in arrears
in equal semi-annual installments within ten (10) days after
the receipt of a notice from Lease Administrator, as follows:
-36-
<PAGE>
(A) for the period (the "Initial Land PILOT
Period") commencing with the Possessory Date and
continuing until the date (the "Initial Land PILOT
Period Termination Date") which shall be the earlier of
(1) the Substantial Completion Date or
(2) (x) if the Possessory Date occurs on or
prior to the 4th Anniversary Date, the sixth
(6th) anniversary of the Lease Execution Date or
(y) if the Possessory Date occurs after
the 4th Anniversary Date, the second (2nd)
anniversary of the Possessory Date,
Land PILOT for each Fiscal Year within such
period will be in an amount equal to
(I) the lesser of (x) $299,480 ("Fixed
Land PILOT") or (y) Land Taxes for the Fiscal Year
less
(II) $100,000;
(B) for the period (the "Remaining Land
PILOT Period") commencing with the day after the
Initial Land PILOT Period Termination Date and
continuing until the end of the Term, Land PILOT for
each Fiscal Year within such period will be in an
amount equal to
-37-
<PAGE>
(I) the lesser of
(aa) Land Taxes for the Fiscal Year, or
(bb) Fixed Land PILOT, increased as of
the beginning of the first full Fiscal Year
of the Remaining Land PILOT Period, and as
of the beginning of every Fiscal Year
thereafter, by four percent (4%) of the
amount paid as Land PILOT with respect to
the prior Fiscal Year or portion thereof,
less
(II)(aa) (if the Initial Land PILOT
Period Termination Date shall have occurred
on or prior to the Substantial Completion
Date), $100,000 per annum for the period
commencing on the day after the Initial Land
PILOT Period Termination Date and ending on
the Substantial Completion Date, and (bb)
$200,000 per annum for the period commencing
on the day after the Substantial Completion
Date and ending on the date that is the 20th
anniversary of the Possessory Date.
(C) In no event will Tenant be obligated to
pay more under the foregoing provisions of this
Section 3.05(b)(i) than Maximum Land PILOT.
-38-
<PAGE>
(ii) Improvements PILOT. Tenant shall make
payments in lieu of real estate taxes on the Improvements (the
"Improvements PILOT") for each Tax Year (appropriately
apportioned on a 365- or 366-day basis for any period of less
than a full Tax Year) during the Term, payable in arrears in
equal semi-annual installments within ten (10) days after the
receipt of a notice from Lease Administrator, as follows
(subject to abatement as provided in clause (C) below):
(A) for the period (the "Initial
Improvements PILOT Period") commencing with the
Construction Commencement Date and continuing until
the date (the "Full Assessment Date") on which the
Initial Improvements have been fully assessed by the
Finance Department for taxing purposes, the
Improvements PILOT for each Tax Year included within
such period will be an amount equal to $110.00 (the
"Fixed Improvements Value") multiplied by (1) the
actual total square footage of Gross Building Area
completed as of the time of the assessment for each
Tax Year; (2) forty-five percent (45%); and (3) the
fixed tax rate of 10.698%;
(B) for the period (the "Remaining
Improvements PILOT Period") commencing with the day
after the Full Assessment Date and continuing until
-39-
<PAGE>
the end of the Term, the Improvements PILOT for each
Tax Year within such period will be in an amount equal
to the following:
(1) with respect to Improvements
(exclusive of Expansion Improvements) completed
on or prior to the Full Assessment Date, the
lesser of
(a) Improvements Taxes for such Tax
Year (exclusive of Improvement Taxes
attributable to Expansion Improvements), or
(b) an amount equal to the Fixed
Improvements Value decreasing, at the rate
of one percent (1%) per annum (with the
first one percent (1%) decrease to take
effect on the first anniversary of the Full
Assessment Date), multiplied by (x) the
actual total square footage of Gross
Building Area of such Improvements, (y)
forty-five percent (45%), and (z) the fixed
tax rate of 10.698%;
(2) with respect to any Improvements
completed after the Full Assessment Date that add
square footage of Gross Building Area, including
without limitation, expansions or modifications
to existing Improvements (each such Improvement
-40-
<PAGE>
hereinafter individually referred to as an
"Expansion Improvement"), the lesser of
(a) Improvements Taxes for such Tax
Year attributable to such Expansion
Improvement, or
(b) an amount equal to the Fixed
Improvements Value increasing at the rate of
three percent (3%) of the Fixed Improvements
Value per annum from the Full Assessment
Date until the date on which the Expansion
Improvement being assessed was substantially
completed, and decreasing thereafter at the
rate of one percent (1%) of the Fixed
Improvements Value (as increased by such
three percent (3%) per annum increases) per
annum (with the first such one percent (1%)
decrease to take effect on the first
anniverary of the substantial completion of
the Expansion Improvement), multiplied by
(x) the actual total square footage of Gross
Building Area of the Expansion Improvement
constructed that adds square footage of
Gross Building Area, (y) forty-five percent
(45%), and (z) the fixed tax rate of 10.698%;
-41-
<PAGE>
(3) with respect to any Improvements
completed after the Full Assessment Date that do
not add square footage of Gross Building Area, an
amount equal to zero.
The amount of Improvements PILOT (exclusive of
Improvements PILOT attributable to Expansion
Improvements) for any Tax Year, computed pursuant to
the foregoing paragraphs of this Section
3.05(b)(ii)(B) as of the beginning of such Tax Year,
is hereinafter referred to as the "Normal Improvements
PILOT" for such Tax Year. The amount of Improvements
PILOT attributable to an Expansion Improvement for any
Tax Year, computed pursuant to the foregoing
paragraphs of this Section 3.05(b)(ii)(B) as of the
beginning of such Tax Year, is hereinafter referred to
as the "Normal Expansion Improvements PILOT" for such
Tax Year.
(C) Abatement of Improvements PILOT.
(i) The Improvements PILOT computed in accordance with
Section 3.05(b) with respect to Improvements completed
on or prior to the Full Assessment Date shall be
subject to the following abatements from and after the
Construction Commencement Date: for the first fifteen
(15) Tax Years after the Construction Commencement
Date, Tenant shall be exempt from Improvements PILOT
-42-
<PAGE>
in an amount equal to one hundred percent (100%) of
Normal Improvements PILOT for each such Tax Year or
portion thereof; for the following nine (9) Tax Years
thereafter (i.e., from Tax Year 16 through and
including Tax Year 24), Tenant shall be exempt from
Improvements PILOT in an amount equal to the following
percentages of Normal Improvements PILOT determined in
Tax Year 15 ("15th Year Normal Improvements PILOT"):
90% thereof in Tax Year 16, decreasing by 10% of 15th
Year Normal Improvements PILOT each Tax Year
thereafter; and for Tax Year 25, Tenant shall be
exempt from Improvements PILOT in an amount equal to
10% of 15th Year Normal Improvements PILOT. The
computation of the abatements described above are
illustrated as follows:
Tax Years Exemption
1 - 15 100% of the Normal Improvements PILOT for
such Tax Year
16 90% of 15th Year Normal Improvements PILOT
17 80% of 15th Year Normal Improvements PILOT
18 70% of 15th Year Normal Improvements PILOT
19 60% of 15th Year Normal Improvements PILOT
20 50% of 15th Year Normal Improvements PILOT
21 40% of 15th Year Normal Improvements PILOT
-43-
<PAGE>
22 30% of 15th Year Normal Improvements PILOT
23 20% of 15th Year Normal Improvements PILOT
24 10% of 15th Year Normal Improvements PILOT
25 10% of 15th Year Normal Improvements PILOT
(ii) The Improvements PILOT computed in
accordance with Section 3.05(b) with respect to an Expansion
Improvement shall be subject to the following abatements (which
abatements shall be available after the expiration or earlier
termination of this Lease only if Tenant shall have applied for
and qualified for same pursuant to the provisions of Section
3.11 hereof or otherwise) from and after the date on which
Tenant commences construction of such Expansion Improvement
(the "Expansion Construction Commencement Date"): for the
first fifteen (15) Tax Years after the Expansion Construction
Commencement Date, Tenant shall be exempt from Improvements
PILOT in an amount equal to one hundred percent (100%) of
Normal Expansion Improvements PILOT for each such Tax Year or
portion thereof; for the following nine (9) Tax Years
thereafter (i.e., from the sixteenth (16th) through and
including the twenty-fourth (24th) Tax Year after the Expansion
Construction Commencement Date), Tenant shall be exempt from
Improvements PILOT in an amount equal to the following
percentages of Normal Expansion Improvements PILOT determined
in the fifteenth (15th) Tax Year following the Expansion
-44-
<PAGE>
Construction Commencement Date ("15th Year Expansion Normal
Improvements PILOT"): 90% thereof in the 16th Tax Year
following the Expansion Construction Commencement Date,
decreasing by 10% of 15th Year Normal Expansion Improvements
PILOT each Tax Year thereafter; and for the 25th Tax Year after
the Expansion Construction Commencement Date, Tenant shall be
exempt from Improvements PILOT in an amount equal to 10% of
15th Year Normal Expansion Improvements PILOT.
(D) In no event will Tenant be obligated to
pay more under the foregoing provisions of this
Section 3.05(b)(ii) than Maximum Improvements PILOT.
(c) Effect of Abandonment of Project. Notwithstanding
the foregoing provisions of this Section 3.05, from and after
Abandonment of the Project, PILOT shall be equal to Taxes.
(d) Definitions.
(i) "Taxes" means the real property taxes
determined with respect to the assessed value of the Premises
pursuant to the provisions of the New York State Real Property
Tax Law, Chapter 58 of the Charter of the City of New York and
Title 11, Chapters 2, 3 and 4 of the Administrative Code of the
City of New York, as the same may now exist or hereafter be
amended, or any successor provision, statute or ordinance
(whether or not the Premises are actually exempt by law from
such real property taxation, assessment, levy or payment for
the Tax Year in question), subject to the provisions of Section
-45-
<PAGE>
35.01. Notwithstanding anything to the contrary contained
herein, for the sole purpose of computing the amounts of PILOT
payable pursuant to the terms of this Lease (e.g., if PILOT
shall be equal to Taxes due to an Abandonment of the Project or
if Taxes are lower than the amounts of PILOT that would
otherwise be payable pursuant to the terms of this Lease),
Taxes shall be computed taking into account any and all tax
benefits, exemptions, abatements, deferments or reductions that
Tenant would be entitled to if Tenant were the owner, rather
than the lessee, of the Property including, without limitation,
the benefits of the Industrial and Commercial Incentive Program
(together, the "Tax Benefits"), with the same force and effect
as if Tenant had timely filed any necessary applications or
taken any necessary administrative steps to obtain such Tax
Benefits, without regard to whether Tenant actually did so.
(ii) "Land Taxes" means the portion of Taxes
attributable to the Land.
(iii) "Improvements Taxes" means the portion
of Taxes attributable to the Improvements.
(iv) "Fiscal Year" means any 12 month period
falling within the term of the Lease, commencing on July 1 of
any calendar year and ending on June 30 of the following
calendar year.
(v) "Tax Year" means a full City Fiscal
Year except that the period of time from the Construction
-46-
<PAGE>
Commencement Date to the first day of the first full City
Fiscal Year occurring thereafter shall be deemed to be a Tax
Year if it is longer than six (6) months and, if it is shorter
than six (6) months, such period shall be deemed to be part of
such next occurring Tax Year.
Section 3.06. Offset for Funding Default. Pursuant
to Section 4.01(a) hereof, if EDC shall be in default in its
obligations to disburse to Tenant any Funding in accordance
with the terms and conditions of Funding Agreement #1, Funding
Agreement #2, Funding Agreement #3 or Funding Agreement #4, and
such default shall not have been cured by EDC within thirty
(30) days after notice from Tenant, Tenant may (unless and
until there has been an Abandonment of the Project) offset the
amount of such defaulted Funding against future installments of
Rental (excluding Impositions, but including College Point
Improvement Fund Payments) until such time as the aggregate
amount of such offsets equals the aggregate amount of defaulted
Funding.
Section 3.07. [Intentionally Omitted].
Section 3.08. Exemption From Certain Taxes.
Section 3.08.1. Exempt Taxes. Subject to the
provisions of Article 28 hereof, Landlord warrants and
represents that Tenant shall not be required to pay, and
Landlord hereby agrees to indemnify, defend and hold Tenant
harmless from and against, any and all of the following taxes,
assessments, levies, fees, charges, payments or amounts with
respect to the Premises or the operation thereof (other than
-47-
<PAGE>
PILOT, College Point Improvement Fund Payments and payments to
a BID pursuant to the provisions of Section 3.09(c) hereof),
whether or not any taxing authority has determined that Tenant
is legally or administratively entitled to an exemption from
any such amounts (the "Exempt Taxes"):
(a) Taxes;
(b) any new or additional real estate tax or
franchise, income, transit, profit, "gains", "value added" or
other tax or governmental imposition imposed by reason of the
ownership or occupancy of the Property, however designated,
that may be imposed or levied as a substitution in whole or in
part for, or in lieu of, or in addition to, any tax which would
constitute Taxes, excluding, however, any such new or
additional tax imposed or levied by New York State (and not by
the City) for the benefit of New York State (and not for the
City) from which the City lacks the legal authority to exempt
the Property;
(c) (i) assessments and special assessments imposed
by reason of the ownership or occupancy of the Property,
excluding, however, any such assessments or special assessments
imposed or levied by New York State (and not by the City) for
the benefit of New York State (and not for the City) from which
the City lacks the legal authority to exempt the Property, and
(ii) amounts that constitute Exempt Taxes
pursuant to the provisions of Section 3.09(c)(iii) hereof;
-48-
<PAGE>
(d) for so long as there has been no Abandonment of
the Project, the New York City Commercial Rent or Occupancy Tax
or any similar or successor tax, or any tax (including, without
limitation, any tax on personal property) levied at any time by
the City as a substitution in whole or in part for, or in lieu
of, or in addition to, such a tax;
(e) with respect to materials, fixtures and Equipment
purchased and incorporated into the Improvements, New York City
sales and compensating use taxes, or any tax imposed at any
time by the City as a substitution in whole or in part for, or
in lieu of, or in addition to, such taxes;
(f) with respect to machinery and equipment
(including, without limitation, printing presses) utilized in
connection with the production of newspapers and magazines or
other periodicals or printed materials (but not the
installation, maintenance and repair of such machinery and
equipment), New York City sales and compensating use taxes;
provided, however, that if in the future the City imposes a
sales and compensating use tax on such machinery or equipment,
such taxes shall nevertheless remain Exempt Taxes, but only (i)
if such taxes are imposed in connection with the initial
equipping of the Minimum Printing Facility, the Five Press
Facility, the Six Press Facility, the Seven Press Facility
and/or the Eight Press Facility (as such terms are defined in
Funding Agreement #1), respectively, and (ii) up to the Sales
-49-
<PAGE>
Tax Offset Limit. For purposes only of this Section 3.08.1(f),
the "Sales Tax Offset Limit" shall mean an amount of such taxes
equal to: (i) with respect to machinery and equipment utilized
in the Minimum Printing Facility, an amount equal to
$7,437,500.00, (ii) with respect to machinery and equipment
utilized in that portion of the Five Press Facility which is in
addition to the Minimum Printing Facility, an amount equal to
$1,859,375.00, (iii) with respect to machinery and equipment
utilized in that portion of the Six Press Facility which is in
addition to the Five Press Facility, an amount equal to
$1,965,625.00, (iv) with respect to machinery and equipment
utilized in that portion of the Seven Press Facility which is
in addition to the Six Press Facility, an amount equal to
$1,753,125.00, and (v) with respect to machinery and equipment
utilized in that portion of the Eight Press Facility which is
in addition to the Seven Press Facility, an amount equal to
$1,859,375.00;
(g) to the extent imposed in connection with (x) the
execution, structure and/or performance of this Lease, (y) the
assignment of this Lease from EDC to The New York Times Company
or (z) the transfer of the Property to Tenant pursuant to its
Purchase Option set forth in Article 21 hereof:
(1) the New York City Real Property Transfer Tax;
(2) the New York State Real Estate Transfer Tax;
(3) the New York State Real Property Transfer
Gains Tax;
-50-
<PAGE>
(4) the New York State or City Mortgage
Recording Tax; or
(5) any tax or imposition levied at any time by
any Governmental Authority as a substitution
in whole or in part for,
or in lieu of, or in addition to,
the taxes described in subsections (1)
through (4) of this Section 3.08.1(g); and
(h) any interest, penalties, or additions to the tax
imposed with respect or relating to any of the taxes or charges
enumerated in the foregoing Sections 3.08.1(a) through
3.08.1(g), any other amounts imposed on, assessed against or
incurred by Tenant with respect or relating to, or based upon,
any of such taxes or charges, and any amounts, charges,
liabilities or expenses incurred by Tenant in contesting the
imposition or assessment of any of such taxes, charges or other
amounts.
Section 3.08.2. Procedures.
(a) Landlord, at no cost to Tenant, shall cooperate
with Tenant's efforts to establish Tenant's entitlement to
exemption from Exempt Taxes imposed or administered by any
Governmental Authority (including, without limitation, the
City), and with Tenant's instituting, defending and prosecuting
any applications, audits, contests, or administrative or
judicial proceedings necessary to establish Tenant's
-51-
<PAGE>
entitlement to such exemption. Notwithstanding anything to the
contrary contained herein, Tenant shall notify Landlord in
writing if Tenant does not intend to institute or prosecute any
claim of exemption, contest or appeal or initiate or prosecute
any administrative or judicial proceedings to establish such
exemption because Tenant believes in good faith, for reasons
such as a change in law or taxing policy or otherwise, that
such exemption will not be upheld notwithstanding that the
taxes in question fall within the meaning of Exempt Taxes, in
which event Tenant shall have no obligation to institute or
prosecute any such claim of exemption, contest, appeal or
administrative or judicial proceeding unless Landlord directs
Tenant in writing to do so (and states the grounds on which the
exemption may be claimed) within thirty (30) days after its
receipt of Tenant's written notice, it being understood and
agreed that (i) any costs incurred in connection therewith by
Tenant shall constitute Exempt Taxes pursuant to Section
3.08.1(h) hereof and (ii) in either event, if any such Exempt
Taxes are paid by Tenant, then Tenant shall have the right of
offset set forth in Section 4.01(e) hereof and/or its right
pursuant to Section 4.03 hereof, as the case may be.
(b) With respect to the Exempt Taxes described in
Section 3.08.1(g) hereof, Landlord and Tenant shall comply with
all procedural and return filing requirements applicable in
connection with the execution, commencement and performance of
this Lease, the assignment of this Lease from EDC to The New
-52-
<PAGE>
York Times Company or the transfer of the Property to Tenant
pursuant to its Purchase Option set forth in Article 21
hereof.
(c) If any Exempt Taxes are asserted by any
Governmental Authority (including the City) to be payable by
Tenant, Tenant shall pay the same as and when due and payable,
subject to Tenant's right pursuant to Section 4.01(e) hereof to
an offset against Rental (other than Impositions or College
Point Improvement Fund Payments) in an amount equal to such
Exempt Taxes with interest thereon at the Prime Rate from the
date paid through the date of offset against Rental and/or its
right pursuant to Section 4.03 hereof, as the case may be.
Notwithstanding anything to the contrary contained herein, with
respect to the transfer of the Property to Tenant pursuant to
its Purchase Option set forth in Article 21 hereof, Landlord
shall pay the taxes described in Section 3.08.1(g) hereof, as
applicable, to the appropriate taxing authority on the date of
execution and delivery by Landlord to Tenant of the deed to the
Property, except as otherwise provided in Section 7.1.1 of the
Purchase Agreement, unless prior thereto Tenant has been
furnished by Landlord with a written determination of the
appropriate taxing authority that such tax is not payable or
that Tenant is exempt from such tax with respect to the
transaction involved.
(d) The provisions of Section 3.08.3 below shall
supercede the provisions of Sections 3.08.2(a) and (c) hereof
with respect to Exempt Taxes imposed or asserted subsequent to
-53-
<PAGE>
the expiration or termination of this Lease or subsequent to
the transfer of the Property to Tenant pursuant to its Purchase
Option set forth in Article 21 hereof.
Section 3.08.3. Exempt Taxes Imposed After Lease
Expiration or Termination. In the event that at any time after
the expiration or termination of this Lease, or subsequent to
the transfer of the Property to Tenant pursuant to its Purchase
Option set forth in Article 21 hereof (including as a result of
a post-transfer audit), any Exempt Taxes shall be imposed upon
or asserted to be payable by Tenant (including The New York
Times Company and/or any successor or successors-in-interest to
the rights of Tenant under this Lease) with respect to (i) the
Premises for any period of time prior to such expiration or
termination, (ii) the execution or performance of this Lease,
(iii) the assignment of this Lease from EDC to The New York
Times Company, or (iv) in connection with the transfer of the
Property to Tenant pursuant to such Purchase Option, then
Tenant shall inform Landlord thereof in writing prior to the
date by which Tenant might be subject to any penalty,
collection proceeding or other adverse consequence for failure
to pay such Exempt Taxes and, if requested by Landlord in
writing, shall refrain from paying such Exempt Taxes for so
long as Tenant may do so without penalty or adverse
consequences (including, without limitation, collection
proceedings) during which period Landlord shall attempt to
reverse the imposition of such Exempt Taxes, and if Landlord
fails to do so before Tenant is required to pay such Exempt
Taxes, Landlord shall pay to Tenant (and/or such successor or
-54-
<PAGE>
successors-in-interest, as the case may be) the amount of such
Exempt Taxes within ninety (90) days after Landlord's receipt
of a notice from Tenant (including The New York Times Company
and/or any successor or successors-in-interest to the rights of
Tenant under this Lease) accompanied by proof of payment of
such Exempt Taxes.
Section 3.08.4. Survival. This Section 3.08 shall
survive the assignment of this Lease from EDC to The New York
Times Company, any further assignment of this Lease by Tenant
pursuant to the terms hereof, the expiration or termination of
this Lease, and any transfer of the Property to Tenant pursuant
to such Purchase Option.
Section 3.09. Impositions and College Point
Improvement Fund Payments.
(a) Obligation to Pay. Tenant shall pay Impositions
and College Point Improvement Fund Payments.
(b) Definitions.
(i) "Imposition" or "Impositions" means water
meter rates and charges and any other governmental
charges (other than Taxes and Exempt Taxes) which at
any time during the Term are charged with respect to
the Premises which, if not paid, would (but for the
City's ownership of the Premises) be or become a lien
or other encumbrance on the Premises or any part
thereof.
-55-
<PAGE>
(ii) "College Point Improvement Fund" or
"Fund" means a separate fund consisting of sums paid
to EDC by Tenant and other owners and occupants of
similarly burdened property in the College Point
Industrial Park, to be used by EDC solely for the
construction, maintenance and improvement of (1)
roads, sewers, drainage systems, buffer strips,
utilities and sidewalks within College Point
Industrial Park, and (2) other facilities of general
benefit to College Point Industrial Park or portions
thereof as determined by EDC in its discretion.
(iii) "College Point Improvement Fund
Payments" means payments due on the first days of
January, April, July and October, commencing on the
first of such days to occur after the fourth (4th)
anniversary of the Possessory Date in an amount equal
to one-eighth of one percent (0.125%) of the assessed
value of the Land and Improvements, as such assessed
value is determined by the Finance Department for
Taxes, without regard to whether the City is Landlord;
provided, however, that for purposes hereof, in no
event shall (a) the assessed value of the Land be
deemed to exceed $2,799,401 (increased by four percent
(4%) per annum beginning with the first full Fiscal
Year of the Remaining Land PILOT Period) or (b) the
-56-
<PAGE>
assessed value of the Improvements be deemed to exceed
the assessed value used for each respective Tax Year
to compute the Maximum Improvements PILOT.
(c) Provisions Applicable to College Point Improvement
Fund Payments.
(i) All College Point Improvement Fund
Payments shall be made by Tenant to EDC.
(ii) Tenant's obligation to make College
Point Improvement Fund Payments during the Term shall
be enforceable by EDC, or its successor or assign or
designee. If there shall be established within
College Point Industrial Park, or any portion thereof,
a Business Improvement District ("BID") pursuant to
Article 2-B of the General City Law or any successor
statute thereto, then, if the Premises are included
within such BID and charges or assessments with regard
to the BID must be or are paid in connection with the
Premises in an amount in the aggregate less than,
equal to or greater than the amount that would be
payable by Tenant to EDC or its successor or assign or
designee for the Fund in connection with the Premises,
then (x) Tenant shall, subject to the provisions of
Section 3.09(c)(iii) below, pay such charges or
assessments and (y) Tenant shall be relieved and
discharged from any obligation to make any further
-57-
<PAGE>
College Point Improvement Fund Payments with respect
to any period from and after the date to which
Tenant's first payment to such BID is applicable, and
EDC shall promptly refund to Tenant any portion of any
College Point Improvement Fund Payments made by Tenant
which were applicable to any period beyond such date.
If the funds received by the BID in connection with
the Premises and other properties in such BID (the
"Burdened Properties"), in EDC's or its successor's or
assign's or designee's reasonable determination, are
devoted to similar purposes as those to which the Fund
is devoted, then the district management association
formed in connection with such BID shall succeed to
EDC's or its successor or assign's or designee's
functions in connection with the Fund with regard to
the area in such BID, and EDC or its successor or
assign or designee shall transfer moneys within the
Fund on hand and attributable to the properties
included within such BID to such district management
association.
(iii) Landlord hereby assigns to Tenant,
effective as of the date hereof, all of its authority
and right, as landowner, to attend hearings and
meetings and to vote in connection with the formation
of any BID affecting the Property and participate in
-58-
<PAGE>
the decision-making of such BID, and Landlord shall
execute and deliver any documents required by such BID
or otherwise to evidence such assignment. In the
event that either (x) Landlord shall fail to take such
steps as may be required of it to transfer to Tenant
all of Landlord's authority and right to vote and
participate in connection with a BID to the full
extent set forth in the immediately preceding sentence
or (y) a BID is formed without Tenant's participation
as a result of Landlord's failure to take the steps
required by subclause (x) above before the formation
of any such BID or Landlord's failure to forward to
Tenant any notice in connection therewith forwarded to
Landlord rather than to Tenant, and Tenant is required
to make payments thereto in excess of the amounts that
would be payable by Tenant to the Fund, then all
amounts payable with respect to such BID with respect
to the Property shall constitute Exempt Taxes.
(d) Apportionment. Any Imposition or College Point
Improvement Fund Payment payable with respect to a period part
of which is included within the Term and a part of which
precedes the Possessory Date or follows the Expiration Date,
shall be appropriately apportioned on the basis of a 365- or
366-day year.
-59-
<PAGE>
Section 3.10. Single Tax Lot. Promptly following the
execution of this Lease, Landlord and Tenant, at no cost to
Tenant, shall cause the Premises to be identified by a single
Block and Lot Number on the Tax Map of the Borough of Queens,
County of Queens, City and State of New York. The Premises
have been tentatively assigned new tentative block and lot
numbers Block 4282, Lot 100 for future identification.
Section 3.11. Tax Benefits Applications. Landlord and
Tenant acknowledge that it may be necessary for Tenant to file
for Tax Benefits during the Term to preserve Tenant's
entitlement to such Tax Benefits after the expiration or early
termination of this Lease. In furtherance thereof, Landlord
will cooperate in any manner reasonably requested by Tenant
(including, without limitation, the execution and delivery of
applications and other documents) to enable Tenant to qualify
for or obtain and thereafter keep in full force and effect the
maximum Tax Benefits available to Tenant at any time during the
Term. During the Term, Landlord shall comply in a timely
manner with any rules and regulations that may be necessary to
preserve the maximum Tax Benefits for the benefit of Tenant, as
the same shall apply to Landlord. Nothing contained herein
shall be construed as imposing any obligation on Tenant to file
for any Tax Benefits and, during the Term, for purposes of
computing PILOT payable under this Lease, Tenant shall be
deemed to have filed for and obtained and maintained the
-60-
<PAGE>
maximum Tax Benefits available to it, as more particularly set
forth in Section 3.05(d)(i) hereof. The provisions of this
Section 3.11 are intended to apply to the City only in its
capacity as Landlord and not in its municipal capacity.
-61-
<PAGE>
ARTICLE 4
OFFSETS AGAINST RENTAL
Section 4.01. Offsets Against Rental. Subject to the
provisions of this Article 4, Tenant shall have the right to
offset against installments of Rental (exclusive of Impositions
or College Point Improvement Fund Payments; provided, however,
that Tenant shall have a right of offset against College Point
Improvement Fund Payments with respect to the amount set forth
in Section 4.01(a) below) coming due under this Lease, any and
all of the following amounts (the "Offset Amounts"):
(a) an amount equal to that portion of the
Funding, if any, which EDC fails to pay to Tenant in accordance
with the provisions of Funding Agreement #1, Funding
Agreement #2 , Funding Agreement #3 and/or Funding Agreement #4;
(b) an amount equal to any amounts other than
the Funding owed to Tenant by EDC pursuant to the provisions of
Funding Agreement #1, Funding Agreement #2, Funding Agreement
#3 or Funding Agreement #4, but not paid;
(c) an amount equal to the Car Pound Offset
Amount, computed in accordance with the provisions of Article
12 hereof;
(d) an amount equal to the Sewer Offset Amount
or the Sewer Delay Offset Amount, computed in accordance with
the provisions of Article 27 hereof;
-62-
<PAGE>
(e) an amount equal to any Exempt Taxes paid by
Tenant, with interest thereon at the Prime Rate from the date
paid through the date of offset against Rental;
(f) an amount equal to the Plans and
Specifications Offset Amount, computed in accordance with the
provisions of Section 13.01(c) hereof;
(g) an amount equal to the PILOT Refund Amount,
with interest, computed in accordance with the provisions of
Section 35.01(c) hereof;
(h) [Intentionally Omitted]
(i) [Intentionally Omitted]
(j) [Intentionally Omitted]
(k) an amount equal to any amount owed to Tenant
by Landlord pursuant to the provisions of this Lease;
(l) an amount equal to the amount of any
judgment obtained by Tenant against the City, EDC or Landlord
in connection with this Lease or Funding Agreement #1, Funding
Agreement #2, Funding Agreement #3 or Funding Agreement #4;
(m) an amount equal to the Offset Portion; and
(n) an amount equal to any other amount
permitted to be offset against Rental pursuant to any provision
of this Lease.
Section 4.02. Notice of Offset. Tenant shall give
Landlord at least thirty (30) days' prior written notice (an
"Offset Notice") of its intention to offset any Offset Amounts
against Rental.
-63-
<PAGE>
Section 4.03. Inability to Take Full Amount of Offset.
In the event that Tenant exercises its option to purchase the
Property pursuant to Article 21 hereof, the Purchase Price
shall be reduced by any amounts that Tenant is entitled to
offset against Rental pursuant to the provisions of this Lease,
which amounts have not been so offset as of the date on which
transfer of title to the Property to Tenant is accomplished,
and if such amounts shall reduce the Purchase Price below zero,
the amount by which such amounts exceed the Purchase Price
shall be due and payable by Landlord to Tenant within
forty-five (45) days after the transfer of title to Tenant. In
the event that this Lease is terminated for any reason other
than the exercise by Tenant of its option to purchase the
Property prior to the date on which Tenant has offset against
Rental the full amount that it is entitled to so offset,
Landlord shall immediately pay to Tenant that portion of the
amount that Tenant was unable to offset against Rental prior to
such Lease termination. Notwithstanding anything to the
contrary contained herein, the termination of this Lease shall
not be delayed by the pendency of any dispute regarding the
amounts that Tenant is entitled to offset against Rental.
-64-
<PAGE>
ARTICLE 5
PROHIBITION AGAINST LANDLORD TRANSFERS AND ENCUMBRANCES
Section 5.01. Prohibited Encumbrances. Landlord shall
not place or permit to be placed on or with respect to the
Premises any liens, charges, easements, agreements of record,
encumbrances or other objections to title ("Prohibited
Encumbrances") other than Permitted Encumbrances (as such term
is defined in the Purchase Agreement). In the event that any
Prohibited Encumbrances shall be placed on or with respect to
the Premises, Landlord, at Landlord's sole cost and expense,
shall promptly take all such actions as may be necessary
(including, without limitation, the commencement of and the
diligent prosecution of legal proceedings and the payment of
money) to remove such Prohibited Encumbrances. Landlord shall
also pay to Tenant any damages (other than consequential
damages suffered by Tenant) or costs and expenses that Tenant
may suffer or incur by reason of Landlord's breach of and/or
default under the provisions of this Article 5.
Section 5.02. Prohibited Transfers. Landlord shall
not (i) transfer its interest in this Lease and/or the Premises
to any entity that is not a municipal entity, (ii) transfer its
interest in this Lease to a municipal entity without
simultaneously transferring its interest in the Premises to
such municipal entity, (iii) transfer its interest in the
Premises to a municipal entity without simultaneously
-65-
<PAGE>
transferring its interest in this Lease to such municipal
entity, (iv) transfer its interest in this Lease and/or the
Premises to any municipal entity if the effect of such transfer
would be to diminish or adversely affect in any manner
whatsoever Tenant's rights under this Lease, Funding
Agreement #1, Funding Agreement #2, Funding Agreement #3,
Funding Agreement #4, the Power Agreement or any program,
statute, rule or policy, including, without limitation, the
Energy Cost Savings Program, or (v) transfer its interest in
this Lease to any municipal entity without submitting to Tenant
at least ten (10) Business Days prior to the effective date of
such transfer (A) an agreement signed by such municipal entity,
in form and substance reasonably satisfactory to Tenant,
pursuant to which such municipal entity agrees to assume all of
the obligations of Landlord under this Lease and (B) proof
reasonably satisfactory to Tenant that such municipal entity
has the requisite power and authority and has obtained all
necessary authorizations, approvals, consents, resolutions or
other documents of any nature whatsoever to enable it to fully
perform all of the obligations of Landlord under this Lease
including, without limitation, Landlord's obligations pursuant
to Article 21 hereof.
-66-
<PAGE>
ARTICLE 6
LATE CHARGES
If any payment of Rental is not received by Landlord
within ten (10) days after notice of an overdue payment has
been sent to Tenant, a late charge on the sums so overdue,
calculated at the Late Charge Rate from the date such Rental
first becomes due to the date on which actual payment of the
sums is received by Landlord, shall become due and payable to
Landlord as liquidated damages for interest lost and the
administrative costs and expenses incurred by Landlord by
reason of Tenant's failure to make prompt payment. Tenant shall
pay Landlord all late charges on demand, which may be made from
time to time. No failure by Landlord to insist upon the strict
performance by Tenant of its obligations to pay late charges
shall constitute a waiver by Landlord of its right to enforce
the provisions of this Article 6 in any instance thereafter
occurring.
-67-
<PAGE>
ARTICLE 7
INSURANCE
Section 7.01. Insurance Requirements.
(a) Liability Insurance. At all times during
the Term, Tenant, at its sole expense, shall carry or cause to
be carried insurance against all liability with respect to the
Premises and the operations related thereto, whether conducted
on or off the Premises, in an amount not less than twenty-five
million dollars ($25,000,000) per occurrence and designating
Landlord and Lease Administrator as an additional insured.
Such insurance shall meet all of the standards, limits,
minimums and requirements described in Section 7.07.
(b) Property Insurance. At all times during the
Term, Tenant, at its sole cost and expense, shall carry or
cause to be carried All Risk property damage insurance
protecting Tenant against loss to the Improvements, and
meeting all of the standards, limits, minimums and requirements
described in Section 7.08.
(c) Workers' Compensation and Disability
Insurance. At all times during the Term, Tenant, at its sole
cost and expense, shall carry or cause to be carried Statutory
Workers' Compensation and New York State Disability Benefits
Insurance and any other insurance required by law covering all
persons employed by Tenant, contractors, subcontractors, or
any entity performing work on or for the Premises, including
-68-
<PAGE>
Employers Liability coverage in an amount not less than
$2,000,000.00.
(d) Construction Insurance. During the
performance of any Construction Work the estimated cost of
which exceeds $500,000.00, the liability insurance carried or
caused to be carried by Tenant pursuant to Section 7.01(a)
hereof shall also include the insurance described in Section
7.09. The fifty million dollar ($50,000,000) combined single
limit set forth in Section 7.09 shall constitute the aggregate
amount of liability insurance (including the twenty-five
million dollar ($25,000,000) amount set forth in Section
7.01(a)) carried by Tenant during the performance of any
Construction Work the estimated cost of which exceeds
$500,000.00.
Section 7.02. Treatment of Proceeds.
(a) Proceeds of Property Insurance in General.
Insurance proceeds payable with respect to a property loss
shall be paid to Tenant and shall be used for Restoration
purposes to the extent required by this Lease.
(b) Cooperation in Collection of Proceeds.
Landlord shall cooperate with Tenant in connection with the
collection of any insurance moneys that may be due in the event
of loss, and Landlord, at Tenant's request, shall execute and
deliver such proofs of loss and other instruments as may be
required of Landlord for the purpose of obtaining the recovery
-69-
<PAGE>
of any such insurance moneys, provided that Tenant shall pay or
reimburse Landlord for any out-of-pocket costs and expenses
incurred by Landlord in connection therewith.
Section 7.03. General Requirements Applicable to
Policies.
(a) Insurance Companies. All of the insurance
required by this Article shall be with companies licensed or
authorized to do business in the State of New York that have a
rating in the latest edition of "Best's Key Rating Guide" of B
10 or better, or such lower rating that Landlord may approve in
writing, such approval not to be unreasonably withheld or
delayed; provided, however, that Tenant shall have the right to
act as a self-insurer with respect to the insurance required to
be carried by Tenant pursuant to this Lease in accordance with
the provisions of Section 7.03(b) hereof.
(b) Self Insurance. In the event that Tenant
wishes to act as a self-insurer with respect to all or any
portion of the insurance required to be carried by Tenant
pursuant to this Lease, Tenant shall submit to Landlord a plan
of self insurance therefor, and Landlord (in consultation with
a recognized risk management firm) shall review such plan of
self insurance and shall not unreasonably withhold or delay its
consent to Tenant's acting as a self-insurer pursuant to such
plan of self insurance. In the event that Landlord withholds
its consent to such plan of self insurance, Landlord shall
-70-
<PAGE>
specify its reasons for withholding such consent and shall
advise Tenant of the changes to such plan of self insurance
that would make it acceptable to Landlord. Notwithstanding
anything to the contrary contained herein: (i) in the event
that Tenant obtains approval from the State of New York to act
as a self-insurer with respect to Workers Compensation
Insurance, Landlord's consent to Tenant acting as a
self-insurer with respect to Workers Compensation Insurance
shall be deemed given, (ii) Tenant shall have the right to
submit to arbitration pursuant to Article 34 hereof the issue
of whether Landlord has acted unreasonably in withholding its
consent to Tenant's plan of self insurance and what changes, if
any, should be required to such plan of self insurance and
(iii) Landlord, upon prior written notice to Tenant, shall have
the right to review Tenant's plan of self insurance in
consultation with Landlord's in-house risk manager in lieu of a
recognized risk management firm; provided, however, if Landlord
notifies Tenant of its intention to do so, Tenant shall have
the right to require Landlord to retain a recognized risk
management firm of Landlord's choosing, at Tenant's reasonable
expense.
(c) Required Certificates. Certificates of
insurance evidencing the issuance of all insurance required by
this Article (which certificates shall not indicate that the
issuance of such insurance is subject to payment), describing
-71-
<PAGE>
the coverage and providing for thirty (30) days prior notice to
Landlord of cancellation or non-renewal, shall be delivered to
Landlord upon issuance of such insurance or, in the case of new
or renewal policies replacing any policies expiring during the
Term, not later than ten (10) days before the expiration dates
of any expiring policies. The certificates of insurance shall
be issued by the insurance company or a duly authorized agent.
Upon reasonable prior written request, Landlord shall have the
right to review and copy the original policy or policies of
insurance at Tenant's offices.
(d) [Intentionally Omitted].
(e) Required Insurance Policy Clauses. Each
policy of insurance required to be carried pursuant to the
provisions of this Article shall contain (i) with respect to
property insurance only, if the insurer would otherwise have a
right to subrogation with respect to its claims against
Landlord, a written acknowledgment by the insurance company
that its right to subrogation has been waived with respect to
all such claims (provided that such waiver is then customarily
available at no additional cost for similar types of insurance
policies), (ii) an agreement by the insurer that such policy
shall not be canceled, modified or denied renewal (other than
for non-payment of premium) without at least thirty (30) days
prior written notice to Landlord and (iii) a provision that no
act or omission of Tenant shall limit the obligation of the
-72-
<PAGE>
insurance company to pay the amount of any loss sustained by
Landlord.
Section 7.04. Increases in Coverage. From time to
time, but not more frequently than once per year, Landlord may
require Tenant to increase or cause to be increased the amount
of coverage provided under the policies of insurance, provided,
however, that (a) unless Landlord is able reasonably to
demonstrate the need for a greater level of coverage, the
amount of such increased coverage shall not exceed the amounts
of similar coverages as at the same time are commonly carried
by owners of comparable buildings, (b) in the event Tenant
disputes any determination by Landlord under this Section, the
matter shall be resolved by arbitration pursuant to Article 34
hereof and (c) in no event shall Tenant be required to purchase
coverage in amounts not then available at commercially
reasonable rates.
Section 7.05. No Representation as to Adequacy of
Coverage. The requirements set forth herein with respect to
the nature and amount of insurance coverage to be maintained or
caused to be maintained by Tenant hereunder shall not
constitute a representation or warranty by Landlord that such
insurance is in any respect adequate.
Section 7.06. Blanket and/or Umbrella Policies. The
insurance required by the provisions of this Article may, at
Tenant's election, be effected by blanket and/or umbrella
-73-
<PAGE>
policies issued to Tenant covering the Premises and other
properties owned or leased by Tenant. If the insurance
required by this Article shall be effected by any such blanket
or umbrella policies, Tenant shall furnish to Landlord, upon
Landlord's request, certificates of insurance as provided in
this Article, setting forth the amount of insurance applicable
to the Project.
Section 7.07. Liability Insurance Requirements. The
insurance required by Section 7.01(a) of this Lease shall
consist of commercial general liability insurance protecting
against liability for bodily injury, death, property damage and
personal injury. Such insurance shall:
(a) include a broad form property damage
liability endorsement with fire legal liability limit of not
less than $100,000.00;
(b) contain blanket contractual liability
insurance covering written contractual liability;
(c) contain contractual liability insurance
covering Tenant's indemnification obligations under Article 20;
(d) contain independent contractors coverage;
(e) contain a notice of occurrence clause;
(f) contain a knowledge of occurrence clause;
(g) contain a thirty (30) day notice of
cancellation or non-renewal clause specifically including
notice of cancellation or non-renewal for non-payment of
premium;
-74-
<PAGE>
(h) contain an unintentional errors and
omissions clause;
(i) contain coverage for suits arising from the
use of reasonable force to protect persons and property;
(j) contain a cross liability endorsement;
(k) contain coverage for automobiles owned or
leased by Tenant; and
(l) contain no exclusions other than those
included in the basic forms described unless specifically
approved in each instance by Landlord, such approval not to be
unreasonably withheld or delayed.
Section 7.08. Property and Other Insurance
Requirements.
The insurance required by Section 7.01(b) of this
Lease shall consist at least of the following:
(a) Insurance covering all Improvements in the
amount of the full Replacement Value of the Improvements and
including the following coverages or clauses:
(i) a replacement cost valuation without
depreciation or obsolescence clause;
(ii) debris removal coverage;
(iii) demolition cost for undamaged portion
coverage;
(iv) increased cost of construction coverage;
(v) an agreed or stipulated amount
endorsement negating any coinsurance clauses;
-75-
<PAGE>
(vi) a thirty (30) day prior notice of
cancellation or non-renewal clause providing for
notice to Landlord and specifically including
cancellation or non-renewal for non-payment of premium.
Section 7.09. Construction Insurance Requirements.
The insurance required by Section 7.01(d) shall consist at
least of the following:
(a) Insurance in an amount not less than fifty
million dollars ($50,000,000) combined single limit for bodily
injury and property damage protecting Tenant, Landlord, Lease
Administrator and the general contractor against all insurable
legal liability claims resulting from work being performed by
or for general contractors and subcontractors engaged to work
on or for the Premises.
(b) Automobile liability insurance covering any
automobile or other motor vehicle owned or leased by Tenant and
used in connection with work being performed on or for the
Premises in an amount not less than ten million dollars
($10,000,000).
(c) The insurance specified in Section 7.09(a)
and (b) shall contain:
(i) Products Liability/Completed Operations
coverage;
(ii) a broad form property damage
endorsement;
-76-
<PAGE>
(iii) explosion, collapse and underground
property damage coverage;
(iv) independent contractors coverage;
(v) blanket contractual liability, written
and oral, coverage;
(vi) contractual liability coverage covering
any indemnification agreement protecting Tenant,
Landlord, Lease Administrator and the City (if the
City is no longer Landlord); and
(vii) an endorsement providing that
excavation and foundation work are covered and that
the "XCU exclusions" have been deleted.
Section 7.10. Deductibles. Landlord agrees that
Tenant shall have the right to carry such deductibles with
respect to the insurance required herein as Tenant may
reasonably determine, taking into account (i) changes in the
insurance market from time to time, (ii) the financial strength
of Tenant and (iii) the fact that other companies similar in
size and/or financial strength to Tenant often carry
substantial deductibles.
Section 7.11. No Separate Contractor Coverage
Required. Notwithstanding anything to the contrary in this
Lease or Funding Agreement #1, Tenant shall not be required to
cause any contractors, subcontractors or suppliers engaged in
the performance of Construction Work to carry insurance of any
-77-
<PAGE>
nature whatsoever, it being understood and agreed between
Landlord and Tenant that Landlord's interests are adequately
protected by Tenant's obligations under this Article 7 and by
Tenant's obligation to indemnify Landlord pursuant to Article
20 hereof.
-78-
<PAGE>
ARTICLE 8
DAMAGE, DESTRUCTION AND RESTORATION
Section 8.01. Notice to Landlord. Tenant shall
notify Landlord reasonably promptly upon obtaining actual
knowledge thereof if, after the Possessory Date, the Premises
are damaged or destroyed in whole or in part (other than an
insubstantial part) by fire or other casualty ("Casualty Loss").
Section 8.02. Tenant's Option Upon a Substantial
Casualty Loss. In the event of a Casualty Loss to
Substantially All of the Premises, Tenant may elect, in its
sole discretion by notice in writing to Landlord within one
hundred and eighty (180) days after obtaining knowledge of the
Casualty Loss (a) to terminate this Lease or (b) to exercise
its option to purchase the Premises subject to and in
accordance with Article 21. In the absence of any such
election, or in the event of a Casualty Loss to less than
Substantially All of the Premises, Tenant shall restore the
Premises, in accordance with the provisions of this Article and
Article 13, to the extent, at least, that immediately after the
Casualty Restoration, the Premises shall contain a Printing
Facility which, at Tenant's option, shall be at least a Minimum
Printing Facility or a smaller Printing Facility that has
substantially the same capacity with respect to the printing,
production and distribution of newspapers, magazines and other
periodicals or printed materials as the Printing Facility that
-79-
<PAGE>
was in operation immediately prior to the Casualty Loss (or, if
the Casualty Loss is prior to Substantial Completion, then at
least a Minimum Printing Facility (a "Casualty Restoration").
Section 8.03. Lease Termination or Purchase.
(a) Lease Termination. If Tenant shall have
elected to terminate this Lease pursuant to Section 8.02(a),
the Expiration Date shall be the date specified in Tenant's
termination notice, which shall be within three hundred and
sixty-five (365) days thereafter. In the event the Lease is
terminated pursuant to this Section, Tenant shall cause the
damaged portions of the Improvements to be demolished to the
foundation and cleared of debris, and shall repair and restore
any preexisting fence, unless Landlord shall have requested
Tenant not to demolish any particular Improvement, in which
event Tenant shall have no obligation to demolish such
Improvement. If any portion of the foundation is destroyed,
Tenant shall demolish such portion and bring the land
thereunder to the pre-existing grade of the foundation.
(b) Purchase Option. If Tenant shall have
elected to exercise its Purchase Option, such exercise shall be
governed by the provisions of Article 21.
Section 8.04. Casualty Restoration Construction
Work. If Tenant shall not have elected to terminate this Lease
pursuant to Section 8.02(a) or exercised its Purchase Option
pursuant to Article 21, Tenant shall (subject to Unavoidable
-80-
<PAGE>
Delays) commence the Construction Work in connection with a
Casualty Restoration within one hundred and eighty (180) days
after receipt of the insurance proceeds arising from the damage
or destruction which caused the need for such Casualty
Restoration, to the extent insured, or within one hundred and
eighty (180) days of the Casualty Loss, to the extent the same
is not insured. Tenant shall provide Landlord with Tenant's
estimate of the cost of the Casualty Restoration and the time
schedule pertaining to the performance and completion of such
Casualty Restoration. Tenant shall also submit to Landlord
copies of all Plans and Specifications prepared in connection
with such Casualty Restoration for Landlord's review and
approval, subject to the provisions of Section 13.01(c)
including, without limitation, the provisions thereof providing
for deemed approvals, notification to the Buildings Department
and any other applicable Governmental Authorities and an
abatement of Rental for Lease Administrator's failure to take
certain actions in a timely manner, and shall not commence
construction of such Casualty Restoration until such Plans and
Specifications have been approved or deemed approved by
Landlord.
Section 8.05. Restoration Funds. All insurance
proceeds shall be paid directly to Tenant (unless Tenant agrees
with a Recognized Mortgagee to have such funds paid to the
Recognized Mortgagee thereof to be used for Casualty
-81-
<PAGE>
Restoration purposes) and, if Tenant shall not have elected to
terminate this Lease pursuant to Section 8.02(a) or exercised
its Purchase Option pursuant to Article 21, shall be applied by
Tenant to the extent necessary toward the Casualty Restoration.
Section 8.06. Effect of Casualty on This Lease. If
Tenant shall not have elected to terminate this Lease pursuant
to Section 8.02 or exercised its Purchase Option pursuant to
Article 21, this Lease shall not terminate, be forfeited or be
affected in any manner whatsoever, and there shall be no
reduction or abatement of Rental, by reason of damage to, or
total or partial destruction of, or untenantability of, the
Premises or any part thereof resulting from a Casualty Loss.
Subject to Section 8.02, Tenant's obligations hereunder,
including the payment of Rental, shall continue as though the
Casualty Loss had not occurred, without abatement, suspension,
diminution or reduction whatsoever. It is the intention of
Landlord and Tenant that the foregoing is an "express agreement
to the contrary" as provided in Section 227 of the Real
Property Law of the State of New York.
-82-
<PAGE>
ARTICLE 9
CONDEMNATION
Section 9.01. Substantial Condemnation.
(a) Termination of Lease for Substantial
Condemnation. If all or Substantially All of the Premises are
taken in a Condemnation, this Lease shall terminate on the Date
of Condemnation and the Rental payable by Tenant hereunder
shall be apportioned and paid to the Date of Condemnation.
(b) Disbursement of Award. If all or Substantially
All of the Premises are taken in a Condemnation, the entire
award paid in connection with such Condemnation shall be
apportioned as follows and in the following order:
(i) there shall first be paid to Landlord
so much of the award as would equal the Purchase Price
that would be payable for that part of the Land taken
in such proceeding based upon the ratio that the
square footage of the Land taken bears to the total
square footage of the Land (provided that, in such
event, the Purchase Price specified in Article 21
shall be reduced by the amount of the award paid to
Landlord under this Section); and
-83-
<PAGE>
(ii) subject to rights of any Recognized
Mortgagees, Tenant shall receive the balance of the
award, if any.
Notwithstanding the foregoing, if all or any portion of the
Premises are taken or condemned by the City or any department,
agency or instrumentality thereof, the City (whether or not it
is Landlord hereunder at the time) agrees to pay to Tenant, in
addition to the award paid to Tenant as the result of such
taking or condemnation, an additional sum of money such that
the total compensation paid to Tenant as the result of such
taking or condemnation shall include an amount equal to the
difference between (x) all costs incurred or to be incurred by
Tenant as the result of such taking or condemnation including,
without limitation, (i) moving expenses, (ii) land acquisition
costs and (iii) the total cost of constructing, purchasing,
leasing and equipping (with new equipment if the utility of the
equipment at the Premises would be materially impaired upon
removal and installation at a replacement facility, or with
such existing equipment, in which event Landlord shall be
responsible for all costs associated with the disassembly,
moving, reassembly and installation of such equipment) or
otherwise acquiring a replacement facility, and (y) the amount
of the award paid to Tenant as the result of such taking or
condemnation.
-84-
<PAGE>
(c) Definition.
(i) "Condemnation" means a taking (whether
or not described as a "condemnation") of all or any
part of the Premises (excluding a taking which is
limited to the fee interest in the Land provided that,
after such taking, Tenant's rights under this Lease
including, without limitation, Tenant's option
pursuant to Article 21 hereof to purchase the
Premises, are not affected) for any public or
quasi-public purpose by any lawful power or authority
by the exercise of the right of condemnation or
eminent domain pursuant to the provisions of
applicable law.
(ii) "Date of Condemnation" means the
earlier of (A) the date on which actual possession of
the Premises, or any part thereof, as the case may be,
is acquired by any lawful power or authority in a
Condemnation or (B) the date on which title to the
Premises, or any part thereof, as the case may be, has
vested in any lawful power or authority in a
Condemnation.
Section 9.02. Less Than A Substantial Condemnation.
(a) Condemnation of Less than Substantially All
of the Premises. If less than Substantially All of the Premises
are taken in a Condemnation, this Lease shall continue for the
-85-
<PAGE>
remainder of the Term and (i) the Rental payable hereunder
shall be reduced pursuant to the provisions of Section 9.09
hereof and (ii) there shall not be any diminution of any of
Tenant's non-montary obligations hereunder, except to the
extent Tenant may be prevented from meeting any such
obligations by order of the condemning authority.
(b) Obligation to Restore the Premises. If less
than Substantially All of the Premises are taken in a
Condemnation, Tenant shall restore the remaining portion of the
Premises not so taken to the same extent that would be required
for a Casualty Restoration under Section 8.02 (a "Condemnation
Restoration").
(c) Payment of Award. In the event of any
Condemnation pursuant to Section 9.02(a), the award shall be
paid in accordance with Section 9.01(b).
(d) Performance of Condemnation Restoration.
The Construction Work in connection with a Condemnation
Restoration, submission of plans and specifications, provision
of estimated cost and time schedule, and disbursement by Tenant
of the Condemnation award shall be done, determined, made and
governed in accordance with the provisions of Section 8.04 as
if the Condemnation Restoration were a Casualty Restoration.
Section 9.03. [Intentionally Omitted]
Section 9.04. Temporary Taking.
-86-
<PAGE>
(a) Notice of Temporary Taking. If the
temporary use of the whole or any portion of the Premises is
taken for a public or quasi-public purpose by a lawful power or
authority by the exercise of the right of condemnation or
eminent domain, Tenant shall give Landlord notice within
thirty (30) days thereof. If the Temporary Taking is by the
City or any department, agency or instrumentality thereof, the
City (whether or not it is the Landlord hereunder at the time)
shall pay to Tenant an amount equal to two (2) times the amount
of the award(s) paid to Tenant as the result of such Temporary
Taking, at the same time that such award(s) are paid to
Tenant. The Term shall not be reduced or affected in any way
by reason of such temporary taking and Tenant shall continue to
pay to Landlord the Rental without reduction or abatement.
(b) Effect of Temporary Taking. In the event of
a temporary taking as described in Section 9.04(a), Tenant
shall be entitled to receive the entire amount of any award
made for such taking, whether paid by way of damages, rent or
otherwise; provided, however, that if such period of temporary
use or occupancy shall extend beyond the expiration of the Term
such award shall be apportioned between Landlord and Tenant as
of such date of expiration of the Term; provided, however, that
Landlord shall not be entitled to any portion of such award if
Tenant exercises its option to purchase the Premises within six
(6) months after notice to Tenant of the determination of such
-87-
<PAGE>
award. Notwithstanding the foregoing, if the taking results in
changes or alterations in the Project that would necessitate
expenditures to permit the operation of the Premises as a
Printing Facility, then Tenant shall to the extent of the
moneys received from the award with respect to the Temporary
Taking restore the Project in the same manner, and subject to
the same terms and conditions, as if such restoration were a
Condemnation Restoration.
(c) Temporary Taking Exceeding Ninety Days.
Notwithstanding anything to the contrary contained in this
Lease, if there is a Temporary Taking of Substantially All of
the Premises for a period exceeding ninety (90) days, Tenant,
at its option, shall have all of the rights afforded to it
under this Lease as if such event was a taking of Substantially
All of the Premises pursuant to the provisions of Section 9.01
hereof.
Section 9.05. Governmental Action Not Resulting in a
Condemnation. In case of any governmental action not resulting
in the Condemnation of any portion of the Premises but creating
a right to compensation therefor, such as the changing of the
grade of any street upon which the Premises abut, then this
Lease shall continue in full force and effect without reduction
or abatement of Rental. Any award payable thereunder shall be
paid to Tenant.
-88-
<PAGE>
Section 9.06. Collection of Awards. Each of the
parties shall execute documents that are reasonably required to
facilitate collection of any awards made in connection with any
condemnation proceeding referred to in this Article.
Section 9.07. Tenant's Approval of Settlements.
Tenant shall have the exclusive right to settle or compromise
any Condemnation or other governmental action without the
consent of Landlord.
Section 9.08. Negotiated Sale. In the event Tenant
approves a negotiated sale of all or a portion of the Premises
in lieu of condemnation, the proceeds shall be distributed as
provided herein for cases of condemnation.
Section 9.09. Reduction of Base Rent and Land PILOT.
In the event of any Condemnation described in Section 9.02,
effective upon the Date of Condemnation, Base Rent and Land
PILOT (and the Schedule of Maximum Land PILOT annexed hereto as
Exhibit D) shall be reduced by an amount (and recalculated in
the case of Exhibit D) equal to the product obtained by
multiplying the Base Rent and Land PILOT (and Maximum Land
PILOT) payable (or shown on Exhibit D) immediately prior to
such Date of Condemnation by a fraction, the numerator of
which is the amount of Land at the Premises taken pursuant to
the Condemnation proceeding and the denominator of which is the
amount of Land at the Premises immediately before the
Condemnation. Improvements PILOT shall be appropriately
-89-
<PAGE>
reduced in accordance with Section 3.05(b)(ii)(A) and (B) based
on any reduction in Gross Building Square footage caused by the
condemnation.
Section 9.10. Reduction of Purchase Price. In the
event of any Condemnation, the Purchase Price shall be reduced
by the amount, if any, equal to the portion of any Condemnation
award paid to Landlord pursuant to the provisions of Section
9.01(b)(i) hereof.
-90-
<PAGE>
ARTICLE 10
TRANSFER AND SUBLETTING
Section 10.01. Tenant's Right to Assign, Sublet,
Transfer, Etc.
(a) Limitations on Right of Transfer. Tenant
shall not enter into any Transfer other than a Collateral
Assignment or a Permitted Transfer.
(b) Definitions.
(i) "Transfer" means (A) the sale,
exchange, assignment or other disposition of all or
substantially all of Tenant's interest in this Lease
or the leasehold estate created hereby whether by
operation of law or otherwise, or (B) a Sublease of
all or substantially all of the Premises (a "Major
Sublease").
(ii) "Collateral Assignment" means a
Transfer (A) to a Recognized Mortgagee or an Affiliate
of a Recognized Mortgagee, as collateral security, or
following foreclosure of the Recognized Mortgage, or
in lieu of foreclosure thereof, or (B) by a Recognized
Mortgagee or an Affiliate thereof following either
foreclosure of the Recognized Mortgage or a Transfer
in lieu of foreclosure thereof.
(iii) "Transferee" means a Person to which a
Transfer is made.
-91-
<PAGE>
(iv) "Permitted Transfer" means a Transfer
to either (x) a Transferee which is an Affiliate of
Tenant, regardless of whether such Transferee is a
Prohibited Person (an "Affiliate Transfer"), (y) a
Transferee which is a successor to Tenant or any
Affiliate of Tenant by merger, consolidation or
transfer of substantially all of the assets of Tenant
or such Affiliate of Tenant, regardless of whether
such Transferee is a Prohibited Person (a "Merger/Sale
Transfer") or (z) a Transferee which is not a
Prohibited Person provided that, in the case of (x),
(y) and (z) above:
(A) except in the case of a Major Sublease,
the Transferee assumes all of Tenant's
obligations hereunder in accordance with the form
of Assumption attached hereto as Exhibit H;
(B) on the effective date of the Transfer
this Lease is in full force and effect;
(C) notice pursuant to Section 10. 01(e)
and (f) has been given to Landlord;
(D) Tenant has delivered or, within five
(5) Business Days after the Transfer, delivers to
Landlord copies of the instruments of Transfer in
conformance with Section 10.01(h).
(c) Definition of Prohibited Persons. The term
"Prohibited Person" as used in this Lease shall mean:
-92-
<PAGE>
(i) Any Person (A) that is in monetary
default after notice and beyond any applicable grace
period, of its obligations under any material written
agreement with Landlord, or (B) that directly
controls, is controlled by, or is under common control
with a Person that is in monetary default after notice
and beyond any applicable grace period, of its
obligations under any material written agreement with
Landlord, unless, in each instance, such default or
breach either (x) has been waived in writing by
Landlord or (y) is being disputed in a court of law,
administrative proceeding, arbitration or other forum
or (z) is cured within thirty (30) days after a
determination and notice to Tenant from Landlord that
such Person is a Prohibited Person as a result of such
default.
(ii) Any Person that is an organized crime
figure, unless the City is otherwise doing business
with such person notwithstanding such organized crime
status.
(iii) Any government, or any Person that is
directly or indirectly controlled (rather than only
regulated) by a government, that is finally determined
to be in violation of (including, but not limited to,
any participant in an international boycott in
-93-
<PAGE>
violation of) the Export Administration Act of 1979,
as amended, or any successor statute, or the
regulations issued pursuant thereto, or any government
that is, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a
government that is subject to the regulations or
controls thereof.
(iv) Any government, or any Person that,
directly or indirectly, is controlled (rather than
only regulated) by a government, the effects or the
activities of which are regulated or controlled
pursuant to regulations of the United States Treasury
Department or executive orders of the President of the
United States of America issued pursuant to the
Trading with the Enemy Act of 1917, as amended.
(v) Any Person that is in default in the
payment to the City of any real estate taxes, sewer
rents or water charges totalling more than $10,000,
unless such default is then being contested in good
faith in accordance with the law or unless such
default is cured within thirty (30) days after a
determination and notice to Tenant from Landlord that
such Person is a Prohibited Person as a result of such
default.
-94-
<PAGE>
(vi) Any Person that has solely owned at any
time during the three (3) years immediately preceding
a determination of whether such Person is a Prohibited
Person, any property which both (x) was acquired by
such Person during such three (3) year period in an in
rem tax foreclosure and (y) was reacquired during such
three (3) year period from such Person by the City in
an in rem tax foreclosure, other than a property in
which the City has released or is in the process of
releasing its interest pursuant to the Administrative
Code of the City.
(vii) Any Person that is or has been at any
time during the three (3) years immediately preceding
a determination of whether such Person is a Prohibited
Person, in material, non-monetary default directly
related to a statutory requirement, Executive Order or
a regulation of a City agency after notice and beyond
any applicable grace period (which material,
non-monetary default has not been cured) under any
material written agreement with Landlord, unless, in
each instance, either (x) such default has been waived
in writing by Landlord or Landlord has not commenced
prior to its receipt of Tenant's notice given pursuant
to Section 10.01(e) hereof and thereafter diligently
pursued efforts to terminate its relationship with
-95-
<PAGE>
such Person or commenced prior to its receipt of
Tenant's notice given pursuant to Section 10.01(e)
hereof and thereafter diligently sought alternative
remedies available to it under such material written
agreement with respect to such material, non-monetary
default, (y) such default is being disputed in a court
of law, administrative proceeding, arbitration or
other forum (provided that such dispute was initiated
by such Person by the later to occur of (A) the date
that is sixty (60) days after such Person's receipt of
notice from Landlord of such material, non-monetary
default or (B) the date that is one hundred eighty
(180) days prior to the date of Tenant's notice given
pursuant to Section 10.01(e) hereof, failing which,
the issue of whether such Person is a Prohibited
Person shall be determined by arbitration pursuant to
the provisions of Section 10.01(g) hereof) or (z) such
default is cured within thirty (30) days after a
determination and notice to Tenant from Landlord that
such Person is a Prohibited Person as a result of such
default.
(d) Determination of Organized Crime Figure.
The determination as to whether any Person is an organized
crime figure shall be within the reasonable discretion of
Landlord and shall be made within thirty (30) days of the
receipt of Tenant's request for such determination.
-96-
<PAGE>
(e) Notice to Landlord. Tenant shall notify
Landlord of its intention to enter into any Transfer not less
than thirty (30) days before the proposed effective date of
such Transfer with respect to a Transfer that is not an
Affiliate Transfer or a Merger/Sale Transfer, and not less than
ten (10) days after the effective date of such Transfer with
respect to a Transfer which is an Affiliate Transfer or a
Merger/Sale Transfer.
(f) Contents of Notice.
(i) The notice required by Section 10.01(e)
shall contain the following information:
(A) in the case of a proposed corporate
Transferee or in the case of a corporate
general partner in a partnership that is the
proposed Transferee (other than a
corporation whose common stock is traded on
a recognized exchange or over-the-counter or
is registered under the Securities Act of
1933, as amended), a certificate of an
authorized officer of such corporation
giving the names and addresses of all
directors and officers of the corporation
and Persons having more than a five percent
(5%) interest in such Transferee;
-97-
<PAGE>
(B) in the case of a proposed corporate
Transferee, or corporate general partner in
a partnership that is the proposed
Transferee, whose stock is publicly traded
on a recognized exchange or over-the-counter
or is registered under the Securities Act of
1933, as amended, a certificate of an
authorized officer of such corporation
giving the names and addresses of all
directors and senior officers of the
corporation and Persons having more than a
ten percent (10%) interest in such
Transferee, to the extent such information
is disclosed in such corporation's then most
recent filings required to be made by it
with the Securities and Exchange Commission;
(C) in the case of a proposed partnership
Transferee, a certificate of the managing
general partner or other authorized general
partner in the proposed Transferee giving
the names and addresses of all general and
limited partners in the partnership; and
(D) in all cases, a certification by an
authorized officer, managing general
partner, or other authorized general partner
-98-
<PAGE>
of Tenant, whichever shall be applicable, to
the effect that, to the best of his or her
knowledge, the Transfer does not violate the
provisions of Section 10.01(a), but in no
event shall such person incur any personal
liability in the event such certification is
incorrect.
(ii) If any change in circumstances prior to
the closing of the transaction renders the information
provided in clause (i) above materially incomplete or
incorrect, Tenant shall notify Landlord of the change,
which notification shall recommence the period for
Landlord's notification to Tenant under Section
10.01(g).
(g) Objections; Deemed Consent. Landlord shall
notify Tenant, within thirty (30) days after receipt of notice
from Tenant pursuant to the provisions of Section 10.01(e),
whether the Landlord objects to consummation of the Transfer on
the grounds that the same would violate the provisions of
Section 10. 01(a), which objection shall be in writing and in
reasonable detail, and, in the absence of any such written
objection from Landlord within such period, Landlord shall be
deemed to have consented to the proposed Transfer.
Notwithstanding anything to the contrary set forth herein,
(x) Landlord's consent shall not be required with respect to
-99-
<PAGE>
any Transfer that is an Affiliate Transfer or a Merger/Sale
Transfer and (y) with respect to any Transfer that is not an
Affiliate Transfer or a Merger/Sale Transfer the only
permissible grounds for withholding consent shall be that the
Transferee is a Prohibited Person. Tenant shall have the right
to submit to arbitration pursuant to Article 34 hereof the
issue of whether Landlord has acted unreasonably in withholding
its consent to any Transfer that is not an Affiliate Transfer
or a Merger/Sale Transfer. If the Arbiter determines that
Landlord has acted unreasonably, then (i) Landlord shall be
deemed to have consented to such Transfer effective as of the
date of the Arbiter's decision and (ii) Tenant or the
Transferee shall be entitled to an offset against future
installments of Rental (excluding Impositions and College Point
Improvement Fund Payments) in an amount equal to the product
arrived at by multiplying (x) $1,000.00 by (y) the number of
days in the period commencing on the date Tenant gives a
Dispute Notice in connection with Landlord's withholding of
consent and expiring on the date of the Arbiter's decision.
(h) Instruments of Transfer. Tenant shall
deliver to Landlord, or shall cause to be delivered to
Landlord, within thirty (30) days after execution and delivery
thereof, (i) in the case of an assignment (including a
Collateral Assignment) of the Tenant's interest in this Lease,
executed counterpart(s) or photostatic copies of the
-100-
<PAGE>
instrument(s) of assignment and assumption, (ii) in the case
of a Major Sublease, an executed counterpart or a photostatic
copy of the Sublease, and (iii) for all other Transfers, an
executed counterpart or a photostatic copy of the instrument of
Transfer.
(i) Invalidity of Transactions. Subject to the
provisions of Section 10.01(g) hereof, any Transfer entered
into without Landlord's consent (or deemed consent, pursuant to
Section 10.01(g)) as required in this Lease, or which in any
other material respect fails to comply with the provisions of
this Lease, shall have no validity and shall be null and void
and without any effect.
Section 10.02. Subtenant Violation. No failure to
include an obligation under this Lease in any Sublease shall
relieve Tenant of, or in any way limit, such obligation under
this Lease. A violation or breach of any of the terms,
provisions or conditions of this Lease that results from, or is
caused by, an act or omission by a Subtenant (whether or not
such act or omission is permitted by such Subtenant's Sublease)
shall not relieve Tenant of Tenant's obligation to cure such
violation or breach.
Section 10.03. Tenant's Right to Sublease. Except as
expressly provided in Section 10.01(a) with respect to Major
Subleases, Tenant shall have the unrestricted right to sublet
portions of the Premises at any time and from time to time.
-101-
<PAGE>
ARTICLE 11
MORTGAGES
Section 11.01. Effect of Mortgages.
(a) Tenant shall have the right, at any time and
from time to time during the Term, to mortgage the leasehold
estate created hereby; provided that no Mortgage shall extend
to, affect, or be a lien or encumbrance upon, the estate and
interest of Landlord in the Premises or any part thereof.
(b) "Mortgage" means any mortgage or deed of
trust (including any consolidation of two or more mortgages or
deeds of trust) that constitutes a lien on Tenant's interest in
this Lease and the leasehold estate created hereby.
Section 11.02. Mortgagee's Rights Not Greater than
Tenant's.
(a) With the exception of the rights granted to
Recognized Mortgagees pursuant to the provisions of Sections
11.03, 11.04, 11.06, 11.07, and 11.10, and by any other
provision of this Lease, the execution and delivery of a
Mortgage or a Recognized Mortgage shall not give nor shall be
deemed to give a Mortgagee or a Recognized Mortgagee any
greater rights against Landlord than those granted to Tenant
hereunder.
(b) Definition:
"Recognized Mortgage" means a Mortgage
(i) the holder of which is not an
Affiliate of Tenant;
-102-
<PAGE>
(ii) that is held by a Person which is
either an Institutional Lender or which has (or
has an Affiliate which has) the financial
capacity and business expertise to operate the
Premises as a Printing Facility and, in either
case, is not controlled by an organized crime
figure; and
(iii) a photostatic copy of which has
been delivered to Landlord (with photostatic
copies of all modifications and extensions),
together with a certification by Tenant and the
Mortgagee confirming that said photostatic copies
are true copies of the documents and giving the
name and post office address of the holder of the
Mortgage.
Section 11.03. Notice and Right to Cure Tenant's
Defaults.
(a) Notice to Recognized Mortgagee. Landlord
shall give to each Recognized Mortgagee, at the address of the
Recognized Mortgagee stated in the certification referred to in
Section 11.02(b), or in any subsequent notice given by the
Recognized Mortgagee to Landlord, and otherwise in the manner
pursuant to the provisions of Article 25, a copy of each notice
of Default, at the same time as it gives such notice of
Default, to Tenant, and no such notice of Default shall be
-103-
<PAGE>
deemed effective unless and until a copy thereof shall have
been so given to each Recognized Mortgagee. In no event will
notices be delivered to more than two addresses per Recognized
Mortgagee.
(b) Right and Time to Cure. Subject to the
provisions of Sections 11.03(d) and 11.05, each Recognized
Mortgagee shall have a period of (i) thirty (30) days more, in
the case of a Default in the payment of Rental, and (ii) sixty
(60) days more, in the case of any other Default, than is
given Tenant under the provisions of this Lease to remedy the
Default, cause it to be remedied, or cause action to remedy a
Default to be commenced, provided that, except with respect to
a Default in payment of Rental, such Recognized Mortgagee
delivers to Landlord, within thirty (30) days after the
expiration of the time given to Tenant pursuant to the
provisions of this Lease to remedy the event or condition which
would otherwise constitute an Event of Default hereunder, a
written notice that it will take the action described in
Section 11.03(d)(iii)(A) or (B).
(c) Acceptance of Recognized Mortgagee's
Performance. Subject to the provisions of Section 11.05,
Landlord shall accept performance by a Recognized Mortgagee of
any covenant, condition or agreement on Tenant's part to be
performed hereunder with the same force and effect as though
performed by Tenant.
-104-
<PAGE>
(d) Commencement of Performance by Recognized
Mortgagee for Non-Rental Defaults. No Event of Default (other
than an Event of Default arising from the nonpayment of Rental)
shall be deemed to have occurred so long as
(i) all Rental is being timely paid as
required in this Lease (it being understood that, in
the case of a Recognized Mortgagee, Rental shall be
deemed timely paid if paid prior to the expiration of
the cure period provided in Section 11.03(b)(i)),
(ii) a Recognized Mortgagee has delivered
the notice required by Section 11.03(b) within the
period required thereby, and
(iii) the Recognized Mortgagee that delivered
such notice:
(A) in the case of a Default that is curable
without possession of the Premises by the
Recognized Mortgagee, has commenced in good
faith, within the period required in Section
11.03(b)(ii), to cure the Default and is
prosecuting such cure to completion with
diligence and continuity, or
(B) in the case of a Default where possession of
the Premises is required in order to cure
the Default, or which is a Default that is
otherwise not susceptible of being cured by
-105-
<PAGE>
a Recognized Mortgagee, has instituted
foreclosure proceedings, and is diligently
prosecuting the foreclosure proceedings to
obtain possession of the Premises, and, upon
obtaining possession of the Premises,
promptly commences to cure the Default
(other than a Default which is not
susceptible of being cured by a Recognized
Mortgagee) and prosecutes such cure to
completion with diligence.
Section 11.04. Execution of New Lease.
(a) Notice of Termination. If this Lease is
terminated by reason of an Event of Default, Landlord shall
give prompt notice thereof to each Recognized Mortgagee.
(b) Request for and Execution of New Lease. If,
within sixty (60) days of the later of (i) the date of
Landlord's notice to a Recognized Mortgagee pursuant to Section
11.04(a) or (ii) the date on which such Recognized Mortgagee
obtains possession of the Premises, such Recognized Mortgagee
shall request a new lease, then subject to the provisions of
Sections 11.04(c) and 11.05, within thirty (30) days after
Landlord shall have received such request, Landlord shall
execute and deliver at least two (2) counterparts of a new
lease of the Premises for the remainder of the Term to the
Recognized Mortgagee, or a designee or nominee thereof,
-106-
<PAGE>
provided that such designee or nominee is not a Prohibited
Person. Said Recognized Mortgagee (or permitted designee or
nominee thereof) shall promptly after its receipt of such new
lease of the Premises execute such new lease, as tenant
thereunder and deliver one (1) fully-executed counterpart to
Landlord. The new lease shall have the same priority and shall
contain all of the covenants, conditions, limitations and
agreements contained in this Lease, provided, however, Landlord
shall not be deemed to have represented or covenanted that such
new lease shall be superior to claims of Tenant, Tenant's other
creditors or a judicially appointed receiver or trustee for
Tenant.
(c) Conditions Precedent to Landlord's Execution
of New Lease. The provisions of Section 11.04(b)
notwithstanding, Landlord shall not be obligated to enter into
a new lease with a Recognized Mortgagee unless the Recognized
Mortgagee
(i) pays to Landlord, concurrently with the
execution and delivery of the new lease to Landlord,
all Rental due under this Lease up to and including
the date of the commencement of the term of the new
lease and all expenses, including, without limitation,
out-of-pocket reasonable attorneys' fees and
disbursements and court costs, incurred by Landlord or
Lease Administrator in connection with the Default or
-107-
<PAGE>
Event of Default, the termination of this Lease and
the preparation of such new lease,
(ii) agrees that it shall reasonably
promptly after execution of the new lease cure all
material Defaults (other than those not susceptible of
cure by a Recognized Mortgagee) then existing under
this Lease (as though this Lease had not been
terminated), and
(iii) delivers to Landlord a statement, in
writing, acknowledging that Landlord, by entering into
such new lease with such Recognized Mortgagee, shall
not have or be deemed to have waived any material
Defaults or Events of Default then existing under this
Lease (other than those not susceptible of cure by a
Recognized Mortgagee) notwithstanding that any such
material Defaults or Events of Default existed prior
to the execution of such new lease and that the
breached obligations which gave rise to the Defaults
or Events of Default are also obligations under such
new lease; provided that prior to the delivery of such
statement to Landlord, if requested by a Recognized
Mortgagee, Landlord shall specify in reasonable
detail, in writing, all existing material Defaults
then known to Landlord and, in the event the
Recognized Mortgagee disputes any such specified
-108-
<PAGE>
material Default of a nature described in Sections
24.01(b) or (c) hereof, the Recognized Mortgagee may
submit the matter to arbitration; provided, however,
that notwithstanding anything to the contrary
contained herein, such Recognized Mortgagee shall not
be responsible for any Defaults or Events of Default
which either (x) have been cured or, for any other
reason, no longer constitute a continuing Default or
Event of Default or (y) are not susceptible of cure by
a Recognized Mortgagee.
Section 11.05. Recognition by Landlord of Recognized
Mortgagee Most Senior in Lien. If more than one Recognized
Mortgagee has exercised any of the rights afforded by Sections
11.03 or 11.04, then, unless otherwise provided in the
Recognized Mortgage most senior in lien (and priority) or
consented to by the holder thereof, only that Recognized
Mortgagee, to the exclusion of all other Recognized Mortgagees,
whose Recognized Mortgage is most senior in lien (and priority)
shall be recognized by Landlord as having exercised such right,
for so long as such Recognized Mortgagee shall be diligently
exercising its rights under this Lease with respect thereto,
and thereafter only the Recognized Mortgagee whose Recognized
Mortgage is next most senior in lien (and priority) shall be
recognized by Landlord, unless such Recognized Mortgagee has
designated a Recognized Mortgagee whose Mortgage is junior in
-109-
<PAGE>
lien to exercise such right. If the parties shall not agree on
which Recognized Mortgage is prior in lien, such dispute shall
be determined, at no expense to Landlord, by a then current
certificate of title issued by a title insurance company
licensed in New York State and chosen by Landlord, and such
determination shall bind the parties.
Section 11.06. Appearance at Condemnation
Proceedings. A Recognized Mortgagee shall have the right to
appear in any condemnation proceedings and to participate in
any and all hearings, trials and appeals in connection
therewith.
Section 11.07. Rights Limited to Recognized
Mortgagees. The rights granted to a Recognized Mortgagee under
the provisions of this Lease shall not apply in the case of any
Mortgagee that is not a Recognized Mortgagee.
Section 11.08. Consent to Assignment of Tenant
Rights. Landlord hereby consents to the inclusion of a
provision in any Recognized Mortgage providing for, at the
option of the Recognized Mortgagee: (a) a conditional
assignment of the option to purchase granted under Article 21
of this Lease, (b) an assignment of Tenant's share of the net
proceeds from any award or other compensation resulting from a
Condemnation of Substantially All of the Premises or less than
Substantially All of the Premises as set forth in Article 9 of
this Lease, (c) the entry of the Recognized Mortgagee upon the
-110-
<PAGE>
Premises, without notice to Landlord or Tenant, to view the
state of the Premises, (d) an assignment of Tenant's right, if
any, to terminate, cancel, modify, change, supplement, alter or
amend this Lease, (e) an assignment of Tenant's rights under
any Sublease, and (f) effective upon any default under any such
Recognized Mortgage (i) the foreclosure of the Recognized
Mortgage pursuant to a power of sale by judicial proceedings or
other lawful means and the subsequent sale of the leasehold
estate to the purchaser at the foreclosure sale and a sale by
such purchaser and/or a sale by any subsequent purchaser, (ii)
the appointment of a receiver, irrespective of whether the
Recognized Mortgagee accelerates the maturity of all
indebtedness secured by the Recognized Mortgage (iii) the right
of the Recognized Mortgagee or the receiver to enter and take
possession of the Premises to manage and operate the same and
to collect the subrentals, issues and profits therefrom and to
cure any default under the Recognized Mortgage or any default
by Tenant under this Lease, and (iv) an assignment of Tenant's
right, title and interest in and to any deposit of cash,
securities or other property which may be held to secure the
performance of covenants, conditions and agreements contained
in this Lease, the premiums for or dividends upon any insurance
provided for the benefit of any Recognized Mortgagee or
required by the terms of this Lease, as well as in all refunds
or rebates of Taxes, Impositions or Exempt Taxes assessments
-111-
<PAGE>
upon or other charges against the Premises, whether paid or to
be paid.
Section 11.09. Prohibition Against Surrender.
Landlord shall not, without the prior written consent of each
Recognized Mortgagee, accept a voluntary surrender of this
Lease at any time while a Recognized Mortgage remains a lien on
the leasehold estate demised hereby.
Section 11.10. No Merger. Landlord hereby agrees,
for the benefit of any Recognized Mortgagee, that, so long as
any Recognized Mortgage shall remain a lien on the leasehold
estate demised hereby, that in the event title to the fee
interest in the Premises and the leasehold estate interest of
Tenant in this Lease shall for any reason, whether by operation
of law or otherwise, be vested in the same party, the
respective interests or estates shall not be deemed to merge,
it being the intention of the parties that the fee estate and
leasehold estate survive as separate distinct estates.
Section 11.11. No Subordination to Fee Mortgage. In
the event that Landlord shall place any mortgage on its fee
interest in the Premises, whether or not in violation of
Section 5.01 hereof, this Lease and any Recognized Mortgage
shall not be subordinate to any such fee mortgage.
Section 11.12. No Modifications. In the event that
Landlord and Tenant shall amend or alter any of the terms or
provisions of this Lease without the prior written consent of
-112-
<PAGE>
any Recognized Mortgagees, any such amendment or alteration
shall not be binding upon any such Recognized Mortgagees.
Section 11.13. Estoppel Certificate. Landlord, at
any time, and from time to time, upon at least twenty (20)
days' prior notice by a Recognized Mortgagee, shall execute,
acknowledge and deliver to such Recognized Mortgagee, and/or to
any other person, firm or corporation specified by such
Recognized Mortgagee, a statement certifying that this Lease is
unmodified and in full force and effect (or, if there have been
modifications, that the same is in full force and effect as
modified and stating the modifications), stating the dates to
which the rent and additional rent have been paid, and stating
whether or not there exist any defaults by Tenant under this
Lease, and, if so, specifying each such default. Such
statement shall also certify as to any additional matters
reasonably requested by such Recognized Mortgagee.
Section 11.14. Modification of Lease. In the event
that an entity that meets the requirements set forth in
Sections 11.02(b)(i) and (ii) hereof requests that reasonable
modifications be made to this Lease as a precondition to
entering into a Recognized Mortgage with Tenant with respect to
the Premises, Landlord shall agree and enter into such
reasonable modifications with Tenant; provided, however, that
no such requested modification shall (a) reduce the amounts
payable by Tenant hereunder, (b) modify the Term, (c)
-113-
<PAGE>
materially increase the rights of Tenant hereunder, or (d)
materially adversely affect the rights and obligations of
Landlord hereunder.
Section 11.15. Chattel Mortgages. Landlord
acknowledges and agrees that Tenant may lease or finance
purchases of Tenant's Property. Landlord, upon Tenant's
request, will enter into written agreements with any vendor,
lessor or lender from whom Tenant has purchased or leased
Tenant's Property or borrowed money for the purchase thereof on
such vendor's, lessor's or lender's standard form with such
reasonable changes that Landlord may request, providing that:
(i) such Tenant's Property shall be and remain personal
property notwithstanding the fact that the same may be affixed
to the Premises, (ii) the security interest of such vendor,
lessor or lender in such Tenant's Property shall be senior to
any interest of Landlord therein, (iii) in the event of a
default by Tenant under this Lease, Landlord shall provide such
vendor, lessor or lender with at least sixty (60) days prior
written notice and an opportunity to remove from the Premises
any Tenant's Property in which such vendor, lessor or lender
has a security interest and (iv) that such vendor, lessor or
lender may enter the Premises at any time pursuant to a written
agreement between Tenant and such vendor, lessor or lender for
the sole purpose of removing such Tenant's Property if such
removal is necessary to protect its security interest therein;
-114-
<PAGE>
provided that, in conducting such entry and removal, such
vendor, lessor or lender shall: (a) prior to entry, provide
Landlord upon Landlord's request with evidence of appropriate
liability insurance as reasonably determined by Landlord,
(b) use reasonable care, (c) repair all damage caused by its
activities in or about the Premises, and (d) comply with all
applicable laws.
Section 11.16. Additional Notices to Mortgagees. In
addition to providing a copy of each notice of Default to
Recognized Mortgagees pursuant to Section 11.03(a) hereof,
Landlord shall give to each Recognized Mortgagee, at the
address of the Recognized Mortgagee stated in the certification
referred to in Section 11.02(b), or in any subsequent notice
given by the Recognized Mortgagee to Landlord, and otherwise in
the manner pursuant to the provisions of Article 25, a copy of
each notice to Tenant, at the same time as it gives such notice
to Tenant, which requires Tenant to take or refrain from taking
any action if the failure to do so could result in a Default.
Section 11.17. Provisions of Lease Continue in Effect
After Foreclosure. In the event of a foreclosure of a
Recognized Mortgage pursuant to a power of sale by judicial
proceedings or other lawful means and the subsequent sale of
the leasehold estate to the purchaser at the foreclosure sale,
all of the terms and conditions of this Lease shall remain in
full force and effect, and shall be binding upon any purchaser
succeeding to the rights of Tenant under this Lease including,
without limitation, the provisions of Article 28 hereof.
-115-
<PAGE>
ARTICLE 12
CAR POUND
Section 12.01. Removal of Car Pound. Landlord shall
cause the Car Pound to be removed from the Premises and the
Possessory Date to occur on or prior to the 4th Anniversary
Date; provided that Tenant shall not be obligated to accept
possession of the Premises (and accordingly the Possessory Date
shall not occur) prior to the earlier to occur of (x) the Car
Pound Removal Date and (y) the 4th Anniversary Date; and
further provided, however, that at any time on or after the
date hereof and prior to the 10th anniversary of the Lease
Execution Date, if the Car Pound shall not have been removed
from the Premises, Tenant may give Landlord written notice (the
"Car Pound Removal Notice")
(a) stating that Tenant is prepared to either
(i) commence or continue the filling, rough grading
and/or compaction of soil at the Project or (ii)
Commence Construction of the Project on or about a
date (the "Car Pound Removal Date") which shall be
specified in the Car Pound Removal Notice and which
Car Pound Removal Date shall be
(i) not earlier than six (6) months after
the date of the Car Pound Removal Notice and
(ii) not later than nine (9) months after
the date of the Car Pound Removal Notice,
and
-116-
<PAGE>
(b) requiring that the Car Pound be removed and
the Possessory Date occur on or prior to the Car Pound
Removal Date,
in which event Landlord shall cause the Car Pound to be removed
and cause the Possessory Date to occur not later than the Car
Pound Removal Date subject, however, to delays due to acts of
God (including, without limitation, catastrophic weather
conditions), fire or casualty ("Landlord's Unavoidable
Delays"); provided, however, that Tenant shall not be obligated
to accept possession of the Premises (and acccordingly the
Possessory Date shall not occur) prior to the Car Pound Removal
Date specified in the Car Pound Removal Notice.
Landlord hereby acknowledges its receipt of the Car
Pound Removal Notice as of the date hereof, which Car Pound
Removal Notice sets forth June 17, 1994 as the Car Pound
Removal Date, and Landlord and Tenant agree that for the
purposes of this Lease, the Car Pound Removal Date shall mean
June 17, 1994; subject, however, to the provisions of the
immediately preceding paragraph with respect to Landlord's
Unavoidable Delays.
Section 12.02. Damages for Tenant's Failure to
Construct after Notice. If, without regard to whether Landlord
shall have commenced construction of a permanent relocation Car
Pound:
-117-
<PAGE>
(a) Prior to the 4th Anniversary Date, Tenant
shall deliver to Landlord a Car Pound Removal Notice,
(b) Landlord shall, or shall cause EDC to,
complete construction of an interim relocation Car
Pound for the cars to be removed from the Premises,
(c) the Possessory Date shall occur on or before
the Car Pound Removal Date, and
(d) Tenant shall fail to commence and dilgently
prosecute the driving of piles at the Project within
twelve (12) months after the Possessory Date
(provided that such twelve-month time
period shall be subject to "unavoidable delays"
of the same kind described above with respect to
Landlord's Unavoidable Delays), or such longer period
during which Tenant may provide Landlord, on a monthly
basis, with a certificate of a licensed professional
engineer stating that in such professional engineer's
opinion, taking into account sound construction
practices, it would not be advisable to begin the
driving of piles either (i) because soil brought to
the Project had not settled sufficiently or (ii) due
to other technical or weather-related reasons,
then, within thirty (30) days after Tenant's receipt of
Landlord's written demand, Tenant shall reimburse Landlord
and/or EDC for all out-of-pocket costs (both design and
-118-
<PAGE>
construction) incurred by Landlord or EDC in connection with
the construction of such interim relocation Car Pound after
receipt of the Car Pound Removal Notice. Landlord's demand
shall be accompanied by invoices, receipts or other
documentation evidencing the costs thereof, substantially the
same as those invoices, receipts and documentation to be
submitted by Tenant to Landlord in connection with the
construction of the Interim Car Pound as set forth in Funding
Agreement #3.
Section 12.03. Damages for Landlord's Failure to
Remove Car Pound. If the Possessory Date shall not have
occurred prior to the Car Pound Removal Date, then from and
after the Car Pound Removal Date and continuing until the
Possessory Date (or for such shorter period as may be
hereinafter set forth), Tenant shall be entitled to accrue, as
liquidated damages, the following amounts ("Car Pound Offset
Amounts") as offsets against future installments of Rental
(exclusive of Impositions and College Point Improvement Fund
Payments) becoming due and payable after the Possessory Date:
(a) for each month or portion thereof that
occurs during the period (the "Initial Three Month
Period") commencing with the Car Pound Removal Date,
and continuing until the earlier of (i) the day
preceding the Possessory Date or (ii) the day that is
three months after the Car Pound Removal Date, the Car
-119-
<PAGE>
Pound Offset Amount shall be equal to 100% of the Base
Rent and PILOT (which shall be deemed to accrue on a
daily basis) becoming due and payable with respect to
a like period of time commencing on the Possessory
Date; and
(b) for each month or portion thereof that
occurs during the period beginning on the day after
the expiration of the Initial Three Month Period, and
continuing thereafter until the earlier of (i) the day
preceding the Possessory Date or (ii) the day on which
Tenant shall terminate the Lease pursuant to Section
12. 05, the Car Pound Offset Amount shall be equal to
the sum of
(x) the Car Pound Offset Amount described in
Section 12.03(a),
plus
(y) $10,000 (apportioned on the basis of
thirty (30) day months);
(such Car Pound Offset Amount being
hereafter referred to as the "Basic Penalty
Offset"); provided, however, that
(A) for each month or portion of a
month after the Car Pound Completion Date the Car
Pound Offset Amount shall be equal to 200% of the
Basic Penalty Offset (for purposes hereof, the "Car
-120-
<PAGE>
Pound Completion Date" means (x) the earlier to occur
of (i) the date on which Landlord shall have completed
construction of an interim or permanent relocation Car
Pound or (ii) the date on which Landlord would have
completed construction of an interim or permanent
relocation Car Pound but for Landlord's willful
failure to prosecute such construction with due
diligence after commencement thereof or (y), with
respect to the interim relocation Car Pound
constructed by Tenant pursuant to a Self-Help Notice,
the date Tenant shall have completed construction of
such interim relocation Car Pound;
(B) if Tenant has given the Self-Help
Notice, and if within six (6) months thereafter Tenant
shall have failed to complete construction of the
interim relocation Car Pound (provided that such
six-month period shall be extended in respect of any
delays in completion due to Tenant's failure to use
reasonable and diligent efforts or due to acts of God
(including, without limitation, catastrophic weather
conditions (but excluding soil conditions), fire or
casualty), then, upon the expiration of such six-month
period (as such six-month period may be extended as
specifically provided in this subsection
12.03(b)(x)(B):
-121-
<PAGE>
(i) for each month or portion thereof
for the period commencing on the day after
the expiration of such six-month period (as
such six-month period may be extended as
specifically provided in this subsection
12.03(b)(x)(B)) and continuing thereafter
until the day that is six (6) months after
the expiration of such six-month period (as
such six-month period may be extended as
specifically provided in this subsection
12.03(b)(x)(B)), the Car Pound Offset Amount
shall be equal to one hundred fifty percent
(150%) of the Basic Penalty Offset, and
(ii) for each month or portion thereof
during the period commencing with the day
after the end of the period specified in the
immediately preceding clause (i) (provided
Tenant's failure to complete construction
during such period was not due to Tenant's
failure to use reasonable and diligent
efforts or due to acts of God (including,
without limitation, catastrophic weather
conditions, (but excluding soil conditions),
fire or casualty) and continuing until the
completion of construction by the Tenant of
-122-
<PAGE>
the interim relocation Car Pound, the Car
Pound Offset Amount shall be equal to 200%
of the Basic Penalty Offset; and
(C) if Tenant has given the Self-Help
Notice within six (6) months before or after the
second anniversary of the Lease Execution Date and
Landlord has certified that completion of construction
of a permanent relocation Car Pound and causing the
Possessory Date to occur would not require more than
an additional ninety (90) days after the date of the
Self-Help Notice, then during such 90-day period (but
only if Landlord fails to cause the Possessory Date to
occur before the expiration of such 90-day period),
the Car Pound Offset Amount shall be equal to one
hundred fifty percent (150%) of the Basic Penalty
Offset.
(e) The foregoing liquidated damage amounts are
fixed in consideration of the material harm and damage
that Tenant will sustain if the Possessory Date is
delayed because the Car Pound is not removed from the
Premises, it being recognized that the exact amount of
damage is impossible to ascertain, and Tenant shall
have no other or additional right to monetary damages
or compensation by reason of such delay in the
Possessory Date.
Section 12.04. Tenant's Self-Help Remedy.
-123-
<PAGE>
(a) If the Possessory Date shall not have
occurred on or prior to the Car Pound Removal Date,
Tenant, at its sole election, may give Landlord
written notice (the "Self-Help Notice") at any time
after the Car Pound Removal Date, but prior to the
first (1st) anniversary of the Car Pound Removal Date,
that Tenant elects to construct pursuant to Funding
Agreement #3 an interim relocation Car Pound at the
South Brooklyn Marine Terminal site described in
Exhibit J or such other site in the City as Landlord
may select if events have occurred after the date of
this Lease that make it no longer feasible in
Landlord's judgment to construct an interim relocation
Car Pound at the South Brooklyn Marine Terminal site
(the "Temporary Car Pound Relocation Site"); provided,
however, that with respect to any other site selected
by Landlord in accordance with the foregoing, Landlord
shall represent and warrant to Tenant that the
construction of an interim relocation Car Pound shall
be capable of being completed by a date not later than
the date that construction of an interim relocation
Car Pound at the South Brooklyn Marine Terminal site
could have been completed. Notwithstanding the
foregoing, if Tenant gives a Self-Help Notice within
three (3) months before or after the second
-124-
<PAGE>
anniversary of the Lease Execution Date, and if
Landlord certifies in good faith that completion of
construction of a permanent relocation Car Pound and
causing the Possessory Date to occur will not require
more than an additional ninety (90) days after the
date of the Self-Help Notice, Tenant shall not
commence construction of an interim relocation Car
Pound unless the Possessory Date shall not have
occurred upon or prior to the expiration of such
90-day period.
(b) If pursuant to the Self-Help Notice Tenant
commences construction of the interim relocation Car
Pound at the Temporary Car Pound Relocation Site, and
as a result thereof Tenant is entitled to any Funding
under Funding Agreement #3, then, if and to the extent
that EDC defaults in providing any such Funding,
Tenant shall have the right to offset all such
defaulted Funding against future installments of
Rental (excluding Impositions, but including College
Point Improvement Fund Payments) as provided in
Sections 3.06 and 4.01(a).
Section 12.05. Tenant's Right to Terminate the Lease.
If the Possessory Date shall not have occurred on or prior to
the later to occur of (i) the first (1st) anniversary of the
Car Pound Removal Date or (ii) if Tenant has given the
-125-
<PAGE>
Self-Help Notice, the first (1st) anniversary of the delivery
of the Self-Help Notice, Tenant may give written notice to
Landlord of its election to terminate this Lease; provided,
however, that, even if Tenant has given the Self-Help Notice it
shall nonetheless have the right to terminate this Lease at any
time after the first (1st) anniversary of the Car Pound Removal
Date, but if Tenant elects to terminate this Lease prior to the
first (1st) anniversary of the delivery of the Self-Help
Notice, such termination shall not be effective unless and
until Tenant shall have repaid to EDC all Funding received by
Tenant under Funding Agreement #3.
Section 12.06. Interim Car Pound. Notwithstanding
anything to the contrary contained in this Lease, in the event
that either (i) Tenant gives Landlord the Car Pound Removal
Notice at any time on or before December 1, 1994 or (ii) Tenant
gives Landlord the Car Pound Removal Notice at any time after
December 1, 1994 and Landlord fails within thirty (30) days
thereafter to certify in writing to Tenant that it believes in
good faith that completion of the permanent relocation Car
Pound and causing the Possessory Date to occur will not require
more than six (6) months after the date of the Car Pound
Removal Notice, then Landlord, in furtherance of its
obligations pursuant to Section 12.01 hereof, shall promptly
after the receipt of the Car Pound Removal Notice commence
construction of an interim relocation Car Pound, which interim
-126-
<PAGE>
relocation Car Pound shall be constructed by Landlord at the
South Brooklyn Marine Terminal site unless events have occurred
after the date of this Lease that make it no longer feasible
for Landlord to construct an interim relocation Car Pound at
the South Brooklyn Marine Terminal site.
Section 12.07. Interim Car Pound License. Landlord
hereby grants to Tenant a license, which will become effective
in the event that Tenant delivers the Self-Help Notice and
Landlord designates the Temporary Car Pound Relocation Site, to
enter the Temporary Car Pound Relocation Site for all of the
purposes set forth in Funding Agreement #3. The term of this
license shall extend until such time that Tenant has completed
its obligations at the Temporary Car Pound Relocation Site
pursuant to Funding Agreement #3 and shall not be terminated or
revoked by Landlord prior to such time unless Funding Agreement
#3 is terminated in accordance with its terms.
-127-
<PAGE>
ARTICLE 13
CONSTRUCTION WORK
Section 13.01. Construction of the Project.
(a) Commencement and Completion of Project.
Tenant shall Commence Construction of the Project not later
than the Outside Commencement Date, and Substantially Complete
at least a Minimum Printing Facility on or before the Scheduled
Completion Date.
(b) Definitions.
(i) "Commence Construction of the Project"
or "Commencement of Construction of the Project" means
the commencement of the driving of piles at the
Project. Commencement of Construction of the Project
shall not be deemed to have occurred merely because
Tenant has commenced or performed any of the following
functions (herein referred to as "Preliminary Site
Work"); (1) physical surveys of the site and other
functions of an investigatory nature, (2) Geotechnical
investigations including, without limitation, the
driving of a "split spoon" into the ground to
determine the ability of the soil to support a
structure, (3) the bringing on to the Premises of
temporary construction structures and trailers,
(4) removing debris from and grading and leveling the
site, (5) the filling, rough grading and compaction of
-128-
<PAGE>
the site to provide for a particular building
elevation, (6) drainage construction and site grading
and pavement and (7) the placement and storage of
equipment and construction materials at the Premises.
(ii) "Construction Commencement Date" means
the date of Commencement of Construction of the
Project. The Construction Commencement Date shall be
established by delivery to Landlord of a certification
from the Architect or Engineer of Record that the
commencement of the driving of piles at the Project
has occurred.
(iii) "Construction of the Project" means the
construction on the Land of the Project, in accordance
with the approved Plans and Specifications.
(iv) "Outside Commencement Date" means the
tenth (10th) anniversary of the Lease Execution Date,
which date shall be extended as the result of
Unavoidable Delays.
(v) "Plans and Specifications" means the
drawings and plans and specifications for the Project
or any portion or phase of the Project, prepared by
the Architect, complying with Section 13.01(e), and
approved pursuant to Section 13.01(c) and/or (d) as
such plans and specifications and drawings may be
modified, amended and supplemented from time to time
in accordance with the terms of this Lease.
-129-
<PAGE>
(vi) "Reviewable Features" means, with
respect to any submission of proposed Plans and
Specifications, features of such submission the review
of which is necessary to enable Lease Administrator to
determine:
(A) compliance with Requirements set forth
in the Urban Renewal Plan to the extent that such
Requirements are applicable to the Project, and
(B) the number of square feet of Gross
Building Area to be constructed.
(vii) "Scheduled Completion Date" means the
date that is thirty (30) days after notice from
Landlord given to Tenant at any time on or after the
fourth (4th) anniversary of Commencement of
Construction of the Project, which date shall be
extended as the result of Unavoidable Delays.
(viii) "Substantial Completion" or
"Substantially Complete(d)" means, the completion of
construction of an enclosed envelope of floor space,
environmentally controlled and containing (1) heating,
ventilating and air conditioning systems installed for
general-purpose or multi-purpose occupancy, (2) water,
sewer and sanitary facilities suitable for
multi-purpose occupancy, (3) electrical service,
including interior lighting, throughout the
-130-
<PAGE>
constructed structure suitable for general purpose or
multi-purpose occupancy, (4) fire detection and
protection and safety facilities suitable for
general-purpose or multi-purpose occupancy throughout
the structure, and (5) building shell construction
constructed to a level adequate to permit
build-to-suit occupancy with interior and exterior
walls and required for structural integrity; provided,
however that such structure need not include
production systems and the specific construction
features required to make the above described utility
system operational in the production of newspapers.
Substantial Completion shall be established by
delivery to Landlord of a certification from the
Architect or Engineer of Record that the
above-described structure shall have been constructed
in accordance with the Plans and Specifications
(subject to immaterial deviations) and any other
construction documents filed with the Buildings
Department, and the Substantial Completion Date shall
be established by the date of delivery of such
certification.
(c) Landlord Review of Plans. At least twenty-five
(25) days prior to the Commencement of Construction of the
Project, Tenant shall submit proposed Plans and Specifications
-131-
<PAGE>
for the Project to Lease Administrator for review and approval
of Reviewable Features, except that Tenant may submit proposed
Plans and Specifications for each phase or segment of
construction at least twenty-five (25) days before Commencement
of Construction of the portion of the Project described therein
if Tenant elects to submit the Plans and Specifications in a
phased sequence. The Plans and Specifications shall be
prepared in accordance with all applicable requirements of the
Buildings Department (including, without limitation, the
requirements of the New York City Building Code) and all other
applicable Requirements and, unless previously submitted, shall
be accompanied by a letter from the Architect or the Engineer
of Record stating that the facility contemplated by such Plans
and Specifications to be constructed, if constructed in
accordance with the specifications set forth in such Plans and
Specifications, is designed to accommodate the printing presses
and other equipment that Tenant has informed such Architect or
Engineer of Record that it intends to install at the facility
contemplated by such Plans and Specifications. The Plans and
Specifications shall, in addition, be prepared, to the extent
reasonably practicable, in such manner as to clearly show
(either graphically or by appropriate notes) that all elements
of the design conform to the Urban Renewal Plan to the extent
that such requirements are applicable to the Project. Lease
Administrator's review and approval of the Plans and
-132-
<PAGE>
Specifications as provided in this Section 13.01(c) shall be
limited to Reviewable Features, and Lease Administrator's
approval, shall not be unreasonably withheld. Notwithstanding
anything to the contrary contained herein, Landlord
acknowledges and agrees that (i) subject to Tenant's obligation
to submit more complete Plans and Specifications at a later
date, Plans and Specifications submitted to Lease Administrator
pursuant to the terms of this Section 13.01(c) need not be
completed to the extent needed by the Buildings Department to
issue a building permit, but should, in any event, be completed
to the extent needed by the Buildings Department to issue a
foundation permit and (ii) Plans and Specifications submitted
to Lease Administrator in a phased sequence pursuant to the
terms hereof need not show compliance with all Requirements set
forth in the Urban Renewal Plan that are applicable to the
Project (subject to Tenant's ultimate obligation to submit
Plans and Specifications which, in the aggregate, show
compliance with all such Requirements), but should, in any
event, show compliance with all such Requirements of the Urban
Renewal Plan that could be violated by construction pursuant to
the Plans and Specifications for the particular phase of
construction submitted to Lease Administrator (e.g., Tenant
shall have the right to submit Plans and Specifications for the
construction of a building prior to finalizing its landscaping
and signage design, in which event such Plans and
-133-
<PAGE>
Specifications (x) would be required to demonstrate compliance
with setback and building exterior materials Requirements of
the Urban Renewal Plan, but (y) would not be required to
demonstrate compliance with signage and landscaping
Requirements of the Urban Renewal Plan).
Lease Administrator shall approve or, if and to the extent that
the Plans and Specifications are not in compliance with the
Requirements of the Urban Renewal Plan which are required to be
shown on such Plans and Specifications pursuant to the
immediately preceding sentence or are not for a facility
containing at least the square footage of foundation and floor
area required for the Minimum Printing Facility, disapprove and
comment on such submission within twenty-five (25) days after
receipt thereof and, if approved, shall, concurrently with
notification to Tenant of such approval, advise the Buildings
Department and any other applicable Governmental Authority of
such approval. If Lease Administrator has disapproved any
submission of the Plans and Specifications or any portion or
aspect thereof, such disapproval shall be given to Tenant in
writing in a detailed manner setting forth the reasons for such
disapproval within such twenty-five (25) day period. Any
portions or aspects of the Plans and Specifications which Lease
Administrator has not disapproved and commented on as aforesaid
shall, upon the expiration of such twenty-five (25) day period,
-134-
<PAGE>
be deemed approved. If the portions or aspects that have been
approved or deemed approved constitute an independent element
of the Project, Lease Administrator shall promptly advise the
Buildings Department and any other applicable Governmental
Authority of such approval. Tenant shall submit to Lease
Administrator modified proposed Plans and Specifications with
respect to any portions or aspects of such Plans and
Specifications that are disapproved and commented on by Lease
Administrator, responsive to such comments that are given to
Tenant with respect to such disapproval, for Lease
Administrator's approval or further disapproval and comment,
until approved by Lease Administrator. Lease Administrator
shall approve or disapprove and comment on such subsequent
submission within fifteen (15) days after receipt thereof and,
if approved, shall, concurrently with notification to Tenant of
such approval, advise the Buildings Department and any other
applicable Governmental Authority of such approval.
(d) Modification of Approved Plans and
Specifications. If Tenant desires to modify the Plans and
Specifications, after they have been approved, Tenant shall
submit the revisions to Landlord. Landlord shall review such
submission as if such were an initial submission under Section
13.01(c), and the provisions thereof governing such a
submission shall apply, except that the period of fifteen (15)
days shall be substituted for the twenty-five (25) day period
set forth in Section 13.01(c) hereof.
-135-
<PAGE>
(e) Compliance with Requirements, Etc. The Plans and
Specifications shall comply with all applicable Requirements,
subject to the provisions hereof relating to the submission of
Plans and Specifications in a phased sequence. It shall be
Tenant's responsibility to assure such compliance. Landlord's
approval of the Plans and Specifications shall not be, nor
shall be construed as being, or relied upon as, a determination
as to the adequacy or sufficiency, structural or otherwise, of
the Plans and Specifications or of the compliance of such Plans
and Specifications with the Requirements (other than the Urban
Renewal Plan).
(f) Landlord's Right to Visit Premises. Landlord
shall have the right to visit the Premises at reasonable
intervals upon reasonable advance notice to Tenant.
(g) Arbitration of Plan Disapproval. In the event
that Tenant disputes whether Landlord has acted reasonably in
withholding its approval of Plans and Specifications or
modifications or resubmissions of Plans and Specifications,
Tenant shall have the right to submit such dispute to
arbitration pursuant to the provisions of Article 34 hereof,
and such Plans and Specifications or modifications or
resubmissions thereof shall be deemed approved if the Arbiter
determines that Landlord has acted unreasonably.
(h) Offset Against Rental.
-136-
<PAGE>
(i) In the event that Plans and
Specifications or modifications or resubmissions
thereof are deemed approved pursuant to the terms
hereof because Landlord has not responded timely,
Tenant shall give notice to Landlord advising Landlord
that such plans are deemed approved, and if Landlord
has not advised the Buildings Department and any
applicable Reviewing Party of such approval within
ten (10) days after the giving of such notice by
Tenant, then Tenant shall be entitled to an offset
against future installments of Rental (excluding
Impositions and College Point Improvement Fund
Payments) payable hereunder in an amount (the "Plans
and Specifications Offset Amount") equal to $1,000 for
each day during the period commencing on the day
immediately following the expiration of such ten (10)
day period and ending on the day on which Landlord
advises the Buildings Department and any applicable
Reviewing Party of such approval.
(ii) In the event that Landlord approves the
Plans and Specifications or modifications or
resubmissions thereof and Landlord fails to advise the
Buildings Department and any applicable Reviewing
Party of such approval within ten (10) days after such
approval, then Tenant shall be entitled to an offset
-137-
<PAGE>
against future installments of Rental (excluding
Impositions and College Point Improvement Fund
Payments) payable hereunder in an amount equal to the
Plans and Specifications Offset Amount for each day
during the period commencing on the day immediately
following the expiration of such ten (10) day period
and ending on the day on which Landlord advises the
Buildings Department and any applicable Reviewing
Party that such Plans and Specifications have been
approved.
(iii) In the event that Plans and
Specifications or modifications or resubmissions
thereof are deemed approved because an Arbiter
determines that Landlord has acted unreasonably in
withholding its approval thereof, and Landlord fails
to notify the Buildings Department and any applicable
Reviewing Party of such approval within ten (10) days
after the rendering of the Arbiter's decision to such
effect, then Tenant shall be entitled to an offset
against future installments of Rental (excluding
Impositions and College Point Improvement Fund
Payments) payable hereunder in an amount equal to the
Plans and Specifications Offset Amount for each day
during the period commencing on the day Tenant gives a
Dispute Notice in connection with Landlord's
-138-
<PAGE>
withholding of approval and ending on the day on which
Landlord notifies the Buildings Department and any
applicable Reviewing Party that such Plans and
Specifications or modifications or resubmissions
thereof have been approved.
Section 13.02. Subsequent Construction Work. If any
Subsequent Construction Work involves work that would affect
the Reviewable Features, Tenant shall submit to Landlord at
least twenty (20) days before commencement of such Subsequent
Construction Work all of the plans and specifications for the
proposed Subsequent Construction Work, in reasonable detail
(all aspects of such plans and specifications which describe,
involve or may affect in any way Reviewable Features shall be
subject to review and approval or disapproval by Landlord in
accordance with the provisions of Section 13.01(d) as a
modification of the approved Plans and Specifications and
deemed approved if Landlord does not disapprove such Plans and
Specifications within fifteen (15) days after their submission
to Landlord). If any Subsequent Construction Work involves an
expansion of the foundation, Tenant shall also submit a letter
from the Architect or Engineer of Record with respect to such
expansion substantially similar to the letter required by the
second sentence of Section 13.01(c) hereof;
Section 13.03. [Intentionally Omitted].
-139-
<PAGE>
Section 13.04. Supervision of Architect. All
Construction Work in connection with the Construction of the
Project shall be carried out under the supervision of an
Architect.
Section 13.05. Conditions Precedent to Tenant's
Commencement of All Construction Work.
(a) Permits and Insurance. Tenant shall not
commence any Construction Work unless (i) Tenant shall have
obtained and delivered to Landlord copies of all necessary
permits, consents, certificates and approvals of Governmental
Authorities, and (ii) Tenant shall have delivered to Landlord
copies, certificates or memoranda of the policies of insurance
required to be carried pursuant to the provisions of Article 7.
(b) Cooperation of Landlord in Obtaining Permits and
Granting Easements. Landlord shall cooperate with Tenant in
obtaining the permits, consents, certificates and approvals
required by Section 13.05(a) and shall grant any necessary
easements (subject to Tenant's obligation to grant or join in
the granting of any such easements as the result of the
leasehold interest conveyed to Tenant by this Lease),
including, without limitation, utility and sewer easements and
shall not unreasonably withhold or delay its signature on any
application made by Tenant required to obtain such permits,
consents, certificates, approvals and easements. Tenant shall
reimburse Landlord within ten (10) days after Landlord's demand
-140-
<PAGE>
for any third-party out-of-pocket cost or expense incurred by
Landlord in obtaining or granting the permits, consents,
certificates and approvals required by Section 13.05(a) and any
necessary easements; provided that Landlord shall have given
Tenant reasonable advance notice of the need to incur such
third-party out-of-pocket costs and an opportunity to amend
Tenant's request to avoid the need for such third-party,
out-of-pocket costs.
(c) Approval of Plans and Specifications. Tenant
shall neither (i) commence Construction of the Project unless
and until Landlord shall have approved (or been deemed to have
approved) the Plans and Specifications as required above, nor
(ii) if applicable to the Subsequent Construction Work being
performed, commence any Subsequent Construction Work, unless
and until Landlord shall have reviewed and, if required
pursuant to the specific provisions of this Lease, approved (or
been deemed to have approved) the proposed plans and
specifications in the manner provided herein.
Section 13.06 Completion of Construction Work. Upon
substantial completion of any Construction Work the plans and
specifications for which were required to be approved by
Landlord, Tenant shall furnish Landlord with (a) a
certification of the Architect that it has examined the
applicable plans and specifications and that, in its
professional judgment, after diligent inquiry, to its actual
-141-
<PAGE>
knowledge and belief, the Construction Work has been
substantially completed in accordance with the plans and
specifications applicable thereto, (b) a copy or copies of all
Certificate(s) of Occupancy for the Improvements issued by the
Buildings Department in Tenant's possession, and (c) a complete
set of "as built" plans and a survey showing the Improvements
or, if "as built" plans are not available, a complete set of
the Plans and Specifications with all addenda thereto and
changes in respect thereof, marked to show all additions,
deletions, changes and selections made during the course of
Construction Work. Tenant's agreement with the Architect shall
provide that Landlord shall have a license to use such "as
built" plans (or submission in lieu thereof as provided
herein), subject to any commercially reasonable reservations or
restrictions reserved by the Architect including, without
limitation, copyright and similar rights of the Architect to
prohibit use of designs for purposes unrelated to the
Improvements, as such rights exist in law or may appear in the
Architect's contract, as well as payment of any moneys that are
owed to the Architect with respect to the Project.
Section 13.07. Title to the Improvements and
Materials. Title to the Improvements (including without
limitation the Project) shall be and vest in Landlord.
Materials to be incorporated in the Project, shall, effective
upon their purchase and at all times thereafter, constitute the
-142-
<PAGE>
property of Landlord, and upon Construction of the Project or
any Construction Work, or the incorporation of such materials
therein, title thereto shall be and continue in Landlord
subject to this Lease. However, (a) Landlord shall not be
liable in any manner for payment or otherwise to any
contractor, subcontractor, laborer or supplier of materials in
connection with the purchase of any such materials, and (b)
Landlord shall have no obligation to pay any compensation to
Tenant by reason of its acquisition of title to the materials,
and (c) under no circumstances shall title to any Tenant's
Property vest in Landlord.
Section 13.08. [Intentionally Omitted].
Section 13.09. Construction Agreements.
(a) Required Clauses. All Construction
Agreements shall include the following provisions:
(i) "["Contractor"] ["Subcontractor"]
["Materialman"] hereby agrees that
immediately upon the purchase from
["contractor"] ["subcontractor"]
["materialman"] of any building materials to
be incorporated in the Project (as defined
in the lease pursuant to which the contract
purchaser hereunder acquired a leasehold
interest in the property (the "Lease")),
such materials shall become the sole
-143-
<PAGE>
property of the City of New York,
notwithstanding that such materials have not
been incorporated in, or made a part of,
such Project at the time of such purchase;
provided, however, that neither EDC (as
defined in the Lease) nor the City of New
York shall be liable in any manner for
payment or otherwise to ["contractor"]
["subcontractor"] ["materialman"] by reason
of such materials becoming the sole property
of the City of New York."
(ii) "["Contractor"] ["Subcontractor"]
["Materialman"] hereby agrees that
notwithstanding that ["contractor"]
["subcontractor"] ["materialman"] performed
work at the Premises (as such term is
defined in the Lease) or any part thereof,
neither EDC (as defined in the Lease) nor
the City of New York shall be liable in any
manner for payment or otherwise to
["contractor"] ["subcontractor"]
["materialman"] in connection with the work
performed at the Premises.
(iii) "The City of New York and EDC (as defined in
the Lease) are not parties to this
-144-
<PAGE>
["agreement"] ["contract"] and will not be
responsible to any party for any claims of
any nature whatsoever arising or which may
arise from such ["contract"] ["agreement"]."
(b) Definition.
"Construction Agreement(s)" means a written
agreement to do any Construction Work.
Section 13.10. Consent for Demolition. Tenant shall
have the right to demolish any Improvements during the Term
without the consent of Landlord, provided that such demolition
will not permanently (subject to the provisions hereof
regarding Abandonment of the Project) restrict the use of the
remaining Improvements as at least a Minimum Printing Facility,
or a smaller Printing Facility that has substantially the same
or greater capacity with respect to the printing, production
and distribution of newspapers, magazines, and other
periodicals or printed materials as the Minimum Printing
Facility. Tenant's violation of this Section l3.l0 shall
constitute an Abandonment of the Project pursuant to
subparagraph (e) of the definition of Abandonment of the
Project, but shall not constitute a default under this Lease.
-145-
<PAGE>
ARTICLE 14
REPAIRS, MAINTENANCE, ETC.
Section 14.01. Maintenance of the Premises, Etc.
Tenant shall take good care of the Premises, adjacent sidewalks
and curbs, and water, sewer and gas connections, and shall keep
and maintain the same in good condition, all at Tenant's sole
cost and expense. Tenant shall also comply with the
landscaping requirements of the Urban Renewal Plan.
Section 14.02. [Intentionally Omitted].
Section 14.03. Free of Dirt, Snow, Etc. Tenant, at
its sole cost and expense, shall keep clean and free from dirt,
snow, ice, rubbish, obstructions and encumbrances the sidewalks
and all other areas and spaces located in front of, or
adjacent to, the Premises for which Tenant would be so
responsible by law if it were the fee owner of the Premises.
Section 14.04. No Obligation of Landlord To Repair or
to Supply Utilities. Subject to the provisions of Article 27
hereof, Landlord shall not be required (except to the extent,
if any, that the City in its governmental capacity, may be
legally required) to supply any facilities, services or
utilities whatsoever to the Premises and shall not have any
duty or obligation to make any alteration, change, improvement,
replacement, Restoration or repair to the Improvements, and
-146-
<PAGE>
Tenant assumes the full and sole responsibility for the
condition, operation, alteration, change, improvement,
replacement, Restoration, repair, maintenance and management of
the Premises.
-147-
<PAGE>
ARTICLE 15
CAPITAL IMPROVEMENTS
Section 15.01. Capital Improvements.
(a) Tenant's Right to Make Capital
Improvements. Effective upon Substantial Completion of the
Project, Tenant shall have the right to make Capital
Improvements; provided that Tenant shall comply with the
applicable provisions of Article 13 and Article 16.
(b) Definition.
"Capital Improvement" means a change, alteration,
or addition to or replacement of the Improvements, other than
Construction of the Project or a Restoration.
-148-
<PAGE>
ARTICLE 16
REQUIREMENTS OF GOVERNMENTAL AUTHORITIES
Section 16.01. Requirements.
(a) Obligation to Comply. In connection with
any Construction Work, and with the maintenance, management,
use and operation of the Premises and Tenant's performance of
its obligations hereunder, Tenant shall, subject to the
provisions of Section 35.03, comply or take all appropriate
measures to attempt to comply with all Requirements. No
consent to, approval of, or acquiescence in any plans or
actions of Tenant by Landlord, if any, shall be relied upon or
construed as being a determination that such are in compliance
with the Requirements, or in the case of construction plans, a
determination that such are structurally, architecturally or by
any other standard technically correct; provided that,
notwithstanding anything to the contrary contained herein, any
plans and specifications approved by EDC shall be deemed to
comply with the Urban Renewal Plan.
(b) Definition.
"Requirements" means:
(i) any and all laws, rules, regulations,
orders, ordinances, statutes, codes, executive orders
and requirements of all Governmental Authorities
(currently in force or hereafter adopted) applicable
to the Premises or any street, road, avenue or
-149-
<PAGE>
sidewalk comprising a part of the Premises, or
adjacent to the Premises to the extent the owner of
the Premises would have legal responsibility therefor
(including, without limitation, the City Zoning
Resolution, the Building Code of New York City and the
laws, rules, regulations, orders, ordinances,
statutes, codes and requirements of any applicable
Fire Rating Bureau or other body exercising similar
functions) and the Urban Renewal Plan; and
(ii) the Certificate(s) of Occupancy issued
for the Project as then in force.
-150-
<PAGE>
ARTICLE 17
DISCHARGE OF LIENS; BONDS
Section 17.01. Creation of Liens. Subject to the
provisions of Article 11, Section 13.05(b) and Section 17.02
hereof, Tenant shall not create, cause to be created, or suffer
or permit to remain, a lien, encumbrance or charge upon this
Lease, the leasehold estate created hereby, the income
therefrom or the Premises or any part thereof other than as
specifically permitted by this Lease, unless such liens,
encumbrances or charges are subordinate to the interest of
Landlord in the Premises. The loss by Tenant of its interest
in this Lease through the foreclosure of any such subordinate
lien, encumbrance or charge shall constitute an Event of
Default, subject, however, to the provisions of Article 11.
Section 17.02. Discharge of Liens. If any mechanic's,
laborer's, vendor's or materialman's lien is filed against the
Premises or any part thereof and the aggregate amount of such
liens exceeds $500,000, or if any public improvement lien
created, or caused or suffered to be created by Tenant shall
be filed against any assets of, or funds appropriated to,
Landlord, Tenant shall, within thirty (30) days after receiving
notice of the filing of such mechanic's, laborer's, vendor's,
materialman's or similar statutory lien or public improvement
lien, cause it to be vacated or discharged of record by
payment, deposit, bond, order of a court of competent
-151-
<PAGE>
jurisdiction or otherwise. However, Tenant shall not be
required to discharge any such lien if Tenant shall have (a)
furnished Landlord with a cash deposit, bond, personal guaranty
or other security reasonably satisfactory to Landlord, in an
amount sufficient to pay the lien with interest and penalties
and (b) brought an appropriate proceeding to discharge such
lien and is prosecuting such proceeding with diligence and
continuity; except that if despite Tenant's efforts to seek
discharge of the lien Landlord reasonably believes such lien is
about to be foreclosed and so notifies Tenant, Tenant shall
within five (5) Business Days after receipt of such notice,
commence to take appropriate steps to cause such lien to be
discharged of record or Landlord may use the security furnished
by Tenant in order to so discharge the lien.
-152-
<PAGE>
ARTICLE 18
REPRESENTATIONS
Section 18.01. Landlord's Representations and
Warranties. Landlord hereby warrants and represents that:
(a) Landlord has good, insurable and marketable
title to the Premises, free and clear of all liens and
encumbrances except the Permitted Encumbrances.
(b) Except for this Lease, there are no leases
or occupancy agreements affecting the Premises.
(c) There are no service, maintenance, supply or
management agreements affecting the Premises as of the date
hereof entered into by Landlord or any predecessor-in-interest
of Landlord, except for the appointment of EDC as Lease
Administrator pursuant to Article 42 hereof.
(d) Landlord has no employees engaged in work at
the Premises, except for employees of the New York City Police
Department, who will be present on Parcel C as more
particularly described in and pursuant to the terms of Section
2.02 hereof for the period expiring on the day immediately
preceding the Possessory Date.
(e) There are no taxes, assessments (including
assessments which may be paid in installments), College Point
Improvement Fund Payments, payments to any Business Improvement
District or any other amounts whatsoever which are due and
payable or which are to become due and payable or a lien, or
-153-
<PAGE>
both, on the Premises with respect to any period of time prior
to the Lease Execution Date.
(f) Landlord has no knowledge of any pending or
threatened condemnation or similar proceeding affecting the
Premises or any portion thereof, or pending public improvements
in or adjoining the Premises which will adversely affect the
Premises; provided, however, that Landlord shall notify Tenant
of any such proceeding that it has knowledge of, without regard
to whether such proceeding might have an adverse effect on the
Premises.
(g) Landlord has no knowledge of any pending or
threatened legal action of any kind or character whatsoever
affecting Landlord or the Premises which will adversely affect
the Premises upon or subsequent to the Lease Execution Date.
(h) Each person executing and delivering this
Lease and all documents to be executed and delivered on behalf
of Landlord in regard to the consummation of the transaction
which is the subject of this Lease represents to Tenant that he
or she has due and proper authority to execute and deliver
same. Landlord has the full right, power and authority to sell
and convey or lease the Premises to Tenant as provided in this
Lease and to carry out its obligations set forth in this
Lease. The consummation by Landlord of the transaction which
is the subject of this Lease will not conflict with or result
in a breach of any of the terms of any agreement or instrument
-154-
<PAGE>
to which Landlord is a party or by which Landlord is bound or
constitute a default thereunder, and Landlord has obtained any
and all required authorizations and approvals of the execution
and delivery of this Lease, the transaction which is the
subject of this Lease, and all documents referred to in this
Lease. No other party has any right to purchase or lease the
Premises, or any part thereof.
(i) No representation or warranty by Landlord in
this Lease knowingly omits a material fact necessary to make
any representation or warranty not misleading.
(j) Landlord has not done or suffered anything
whereby the Premises has been transferred or encumbered in any
way whatsoever except for the Permitted Encumbrances.
(k) No air or development rights with respect to
the Premises have been transferred or sold, and no contract to
sell such air or development rights is outstanding, other than
this Lease.
Section 18.02. Tenant's Acknowledgment of No Other
Representations. Tenant acknowledges, represents and confirms
that it or its authorized representative has visited the
Premises and is fully familiar with the physical condition
thereof on the Lease Execution Date. Tenant confirms that:
(a) except for the Car Pound and any Hazardous
Substances that may be on or under the Land, as more
specifically set forth in Section 43.19 hereof, the Premises in
-155-
<PAGE>
their condition and state of repair on the Lease Execution Date
are acceptable;
(b) except as specifically set forth in this
Lease, no representations, statements, or warranties, express
or implied, have been made by, or on behalf of, Landlord or EDC
(and Tenant has not relied on any such representations,
statements or warranties) with respect to the Premises or the
transactions contemplated by this Lease, the physical condition
thereof, the zoning or other laws, regulations, rules and
orders applicable thereto or the use that may be made of the
Premises,; and
(c) Landlord shall not be liable in any event
whatsoever for any latent or patent defects in the Premises
existing on the Lease Execution Date , except for the presence
of Hazardous Substances, to the extent set forth in Section
43.19 hereof.
Section 18.03. No Payments. Tenant warrants and
represents that no officer, agent, employee or representative
of The City of New York or EDC has received for its own benefit
any payment or other consideration from Tenant for the making
of this Lease and that no officer, agent, employee or
representative of The City of New York or EDC has any interest,
directly or indirectly, in Tenant's interest in this Lease.
-156-
<PAGE>
ARTICLE 19
LANDLORD NOT LIABLE FOR INJURY OR DAMAGE, ETC.
Section 19.01. Landlord not Liable for Injury or
Damage, Etc.
(a) Neither Landlord (in its capacity as
Landlord as opposed to its municipal capacity) nor Lease
Administrator shall be liable for any injury or damage to
Tenant or to any Person happening on, in or about the Premises
or its appurtenances, nor shall they be liable for any injury
or damage to the Premises or to any property belonging to
Tenant or to any other Person that may be caused by fire, by
breakage, or by the use, misuse or abuse of any portion of the
Premises (including, but not limited to, any of the common
areas within the Improvements, hatches, openings,
installations, stairways or hallways or other common
facilities, and the streets or sidewalk areas within or
adjacent to the Premises) or that may arise from any other
cause whatsoever, unless caused by Landlord or Lease
Administrator or their members', agents', employees' or
contractors' negligence, misconduct or tortious acts.
(b) Neither Landlord (in its capacity as
Landlord as opposed to its municipal capacity) nor Lease
Administrator shall be liable to Tenant or to any Person for
(i) any failure of water supply, gas or
electric current,
-157-
<PAGE>
(ii) any injury or damage to any property of
Tenant or of any Person or to the Premises caused by
or resulting from gasoline, oil, steam, gas,
electricity, or hurricane, tornado, flood, wind or
similar storm or disturbance or by or from water, rain
or snow which may leak or flow from the street, sewer,
gas mains or subsurface area or from any part of the
Premises or by or from leakage of gasoline or oil from
pipes, appliances, sewer or plumbing works therein or
from any other place, or
(iii) any interference with light or other
incorporeal hereditaments by any Person, or caused by
any public or quasi-public work,
unless, and only to the extent of the proportion by which,
caused by Landlord's or Lease Administrator's, or their
agents', employees' or contractors' negligence, misconduct or
tortious acts.
Section 19.02. Waiver of Claims. Notwithstanding
anything to the contrary contained herein, Tenant hereby
releases Landlord with respect to any claim (including a claim
for negligence) which Tenant might otherwise have against
Landlord for loss, damage or destruction with respect to its
property occurring during the Term, but only to the extent to
which Tenant is, or is required to be, insured under a policy
or policies containing a waiver of subrogation as provided in
Section 7.02(b) hereof.
-158-
<PAGE>
ARTICLE 20
INDEMNIFICATION OF LANDLORD AND OTHERS
Section 20.01. Tenant's Obligation to Indemnify. From
and after the Possessory Date, Tenant shall indemnify and save
Landlord and Lease Administrator and their respective members,
officers, directors, employees, agents and servants
(collectively, the "Landlord Indemnitees") harmless from and
against any and all liabilities, suits, obligations, fines,
damages, penalties, claims, costs, charges and expenses,
including, without limitation, reasonable architects' and
attorneys' fees and disbursements, that may be imposed upon or
incurred by or asserted against any of the Landlord Indemnitees
by reason of any of the following, except that no Landlord
Indemnitee shall be so indemnified and saved harmless to the
extent of the portion by which such liabilities, etc. are
caused by the negligence, misconduct or tortious acts of any
Landlord Indemnitee:
(a) Construction Work. Construction work or any
other work or act done in, on, or about the Premises or any
part thereof;
(b) Ownership. The ownership or use, non-use,
possession, occupation, alteration, condition, operation,
maintenance or management of the Premises, adjacent sidewalks
and curbs, or water, sewer and gas connections;
(c) Acts or Failure to Act of Tenant/Subtenant.
Any act or failure to act on the part of Tenant or any
-159-
<PAGE>
Subtenant or any of its or their respective partners, officers,
shareholders, directors, agents, contractors, servants,
employees, or licensees with respect to the Premises, adjacent
sidewalks and curbs, or water, sewer and gas connections;
(d) Accidents, Injury to Person or Property.
Any accident, injury (including death at any time resulting
therefrom) or damage to any Person or property occurring in,
on, or about the Premises; or
(e) Default of Tenant. Any failure on the part
of Tenant to pay Rental or keep, observe and perform any of the
other terms, covenants, agreements, provisions, conditions or
limitations contained in this Lease.
Section 20.01A. Landlord's Obligation to Indemnify.
Landlord shall indemnify and save Tenant and Tenant's
Affiliates and their respective officers, directors, employees,
agents and servants (collectively, the "Tenant Indemnitees")
harmless from and against any and all liabilities, suits,
obligations, fines, damages, penalties, claims, costs, charges
and expenses, including without limitation, reasonable
architects' and attorneys' fees and disbursements, that may be
imposed upon or incurred by or asserted against any of the
Tenant Indemnitees in connection with the Premises, adjacent
sidewalks and curbs, or water, sewer and gas connections, by
reason of the negligence, misconduct or tortious acts of
Landlord or Lease Administrator or their respective partners,
-160-
<PAGE>
members, officers, shareholders, directors, employees, agents,
contractors or servants, except that no Tenant Indemnitee shall
be so indemnified and saved harmless to the extent of the
portion by which such liabilities, etc. are caused by the
negligence, misconduct or tortious acts of any Tenant
Indemnitee.
Section 20.02. Contractual Liability. The
obligations of Tenant and Landlord under this Article shall not
be affected in any way by the absence of insurance coverage, or
by the failure or refusal of any insurance carrier to perform
an obligation on its part under insurance policies affecting
the Premises.
Section 20.03. Defense of Claim, Etc. If any claim,
action or proceeding is made or brought against any of the
Landlord Indemnitees or the Tenant Indemnitees by reason of any
event to which reference is made in Sections 20.01 or 20.01A,
then, upon demand by Landlord or Tenant, as the case may be,
the other shall either resist, defend or satisfy such claim,
action or proceeding in such Landlord or Tenant Indemnitee's
name, by the attorneys for, or approved by, Landlord or
Tenant's insurance carrier, as the case may be (if such claim,
action or proceeding is covered by insurance) or by such other
attorneys as the indemnifying party shall select (subject to
the approval of Landlord or Tenant, as the case may be, which
approval shall not unreasonably be withheld or delayed);
-161-
<PAGE>
provided that the indemnifying party shall not be liable for
any settlement agreed to by any Landlord or Tenant Indemnitee
unless such settlement is approved in writing by the
indemnifying party, which approval shall not unreasonably be
withheld or delayed. The foregoing notwithstanding, such
Landlord or Tenant Indemnitee may at its own cost and expense
engage its own attorneys to defend such Landlord or Tenant
Indemnitee, or to assist such Landlord or Tenant Indemnitee in
such Landlord or Tenant Indemnitee's defense of such claim,
action or proceeding, as the case may be; provided, that
(i) such attorneys shall be subject to the approval of the
indemnifying party, which approval shall not unreasonably be
withheld or delayed (provided, however, that the approval of
the indemnifying party shall not be required with respect to
the engagement of an attorney in a strictly advisory capacity,
with no right to file an appearance, participate in
depositions, file legal papers or otherwise take an active role
in the defense) and (ii) such Landlord or Tenant's Indemnitee
shall be deemed to have waived its right to be indemnified
pursuant to the provisions of this Lease if and to the extent
that it engages its own attorneys to defend or assist in the
defense of such Landlord or Tenant Indemnitee after it has
received written notice from the indemnifying party that either
(x) the indemnifying party does not approve such attorneys or
(y) the engagement of such attorneys shall void or adversely
affect the insurance coverage of such indemnifying party.
-162-
<PAGE>
Section 20.04. Notice. In case any action or
proceeding be brought against any Landlord or Tenant Indemnitee
for which such Landlord or Tenant Indemnitee claims
indemnification from Tenant or Landlord, as the case may be,
pursuant to the terms of this Article 20, Landlord or Tenant,
as the case may be, shall give prompt written notice thereof to
the indemnifying party.
Section 20.05. Survival Clause. The provisions of
this Article shall survive the Expiration Date.
-163-
<PAGE>
ARTICLE 21
PURCHASE OPTION
Section 21.01. Purchase Option.
(a) Option. Subject to the terms and conditions
hereof, Tenant shall have the right to purchase, or to select
a designee to purchase, the Premises and all personal property
thereon belonging to Landlord (together, the "Property") at any
time after Substantial Completion of Construction of the
Initial Improvements and on or prior to the Expiration Date,
for a purchase price of six million, nine hundred thousand
dollars ($6,900,000) (the "Basic Purchase Price") as such
purchase price may be adjusted pursuant to any provision of
this Lease or the Purchase Agreement (as finally adjusted, the
"Purchase Price").
(b) Exercise of Option. Tenant may exercise its
option to purchase the Property by delivering a notice of such
election to Landlord (the "Purchase Notice"). The Purchase
Notice shall include the designation of a closing date (the
"Closing Date") for the purchase, which shall be a business
day not less than forty-five (45) nor more than one hundred
eighty (180) days after the date of the Purchase Notice.
(c) Notice of Failure to Exercise. In the event
that Tenant shall not have delivered the Purchase Notice (or a
notice that Tenant does not intend to exercise its option to
purchase the Property) on or before the date that is
-164-
<PAGE>
ninety (90) days prior to the expiration of the Term, Landlord
shall deliver a notice to Tenant advising Tenant that Tenant
has failed to exercise its option to purchase the Property and
that such option shall be forfeited if not exercised by the
date that is forty-five (45) days after the date of such notice
(the "Failure to Exercise Notice"). In the event that Landlord
fails to deliver the Failure to Exercise Notice by the date
that is ninety (90) days prior to the expiration of the Term,
the Term shall be automatically extended to the date that is
ninety (90) days after the date of the Failure to Exercise
Notice.
(d) Agreement of Sale and Purchase. Promptly
after delivering the Purchase Notice, Tenant shall deliver to
Landlord four (4) duplicate originals of the Agreement of Sale
and Purchase (the "Purchase Agreement") substantially in the
form annexed hereto as Exhibit K, executed by Tenant or
Tenant's designee. Tenant shall only make such changes to
Exhibit K hereto as may be necessary to (i) insert the parties
to the Purchase Agreement, (ii) modify the Purchase Price, if
and to the extent required by any provision of this Lease,
(iii) designate the Closing Date, (iv) designate the Title
Company, (v) complete any items left blank in Exhibit K,
(vi) indicate whether Tenant or Tenant's designee elects to
take an assignment of the Lease, (vii) provide for compliance
with any applicable future laws, rules or regulations
-165-
<PAGE>
including, without limitation, those relating to the filing or
submission of tax forms or returns and time periods in
connection therewith, (viii) provide any provisions necessary
to enable Tenant or Tenant's designee to obtain title insurance
from the Title Company at prevailing rates, without excess
premium and (ix) include any provisions mutually agreed upon by
Landlord and Tenant. The Purchase Agreement shall be deemed
executed and delivered by Landlord, as Seller, upon delivery to
Landlord of such executed originals thereof; provided, however,
that Landlord hereby agrees to execute, as Seller, and deliver
to Tenant or Tenant's designee two (2) duplicate originals of
the Purchase Agreement within ten (10) Business Days following
delivery of the Purchase Agreement to Landlord as confirmation
of such deemed execution and delivery. Landlord hereby agrees
that if Landlord fails to execute and deliver to Tenant or
Tenant's designee two (2) fully-executed duplicate originals of
the Purchase Agreement within such ten (10) Business Day
period, then Landlord hereby irrevocably constitutes and
appoints Tenant as Landlord's attorney-in-fact, coupled with an
interest, to execute and deliver the Purchase Agreement to
Tenant; provided however, that notwithstanding such execution
and delivery by Tenant acting as Landlord's attorney-in-fact,
until Landlord, acting on its own behalf, executes and delivers
two (2) fully-executed duplicate originals of the Purchase
Agreement to Tenant or Tenant's designee, Tenant shall have the
-166-
<PAGE>
right, but not the obligation, to obtain a mandatory injunction
from a court of competent jurisdiction directing Landlord to
execute, as Seller, and deliver to Tenant or Tenant's designee
two (2) fully-executed duplicate originals of the Purchase
Agreement; provided, however, that nothing contained herein
shall be deemed to require the issuance of any such mandatory
injunction or the execution and delivery by Landlord of the
Purchase Agreement as a precondition to making the Purchase
Agreement binding upon Landlord.
Section 21.02. Default under Purchase Agreement;
Extension of Term.
(a) Purchaser's Default. In the event that the
purchase of the Property pursuant to the Purchase Agreement is
not consummated because of the Purchaser's default thereunder,
Seller's sole remedy shall be the remedy set forth in
Section 14.2 of the Purchase Agreement and, notwithstanding
such default, this Lease shall remain in full force and effect
upon all of its terms and conditions until the expiration of
the Term, except that Tenant shall have no further option to
purchase the Property pursuant to this Article 21.
(b) Seller's Default. In the event that the
purchase of the Property pursuant to the Purchase Agreement is
not consummated because of the Seller's default thereunder or
because of Landlord's failure to execute and deliver the
Purchase Agreement, then, in addition to all of the Purchaser's
-167-
<PAGE>
rights and remedies under the Purchase Agreement: (i) for the
period (the "First Year Abatement Period") commencing on the
date (the "Purchase Default Date") which is the earlier to
occur of (x) the eleventh (11th) day following the giving of
the Purchase Notice if Landlord has failed to execute and
deliver the Purchase Agreement or (y) the date that Seller
defaults under the Purchase Agreement, and ending on the
earlier to occur or (1) the date that Tenant or Tenant's
designee obtains title to the Property pursuant to the
provisions of the Purchase Agreement or (2) the day immediately
preceding the first anniversary of the Purchase Default Date,
all Base Rent coming due under this Lease shall be abated in
its entirety; (ii) Land PILOT and Improvements PILOT payable
during the First Year Abatement Period shall be payable in
arrears in quarterly installments equal to the last amount of
such quarterly installments paid immediately prior to the
Purchase Default Date; (iii) for the period (the "Remaining
Abatement Period") commencing on the first anniversary of the
Purchase Default Date and ending on the date that Tenant or
Tenant's designee obtains title to the Property pursuant to the
provisions of the Purchase Agreement, all Base Rent, Land PILOT
and Improvements PILOT coming due under this Lease shall be
abated in their entirety; (iv) in the event that Tenant or
Tenant's designee has not obtained title to the Property
pursuant to the provisions of the Purchase Agreement prior to
-168-
<PAGE>
the scheduled expiration of the Term, this Lease shall
automatically be extended for an additional term, not to exceed
ninety-nine (99) years, which shall expire and come to an end
on the earlier to occur of (x) the date on which Tenant or
Tenant's designee obtains title to the Property pursuant to the
provisions of the Purchase Agreement or (y) the date specified
by Tenant in a notice to Landlord electing to terminate such
extended Term, such extended Term to be upon all of the terms
and conditions set forth in this Lease, except that Rental
payable hereunder shall be abated in accordance with the
provisions of this Section 21.02(b) and Landlord shall be
responsible for any and all taxes, fees or charges of any
nature whatsoever in connection with such extension of the
Term, including, without limitation, any and all transfer or
gains taxes, regardless of whether such taxes, charges or fees
would customarily be the responsibility of the lessor or the
lessee, (v) Landlord hereby irrevocably constitutes and
appoints Tenant as Landlord's attorney-in-fact, coupled with an
interest, to take any and all steps on behalf of Landlord, all
at Landlord's sole cost and expense, that may be necessary to
consummate the sale of the Property to Tenant or Tenant's
designee pursuant to the terms of the Purchase Agreement
including, without limitation, the execution of the Deed
annexed to the Purchase Agreement as Exhibit G and (vi) Tenant
shall have the right to obtain a mandatory injunction from a
-169-
<PAGE>
court of competent jurisdiction directing Landlord to take any
and all steps that may be necessary to consummate the sale of
the Property to Tenant or Tenant's designee pursuant to the
provisions of the Purchase Agreement.
(c) Extension of Term. In the event that Tenant
exercises its option to purchase the Property pursuant to the
provisions of this Article 21 and the Closing (as that term is
defined in the Purchase Agreement) does not take place prior to
the originally scheduled date for the expiration of the Term
for any reason other than the breach by Landlord of its
obligations pursuant to Sections 21.01(d) or 21.02(b) hereof
(in which event the provisions of Sections 21.01(d) or
21.02(b), respectively, shall govern), the Term shall
automatically be extended to the date that is the earlier to
occur of (i) the date on which the Closing occurs and (ii) the
date on which the Purchase Agreement is terminated due to the
default of the Purchaser thereunder; provided, however, that if
the Term shall be so extended pursuant to the provisions of
this Section 21.02(c) and Landlord shall thereafter breach its
obligations pursuant to Sections 21.01(d) or 21.02(b) hereof,
then all of the provisions of Sections 21.01(d) or 21.02(b),
respectively, shall immediately go into effect including,
without limitation, the provisions thereof providing for the
abatement of Rental.
-170-
<PAGE>
Section 21.03. Condemnation. In the event that
Tenant or Tenant's designee elects to terminate the Purchase
Agreement pursuant to Section 12.2 thereof, then (i) this Lease
shall remain in full force and effect upon all of its terms and
conditions until the expiration of the Term and
(ii) notwithstanding such election to terminate the Purchase
Agreement, Tenant's option to purchase the Property shall be
reinstated and remain in full force and effect for the duration
of the Term upon all of the terms and conditions of this
Article 21.
Section 21.04. Right to Terminate. In the event that
the Term shall be extended pursuant to the provisions of
Sections 21.02(b) hereof, Tenant shall have the right, to be
exercised in Tenant's sole discretion by written notice to
Landlord, to terminate the Term of this Lease (as so extended)
as of a date to be set forth in such written notice, in which
event (i) all of Tenant's obligations under this Lease shall
terminate as of the termination date set forth in such notice
and (ii) except with respect to Tenant's right to extend the
Term with an abatement of Rental pursuant to the provisions of
Section 21.02(b), Landlord's liability to Tenant for its breach
of the provisions of Section 21.02(b) shall not be diminished
in any manner whatsoever.
-171-
<PAGE>
ARTICLE 22
LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
Section 22.01. Landlord's Right to Perform. If an
Event of Default shall occur, and the failure to cure such
Event of Default would subject Landlord to a monetary loss or
civil or criminal suit, Landlord may, but shall be under no
obligation to, perform the obligation the breach of which gave
rise to such Event of Default, without waiving or releasing
Tenant from any of its obligations contained in this Lease,
provided that Landlord shall exercise such right only after
five (5) days' prior written notice to Tenant, provided that no
such notice shall be required in the event of an emergency.
Section 22.02. Reimbursement of Amounts Paid. All
sums paid by Landlord, and all costs and expenses incurred by
Landlord in connection with the performance of any act pursuant
to Section 22. 01, together with interest thereon at the Late
Charge Rate from the respective dates of Landlord's making of
each such payment or incurring of each such sum, cost, expense,
charge, payment or deposit, to the respective dates on which
actual payment thereof is received by Landlord, in New York
Clearing House Association Funds or by wire transfer, shall
constitute Rental hereunder and shall be paid by Tenant to
Landlord on demand.
Section 22.03. Waiver, Release and Assumption of
Obligations. Any payment or performance by Landlord pursuant
-172-
<PAGE>
to the foregoing provisions of this Article 22 shall not be nor
be deemed to be (a) a waiver or release of the Default or Event
of Default of Tenant with respect thereto or (b) Landlord's
assumption of Tenant's obligations to pay or perform any of
Tenant's past, present or future obligations hereunder.
-173-
<PAGE>
ARTICLE 23
USE OF THE PREMISES
Section 23.01. Permitted Uses.
(a) Subject to the provisions of Article 28
hereof regarding Abandonment of the Premises and the
consequences thereof, Tenant shall have the right to use the
Premises for any lawful purpose permitted by the Urban Renewal
Plan.
Section 23.02. Prohibited Uses. Tenant shall not use
or occupy the Premises, or permit or suffer the Premises or any
part thereof to be used or occupied in violation of the
certificate(s) of occupancy for the Improvements or the Urban
Renewal Plan. Promptly after its discovery of any such use or
occupation in violation of the certificate(s) of occupancy for
the Improvements or the Urban Renewal Plan, Tenant shall take
all reasonably necessary steps to discontinue such use or
purpose.
-174-
<PAGE>
ARTICLE 24
EVENTS OF DEFAULT, CONDITIONAL
LIMITATIONS, REMEDIES, ETC.
Section 24.01. Definition. Subject to the provisions
of Article 11 hereof, each of the following events shall be an
"Event of Default" hereunder:
(a) if Tenant shall fail to make any payment (or
any part thereof) of Rental as due hereunder and such failure
shall continue for a period of twenty (20) days after Tenant's
receipt of notice thereof from Landlord;
(b) if Tenant shall fail to Commence
Construction of the Initial Improvements on or before the
Outside Commencement Date;
(c) if Tenant shall fail to Substantially
Complete the Construction of the Initial Improvements on or
before the Scheduled Completion Date and if such failure shall
continue for a period of thirty (30) days after notice (unless
such failure requires work to be performed, acts to be done or
conditions to be removed which cannot, by their nature,
reasonably be performed, done or removed within such thirty
(30) day period, in which case no Event of Default shall exist
as long as Tenant shall have (a) commenced curing the same
within the thirty (30) day period and (b) shall diligently and
continuously prosecute the same to completion within a
reasonable period);
-175-
<PAGE>
(d) if Tenant shall enter into (or permit to be
entered into) a Transfer or any other transaction without
compliance with any provisions of Article 10 of this Lease and
such Transfer or other transaction shall not be made to comply
with the provisions of this Lease or canceled within thirty
(30) days after Landlord's notice thereof to Tenant (unless
making such Transfer comply with the provisions of this Lease
or cancelling such Transfer requires acts to be done or
conditions to be removed which cannot, by their nature,
reasonably be performed, done or removed within such
thirty (30) day period, in which case no Event of Default shall
exist as long as Tenant shall (a) commence curing the same
within the thirty (30) day period and (b) diligently and
continuously prosecute the same to completion within a
reasonable period); or
(e) if Tenant shall fail to observe or perform
one or more of the other material terms, conditions, covenants
or agreements of this Lease and such failure shall continue for
a period of sixty (60) days (subject to Unavoidable Delays)
after Landlord's notice thereof to Tenant specifying in
reasonable detail such failure (unless such failure requires
work to be performed, acts to be done, or conditions to be
removed which cannot, by their nature, reasonably be performed,
done or removed within such sixty (60) day period, in which
case if Tenant shall commence curing the same within the sixty
-176-
<PAGE>
(60) day period, no Event of Default shall be deemed to exist
as long as Tenant shall be diligently and continuously
prosecuting the same to completion).
Section 24.02. Enforcement of Performance. Subject to
the provisions of Section 43.06(b), if an Event of Default
occurs, Landlord, at any time thereafter during the continuance
of the Default that gave rise to such Event of Default and the
expiration of at least ten (10) days after the giving of notice
to Tenant that Landlord intends to pursue its remedies under
this Section 24.02, may elect to proceed by appropriate
judicial proceedings, either at law or in equity, to enforce
performance or observance by Tenant of the applicable
provisions of this Lease and/or to recover damages for breach
thereof.
Section 24.03. Expiration and Termination of Lease.
(a)(i) If an Event of Default occurs pursuant
to Section 24.01(b) only and Landlord, at any time
thereafter during the continuance of Tenant's failure
to Commence Construction of the Initial Improvements,
gives Tenant notice stating that this Lease and the
Term shall terminate on the date specified in such
notice, which date shall not be less than twenty (20)
Business days after the receipt of the notice, then
this Lease and the Term and all rights of Tenant under
this Lease shall expire and terminate as if the date
-177-
<PAGE>
specified in the notice were the Expiration Date, and
Tenant shall quit and surrender the Premises
forthwith. If such termination is stayed by order of
any court having jurisdiction in any case, action or
proceeding, then following the expiration of any such
stay, or if the trustee appointed in any such case,
Tenant or Tenant as debtor-in-possession fails to
assume Tenant's obligations under this Lease within
the period prescribed therefor by law or within thirty
(30) days after entry of the order for relief or as
may be allowed by the court, or if the trustee, Tenant
or Tenant as debtor-in-possession fails to provide
adequate protection of Landlord's right, title and
interest in and to the Premises and adequate assurance
of the complete and continuous future performance of
Tenant's obligations under this Lease as provided in
Section 24.10, Landlord, to the extent permitted by
law or by leave of the court having jurisdiction over
such case, shall have the right, at its election, to
terminate this Lease on sixty (60) days notice to
Tenant, Tenant as debtor-in-possession or the
trustee. Upon the expiration of the sixty (60) day
period this Lease shall cease and Tenant, Tenant as
debtor-in-possession and/or the trustee immediately
shall quit and surrender the Premises.
-178-
<PAGE>
(ii) If an Event of Default occurs other
than pursuant to Section 24.01(b) hereof, at any time
thereafter during the continuance of the Default which
gave rise to such Event of Default and the expiration
of at least ten (10) days after the giving of notice
to Tenant that Landlord intends to pursue its remedies
under this Section 24.03(a)(ii), Landlord, in addition
to its rights under Section 24.02 hereof, may elect to
proceed by appropriate judicial proceedings to
terminate this Lease and dispossess Tenant, it being
the intent of the parties hereto that no Event of
Default other than an Event of Default pursuant to
Section 24.01(b) hereof shall be treated or construed
as a conditional limitation. Nothing contained herein
shall be deemed to constitute a waiver by Tenant of
any and all rights of redemption that may be available
to it at law or in equity.
(b) If this Lease is terminated as provided in
Section 24.03(a)(i), Landlord may dispossess Tenant by summary
proceedings or otherwise.
(c) If this Lease shall be terminated as
provided in Section 24.03(a), Tenant shall pay to Landlord all
Rental payable under this Lease by Tenant to Landlord up to the
date on which this Lease is so terminated and Tenant shall have
no liability whatsoever for any Rental (and no Rental shall
-179-
<PAGE>
accrue and become due) from and after such early date of
termination.
Section 24.04. Arbitration of Certain Defaults. In
the event that Tenant disagrees with Landlord's determination
that a Default or Event of Default of the nature described in
Section 24.01(b) or (c) has occurred and is continuing, Tenant,
at Tenant's sole election, shall have the right to submit to
binding arbitration the issue of whether such a Default or
Event of Default has occurred and is continuing. Tenant may
exercise its option to arbitrate the issue of whether such a
Default or Event of Default has occurred and is continuing by
notice given to Landlord prior to the institution of legal
proceedings by Landlord pursuant to Sections 24.02, 24.03 or
24.08 hereof. In the event that Tenant exercises its option to
arbitrate as set forth in this Section 24.04, the running of
the ten (10) day notice period set forth in Sections 24.02,
24.03 and 24.08 hereof or the twenty (20) Business Day period
set forth in Section 24.03(a)(i) hereof, as the case may be,
shall be tolled pending the outcome of such arbitration and
Landlord shall not institute judicial proceedings pursuant to
Sections 24.02, 24.03 or 24.08 hereof unless and until it is
determined by arbitration that a Default or Event of Default
has occurred and is continuing. Nothing contained herein shall
be construed to adversely affect Tenant's right to cure any
Default or Event of Default prior to the termination of this
-180-
<PAGE>
Lease by a court of competent jurisdiction or to constitute a
waiver of any right of redemption that Tenant may have at law
or in equity.
Section 24.05. Receipt of Moneys after Notice or
Termination. No receipt of moneys by Landlord from Tenant
after the termination of this Lease shall reinstate, continue
or extend the Term, or operate as a waiver of the right of
Landlord to enforce the payment of Rental payable by Tenant
hereunder, or operate as a waiver of the right of Landlord to
recover possession of the Premises by proper remedy. After a
final order or judgment for the possession of the Premises,
Landlord may demand, receive and collect any moneys due
hereunder without in any manner affecting the notice,
proceeding, order, suit or judgment, all such moneys collected
being deemed payments on account of the use and occupation of
the Premises or, at the election of Landlord, on account of
Tenant's liability hereunder.
Section 24.06. Exercise of Purchase Option.
Notwithstanding anything to the contrary contained in this
Lease, Landlord shall not institute any proceedings to
terminate this Lease and any such proceedings theretofore
instituted shall be stayed, in the event that Tenant delivers
the Purchase Notice and purchases the Premises, each in
accordance with the provisions of Article 21 hereof.
-181-
<PAGE>
Section 24.07. Strict Performance. No failure by one
party hereto to insist upon the other party's strict
performance of any covenant, agreement, term or condition of
this Lease or to exercise any right or remedy available to such
party pursuant to the terms hereof, and no payment or
acceptance of full or partial Rental during the continuance of
any Default or Event of Default, shall constitute a waiver of
any such Default or Event of Default or of the right to strict
performance of such covenant, agreement, term or condition. No
covenant, agreement, term or condition of this Lease to be
performed or complied with by either party, and no Default or
Event of Default shall be waived, altered or modified except by
a written instrument executed by the other party. No waiver of
any Default or Event of Default shall affect or alter this
Lease, but each and every covenant, agreement, term and
condition of this Lease shall continue in full force and effect
with respect to any other then existing or subsequent Default.
Section 24.08. Right to Enjoin Defaults. Subject to
the provisions of Sections 24.04 and 43.06 hereof, in the event
of Tenant's Default or the failure of Landlord to comply with
its obligations under this Lease, Landlord or Tenant, as the
case may be, shall be entitled, at any time thereafter during
the continuance of such Tenant's Default or Landlord's failure
and the expiration of at least ten (10) days after the giving
of notice that Landlord or Tenant, as the case may be, intends
-182-
<PAGE>
to pursue its remedies under this Section 24.08, to enjoin such
Tenant's Default or Landlord's failure and shall have the right
to invoke any rights and remedies allowed at law or in equity
or by statute or otherwise, other remedies that may be
available to Landlord or Tenant notwithstanding.
Section 24.09. Survival of Article. The provisions of
this Article 24 shall survive Expiration of the Term.
-183-
<PAGE>
ARTICLE 25
NOTICES
Section 25.01. All Notices, Communications, etc. in
Writing. Whenever it is provided herein that notice, demand,
request, consent, approval or other communication shall or may
be given to, or served upon, either of the parties by the
other, or whenever either of the parties desires to give or
serve upon the other any notice, demand, request, consent,
approval or other communication with respect hereto or to the
Premises, each such notice, demand, request, consent, approval
or other communication shall be in writing and shall be
effective for any purpose only if given or served by personal
delivery or by a national overnight courier service (e.g.
Federal Express), with acknowledgement of receipt, or by
certified or registered mail, postage prepaid, return receipt
requested, addressed as follows:
(a) If to Tenant, addressed to The New York
Times Company, 229 West 43rd St., New York, NY 10036
Attention: Mr. David Thurm, Executive Director of Project
Development and Administration, with a copy thereof to be sent
in the same manner to (i) The New York Times Company, 229 West
43rd Street, New York, New York 10036 Attention: General
Counsel and (ii) Bachner, Tally, Polevoy & Misher, 380 Madison
Avenue, New York, New York 10017 Attention: Martin D. Polevoy,
Esq. or to such other address(es) and attorneys as Tenant may
-184-
<PAGE>
from time to time designate by notice given to Landlord as set
forth herein.
(b) If to Landlord, addressed to The City of New
York, c/o New York City Economic Development Corporation, 110
William Street, New York, New York 10038, Attention: Lease
Administration with a copy thereof to (i) EDC's General Counsel
at the same address and (ii) The New York City Law Department,
100 Church Street, New York, New York 10007, Attention: Chief,
Economic Development Division, or to such other address(es) and
attorneys as Landlord may from time to time designate by notice
given to Tenant as set forth herein.
Section 25.02. Service. Every notice, demand,
request, consent, approval or other communication hereunder
shall be deemed to have been given or served (a) on the fourth
(4th) business day after the same shall have been actually
deposited in the United States mails, postage prepaid, as
aforesaid, or, (b) in the case of personal delivery, or
overnight courier service on the date delivered.
-185-
<PAGE>
ARTICLE 26
NO SUBORDINATION
Subject to the provisions of Article 11 and Section
13.05(b) hereof, and except with respect to liens or
encumbrances consented to or created by or on behalf of
Landlord, Landlord's interest in the Premises and in this
Lease, as the same may be modified, amended or renewed, shall
not be subject or subordinate to (a) any Mortgage now or
hereafter existing, (b) any other liens or encumbrances
hereafter affecting Tenant's interest in this Lease and the
leasehold estate created hereby or (c) any Sublease or any
mortgages, liens or encumbrances now or hereafter placed on any
Subtenant's interest in the Premises. This Lease and the
leasehold estate of Tenant created hereby and all rights of
Tenant hereunder are and shall be subject to the Title Matters.
-186-
<PAGE>
ARTICLE 27
SANITARY SEWER
Section 27.01. Requirement of Sanitary Sewer.
Landlord acknowledges that the leasehold estate granted hereby
and the Improvements to be constructed on the Land shall be of
no value to Tenant unless and until there is constructed and
put into proper working order a sanitary sewer system designed
on behalf of Lease Administrator to run along the westerly side
of the Whitestone Expressway Service Road adjacent to the
Premises with a design and capacity sufficient to service a
Printing Facility of not less than 720,000 square feet of Gross
Building Area, together with such other buildings and
improvements that may be necessary in connection therewith (the
"Sanitary Sewer"). It is presently contemplated that the
Sanitary Sewer shall be constructed substantially in accordance
with those certain drawings titled "Installation of Sanitary
Sewers and Sundry Appurtenant Structures in College Point,"
Sheets 1 through 24, prepared by King & Gavaris and dated
April 18, 1990 (the "Sewer Drawings" and, together with the
specifications developed or to be developed in connection with
such Sewer Drawings, as such Sewer Drawings and specifications
may be modified in accordance with the immediately succeeding
sentence, the "Sewer Plans"). Landlord may modify the design,
size, materials or capacity of the Sanitary Sewer only to the
extent necessary to comply with Requirements or respond to
-187-
<PAGE>
technological changes; provided, however, that no such
modification shall render the Sanitary Sewer insufficient to
service a Printing Facility of not less than 720,000 square
feet of Gross Building Area, together with such other buildings
and improvements that may be necessary in connection therewith.
Section 27.02. Obligation to Construct Sanitary
Sewer. Landlord shall perform or cause to be performed the
work necessary to construct and put into proper working order
the Sanitary Sewer in accordance with the Sewer Plans (the
"Sanitary Sewer Work"), except to the extent that the Sanitary
Sewer Work is performed by Tenant pursuant to the provisions of
Funding Agreement #2. The party performing the Sanitary Sewer
Work shall be responsible for performing all work shown on or
evidently required by the Sewer Plans including, without
limitation, any and all excavation and/or piling work shown on
or evidently required by the Sewer Plans. If Tenant performs
the Sanitary Sewer Work pursuant to the provisions of Funding
Agreement #2, the term "Work," as such term is defined in
Funding Agreement #2, shall be deemed to include all work shown
on or evidently required by the Sewer Plans. Landlord shall
complete the Sanitary Sewer Work by the date (the "Scheduled
Sanitary Sewer Completion Date") that is twenty-four (24)
months after the earlier to occur of (i) the date on which
Tenant gives Landlord written notice that it will not exercise
its option to construct the Sanitary Sewer pursuant to the
-188-
<PAGE>
provisions of Funding Agreement #2, (ii) the date on which
Tenant gives written notice to Landlord revoking Tenant's
election to construct the Sanitary Sewer pursuant to the
provisions of Funding Agreement #2, (iii) the date that is
ninety-one (91) days after the date on which Tenant Commences
Construction of the Project, unless Tenant had duly exercised
its option to construct the Sanitary Sewer prior thereto, or
(iv) the date on which Funding Agreement #2 is terminated
pursuant to any provision thereof or by order of a court of
competent jurisdiction, if the Sanitary Sewer Work had not been
completed prior to such termination (the earlier of (i), (ii),
(iii) or (iv) being hereinafter referred to as "Landlord's
Sewer Commencement Date"); provided, however, that (x) in no
event shall the Scheduled Sanitary Sewer Completion Date be
prior to December 1, 1995 and (y) notwithstanding anything to
the contrary contained herein, in the event that Funding
Agreement #2 is terminated as the result of EDC's default
thereunder, Landlord shall complete the Sanitary Sewer Work not
later than the date by which Tenant shall be ready to make its
connection to the Sanitary Sewer and otherwise cause
Substantial Completion to occur (the "Tenant Readiness Date").
In the event that Tenant gives written notice to Landlord
revoking Tenant's election to construct the Sanitary Sewer
pursuant to the provisions of Funding Agreement #2 for reasons
unrelated to any act or failure to act by Landlord or EDC under
-189-
<PAGE>
Funding Agreement #2, the twenty-four (24) month period
specified in the second sentence of this Section 27.02 shall be
increased by the number of days in the period commencing on
(x) the date on which Tenant gives written notice to Landlord
of its election to construct the Sanitary Sewer pursuant to the
provisions of Funding Agreement #2, and expiring on (y) the
date on which Tenant gives written notice to Landlord revoking
such election. Tenant shall give Landlord not less than thirty
(30) nor more than ninety (90) days' advance written notice of
the date by which Tenant expects the Tenant Readiness Date to
occur. Promptly following the Tenant Readiness Date, Tenant
shall submit to Landlord a certificate of the Architect or
Engineer of Record certifying to the effect that substantial
completion has occurred with the exception of Tenant's hookup
to the Sanitary Sewer and that Tenant would be ready to make
such hookup if the Sanitary Sewer were completed.
Section 27.03. Damages for Landlord's Failure to
Construct Sanitary Sewer. If Landlord shall not have completed
the Sanitary Sewer Work and/or Tenant, using reasonable
diligence, shall not have made its connection to the Sanitary
Sewer by the date (the "Sanitary Sewer Default Date") that is
the later to occur of (i) the Scheduled Sanitary Sewer
Completion Date and (ii) the Tenant Readiness Date, then, for
the period (the "Sanitary Sewer Offset Period") commencing on
the Sanitary Sewer Default Date and ending on the date by which
-190-
<PAGE>
both (x) Landlord shall have completed the Sanitary Sewer Work
and (y) Tenant, using reasonable diligence, shall have made
(or, using reasonable diligence, should have made) its
connection to the Sanitary Sewer, Tenant shall be entitled to
accrue, as liquidated damages, as an offset against future
installments of Rental (excluding Impositions and College Point
Improvement Fund Payments) becoming due and payable after the
Sanitary Sewer Default Date an amount (the "Sewer Offset
Amount") equal to the product of (A) $1,000.00, multiplied by
(B) the number of days in the Sanitary Sewer Offset Period.
Section 27.04. Damages for Delaying Tenant's
Construction of the Sanitary Sewer. If Tenant elects to
perform the Sanitary Sewer Work pursuant to the provisions of
Funding Agreement #2 or this Lease, and Tenant is delayed in
completing the Sanitary Sewer Work and making its connection
thereto beyond the Tenant Readiness Date, then Tenant shall be
entitled to accrue, as liquidated damages, as an offset against
future installments of Rental (excluding Impositions and
College Point Improvement Fund Payments) becoming due and
payable after the Tenant Readiness Date an amount (the "Sewer
Delay Offset Amount") equal to the product of (A) $1,000,
multiplied by (B) the number of days of Public Sewer Delay, not
to exceed the number of days in the Sewer Delay Period. The
term "Public Sewer Delay" shall mean any delay in the
completion of the Sanitary Sewer Work and Tenant's connection
-191-
<PAGE>
thereto arising from the acts or omissions of EDC, or Landlord
or any of their employees, agents, contractors, departments,
divisions or agencies including, without limitation:
(i) defects in the Plans and Specifications for the Sanitary
Sewer Work, (ii) the failure to make necessary revisions to
such Plans and Specifications on a timely basis, (iii) EDC's
inspection or requiring the uncovering of the Sanitary Sewer
Work (unless EDC was correct in suspecting that such uncovering
would reveal defective work) or any delays in performing such
inspection, or (iv) EDC's failure to accept a low bid for all
or any portion of the Sanitary Sewer Work because such low bid
nonetheless exceeds the Engineer's Estimate. The term "Sewer
Delay Period" shall mean the period commencing on (x) the
Tenant Readiness Date, and expiring on (y) the date on which
Tenant, using reasonable diligence, shall have (or, using
reasonable diligence, should have) made its connection to the
Sanitary Sewer.
Section 27.05. Sewer Self-Help Remedy. In the event
that either (i) Landlord fails to commence the Sanitary Sewer
Work within one hundred eighty (180) days after Landlord's
Sewer Commencement Date, subject to Landlord's right to an
extension on a day-for-day basis for each day of Unavoidable
Delays or (ii) Landlord shall cease the performance of the
Sanitary Sewer Work for any period in excess of ninety (90)
successive calendar days, subject to Landlord's right to an
-192-
<PAGE>
extension on a day-for-day basis for each day of Unavoidable
Delays, then, without regard to whether Tenant may have
previously elected to perform the Sanitary Sewer Work pursuant
to the provisions of Funding Agreement #2 or this Lease, or
whether Funding Agreement #2 may have previously been
terminated due to Tenant's default thereunder, Tenant shall
have the right to elect to perform the Sanitary Sewer Work upon
all of the terms and conditions of Funding Agreement #2.
-193-
<PAGE>
ARTICLE 28
ABANDONMENT OF THE PROJECT
Section 28.01. Effect of Abandonment of the Project.
Landlord and Tenant acknowledge and agree that an Abandonment
of the Project shall not constitute a Default or Event of
Default.
Section 28.02. Loss of Certain Benefits. From and
after the date of Abandonment of the Project: (i) PILOT shall
be equal to Taxes (computed in accordance with the provisions
of Section 3.05(d)(i) hereof), (ii) Tenant shall be required to
make Public Purpose Payments in accordance with the provisions
of Section 36.02 hereof and (iii) the provisions of Section
3.08.1 hereof shall be of no further force and effect, except
that (x) Section 3.08.1 shall continue in effect with respect
to Exempt Taxes attributable to transactions occurring, or
periods ending, prior to the date on which Abandonment of the
Project shall be deemed to have occurred, including, without
limitation, exercise by Tenant of its Purchase Option provided
in Article 21 hereof prior to such date (regardless of whether
the transfer of title to the Property takes place after such
date); and (y) Sections 3.08.2 through 3.08.4 shall continue in
effect with respect to any Exempt Taxes as to which Section
3.08.1 so continues in effect; and provided, however, that if
and to the extent that any Taxes are required to be paid with
respect to the Premises notwithstanding Landlord's ownership
thereof, PILOT shall be reduced by a like amount.
-194-
<PAGE>
Section 28.03. Reimbursement of Funding.
(a) In the event that there shall be an
Abandonment of the Project at any time prior to the Operational
Date, Tenant shall reimburse EDC dollar for dollar for the
Funding or any portion thereof disbursed by EDC pursuant to
Funding Agreement #1 prior to the date of such Abandonment of
the Project (the "EDC Reimbursement Amount") substantially in
accordance with the illustration for such reimbursement set
forth in "Reimbursement Schedule" attached hereto as Exhibit
M-1 and made a part hereof, including interest thereon at the
rate of the lesser of either (x) nine percent (9%) per annum or
(y) the City's cost of borrowing, from the date on which EDC
disbursed such funds to Tenant until Tenant fully reimburses
EDC for such funds.
(b) In the event that there shall be an
Abandonment of the Project at any time after the Operational
Date, Tenant shall reimburse EDC for an amortized amount (the
"Amortized EDC Reimbursement Amount") of the Funding or any
portion thereof disbursed by EDC pursuant to Funding
Agreement #1 prior to the date of such Abandonment of the
Project, amortized in accordance with the "Amortized
Reimbursement Schedule" attached hereto as Exhibit M-2 and
hereby made a part hereof, such amortized amount to include
interest thereon at the rate of the lesser of either (x) nine
percent (9%) per annum or (y) the City's cost of borrowing,
-195-
<PAGE>
from the date on which EDC disbursed such funds to Tenant until
Tenant fully reimburses EDC for the appropriate amortized
amount of such funds.
(c) Unless Tenant exercises the purchase option
contained in Article 21 hereof, in which event the provisions
of Article 21 and the Purchase Agreement shall govern, Tenant
shall reimburse EDC for the amounts described in subsection (a)
and (b) of this Section 28.03 in equal quarterly installments
commencing on the first day of the calendar quarter occurring
immediately after the date on which Abandonment of the Project
is deemed to have occurred and continuing thereafter for a
period of five (5) years. Tenant shall have the right, at any
time during such five (5) year period, to prepay all or any
portion of the Funding to be reimbursed (together with any
interest accrued thereon pursuant to the terms hereof) without
penalty or premium.
Section 28.04. Right to Terminate. In the event that
(i) there shall be an Abandonment of the Project, (ii) Tenant
shall make all reimbursements to EDC required pursuant to
Section 28.03 hereof and (iii) Tenant does not exercise the
purchase option contained in Article 21 hereof, then, at any
time thereafter, Tenant shall have the right, to be exercised
in Tenant's sole discretion by written notice to Landlord, to
terminate the Term of this Lease effective as of a date to be
set forth in such notice, in which event all of Tenant's
-196-
<PAGE>
obligations under this Lease shall terminate and come to an end
effective as of the date of termination set forth in such
notice.
-197-
<PAGE>
ARTICLE 29
CERTIFICATES BY LANDLORD AND TENANT
Section 29.01. Certificate of Tenant. Tenant shall,
within fifteen (15) business days after notice by Landlord,
execute, acknowledge and deliver to Landlord, or any other
Person specified by Landlord, a written statement (which may be
relied upon by such Person) (a) certifying (i) that this Lease
is unmodified and in full force and effect (or if there are
modifications, that this Lease, as modified, is in full force
and effect and stating such modifications and providing a copy
thereof if requested), and (ii) the date to which each item of
Rental payable by Tenant hereunder has been paid, and (b)
stating (i) whether Tenant has given Landlord written notice of
any event that, with the giving of notice or the passage of
time, or both, would constitute a default by Landlord in the
performance of any covenant, agreement, obligation or condition
contained in this Lease, and (ii) whether, to the actual
knowledge of Tenant, Landlord is in default in performance of
any covenant, agreement, obligation or condition contained in
this Lease, and, if so, specifying in detail each such default,
Section 29.02. Certificate of Landlord. Landlord
shall, within fifteen (15) business days after notice by
Tenant, execute, acknowledge and deliver to Tenant, or such
other Person specified by Tenant, a statement (which may be
relied upon by such Person) (a) certifying (i) that this Lease
-198-
<PAGE>
is unmodified and in full force and effect (or if there are
modifications, that this Lease, as modified, is in full force
and effect and stating such modifications and providing a copy
thereof if requested), and (ii) the date to which each item of
Rental payable by Tenant hereunder has been paid, and (b)
stating (i) whether an Event of Default has occurred or whether
Landlord has given Tenant written notice of any event that,
with the giving of notice or the passage of time, or both,
would constitute an Event of Default, and (ii) whether, to the
actual knowledge of Landlord, Tenant is in Default in the
performance of any covenant, agreement, obligation or condition
contained in this Lease, and, if so, specifying, in detail,
each such Default or Event of Default.
-199-
<PAGE>
ARTICLE 30
CONSENTS AND APPROVALS
Section 30.01. Effect of Granting or Failure to Grant
Approvals or Consents. All consents and approvals which may be
given under this Lease shall, as a condition of their
effectiveness, be in writing. The granting of any consent or
approval by a party to perform any act requiring consent or
approval under the terms of this Lease, or the failure on the
part of a party to object to any such action taken without the
required consent or approval, shall not, except where expressly
stated otherwise, be deemed a waiver by the party whose consent
was required of its right to require such consent or approval
for any further similar act.
Section 30.02. Remedy for Refusal to Grant Consent or
Approval. If, pursuant to the terms of this Lease, any consent
or approval by Landlord or Tenant is not to be unreasonably
withheld or delayed or is subject to a specified standard (and
provided that such provision does not provide for deemed
approval if no response is given to Tenant within a specified
period of time) then in the event there shall be a final
determination that the consent or approval was unreasonably
withheld or delayed or that such specified standard has been
met so that the consent or approval should have been granted,
the consent or approval shall be deemed granted and, unless
specified to the contrary elsewhere in this Lease, Landlord
-200-
<PAGE>
shall have no additional liability to Tenant for withholding or
delaying such consent or approval.
Section 30.03. No Unreasonable Delay. Wherever this
Lease provides that Landlord's or Tenant's consent or approval
is not to be unreasonably withheld, such consent or approval
also shall not be unreasonably delayed. Unless specifically
stated otherwise, all consents of Landlord required under this
Lease shall be granted or withheld in Landlord's reasonable
discretion.
Section 30.04. No Fees Etc. Except as specifically
provided herein, no fees or charges of any kind or amount shall
be required by either party hereto as a condition of the grant
of any consent or approval which may be required under this
Lease. The preceding however shall not limit the City's right
to charge, in its governmental capacity (as opposed to its
capacity as Landlord and owner of the fee interest in the
Premises), generally applicable fees and charges in connection
with requests for building permits, certificates of occupancy
or other permits, licenses, etc.
-201-
<PAGE>
ARTICLE 31
SURRENDER AT END OF TERM
Section 31.01. Surrender of Premises. Subject to
Section 8.03 hereof, upon the Expiration Date (or upon a
re-entry by Landlord upon the Premises pursuant to Article 24),
Tenant, without any payment or allowance whatsoever by
Landlord, shall surrender the Premises to Landlord in good
order, condition and repair, reasonable wear and tear excepted,
free and clear of all Subleases, liens and encumbrances other
than Subleases to which Landlord has given recognition pursuant
to the provisions of Section 10.06 or otherwise, easements and
other rights which Landlord has agreed may survive the
termination of this Lease and rights of Recognized Mortgagees
under Section 11.04. Subject to the provisions of Section
21.01(c) hereof, Tenant hereby waives any notice now or
hereafter required by law with respect to vacating the Premises
on the Expiration Date.
Section 31.02. Delivery of Subleases, etc. Upon the
Expiration Date (or upon a re-entry by Landlord upon the
Premises pursuant to Article 24), Tenant shall deliver to
Landlord Tenant's executed counterparts of all Subleases and
any service and maintenance contracts then affecting the
Premises, and all warranties and guarantees then in effect
which Tenant has received in connection with any work or
services performed or Equipment installed at the Premises,
-202-
<PAGE>
together with a duly executed assignment thereof to Landlord in
form reasonably satisfactory to Tenant and Landlord, and copies
of all financial reports, books and records required by
Article 37 and any and all other material documents relating to
the operation of the Premises and the condition of the
Improvements (or copies thereof, to the extent Tenant is
required by law or generally accepted accounting principles, to
retain the originals).
Section 31.03. Personal Property. Any personal
property of Tenant, or of any Subtenant which has not been
granted non-disturbance rights, which shall remain on the
Premises for six (6) months after the Expiration Date (or after
a reentry by Landlord upon the Premises pursuant to Article 24)
and after the removal of Tenant or such Subtenant from the
Premises, may, at the option of Landlord, be deemed to have
been abandoned by Tenant or such Subtenant, and subject to the
rights of Recognized Mortgages either may be retained by
Landlord as its property or be disposed of at Tenant's expense,
without accountability, in such manner as Landlord may see
fit. Landlord shall not be responsible for any loss or damage
occurring to any such property owned by Tenant or any
Subtenant. Notwithstanding anything to the contrary contained
herein, the right of Tenant or any Subtenant which has not been
granted non-disturbance rights to leave personal property at
the Premises for six (6) months after the Expiration Date
-203-
<PAGE>
before such property shall be deemed abandoned, shall not be
construed to permit Tenant or any such Subtenant to leave
personal property at the Premises for more than three hundred
sixty-five (365) days after the giving by Tenant of a notice to
Landlord terminating this Lease pursuant to the provisions of
Section 8.02(a);
Section 31.04. Survival Clause. The provisions of
this Article shall survive the Expiration Date.
-204-
<PAGE>
ARTICLE 32
ENTIRE AGREEMENT
This Lease, the Power Agreement and Funding Agreements
#1, #2 and #3, including all the Exhibits, contain all of the
promises, agreements, conditions, inducements and
understandings between Landlord and Tenant concerning the
Premises and there are no promises, agreements, conditions,
understandings, inducements, warranties or representations,
oral or written, expressed or implied, between them covering
the Premises other than as expressly set forth herein or as may
be expressly contained in any enforceable written agreements or
instruments executed by the parties hereto.
-205-
<PAGE>
ARTICLE 33
QUIET ENJOYMENT
Landlord covenants that, as long as Tenant faithfully
shall perform the agreements, terms, covenants and conditions
hereof, Tenant shall (subject to the terms and conditions of
this Lease) peaceably and quietly have, hold and enjoy the
Premises for the Term without molestation or disturbance by or
from Landlord or any Person claiming through Landlord.
-206-
<PAGE>
ARTICLE 34
ARBITRATION
Section 34.01. Disputes to be Submitted to
Arbitration. Every dispute between the parties which is
specifically provided in this Lease to be determined by
arbitration shall be submitted to arbitration in the manner
hereinafter provided.
Section 34.02. Procedure for Arbitration.
(a) Dispute Notice. The party desiring the
arbitration shall, by notice to the other party (the "Dispute
Notice"), require that the dispute in question be presented for
resolution to the first available arbiter set forth on the
applicable list below in Section 34.06. The party giving the
Dispute Notice shall give a copy of such Dispute Notice to the
first arbiter on such applicable list (unless such first
arbiter is known to be unavailable) with a cover letter
requesting such arbiter to serve. In the event the first named
arbiter is not available or is unwilling to serve, the arbiter
next set forth on the list shall be engaged, and so on, until
arriving at an available arbiter. The arbiter serving to
resolve any dispute hereunder is hereinafter referred to as the
"Arbiter".
(b) Rejection Notice. Either party may, within
five (5) Business Days of its receipt of the other party's
Dispute Notice (the "Notice Period") give notice to such other
-207-
<PAGE>
party and to the Arbiter (the "Rejection Notice") stating that
the dispute is not subject pursuant to the terms of this Lease
to the dispute resolution mechanism of this Article 34. The
validity of the Rejection Notice shall also be subject to
arbitration as set forth herein by the first available Arbiter
from the applicable list designated by the Dispute Notice, in
which event the parties shall make such submissions as they may
wish to the Arbiter regarding such validity within five (5)
Business Days after the giving of the Rejection Notice.
(c) Arbiter's Decision. If either: (i) the
recipient of the Dispute Notice fails to give a Rejection
Notice to the other party within the Notice Period, or (ii) the
Arbiter determines that the dispute is arbitrable pursuant to
the terms of this Lease, then such dispute shall be deemed
arbitrable and both parties shall make such submissions as they
may wish to the Arbiter within five (5) Business Days after the
expiration of the Notice Period or, if a Rejection Notice is
given, the determination that the dispute is arbitrable, as the
case may be. Within five (5) Business Days thereafter, the
Arbiter shall attempt to cause Landlord and Tenant to agree on
a resolution to the dispute and, failing that, shall make a
decision in writing by 5:00 P.M. on the last day of such five
(5) Business-Day period. Copies of the Arbiter's decision
shall be sent to Landlord and Tenant.
Section 34.03. Selection of Arbiter.
-208-
<PAGE>
(a) Disqualifications. During the month of
January of each calendar year during the Term, Tenant and
Landlord may each, by written notice to the other, disqualify
one of the listed arbiters for any reason whatsoever. Landlord
and Tenant may also by written notice to each other at any time
(including the five (5) Business Day period following the
giving of a Dispute Notice), require any arbiter to be
disqualified for cause (including, without limitation, conflict
of interest), the presence of such cause (if disputed) to be
determined by another arbiter under the provisions of this
Article 34. The remaining arbiters shall move up on the list
to fill any vacancies so created.
(b) Replacements. If any of the listed arbiters
dies, becomes disabled, retires, goes out of business, is
disqualified by Landlord or Tenant for cause or otherwise, or
elects to withdraw from the list, then Landlord and Tenant
shall agree on a replacement within twenty (20) days after
notice thereof. If Landlord and Tenant fail to so agree, each,
within five (5) days after such twenty (20) day period, shall
designate one of the remaining listed arbiters and the two
arbiters so chosen shall appoint a replacement within twenty
(20) days thereafter. All newly chosen arbiters shall be
placed at the last position on the list. If more than one
arbiter is chosen at the same time, the arbiters who are so
chosen shall be listed in alphabetical order. In the event
-209-
<PAGE>
that, at any time, there is no listed arbiter available,
Landlord and Tenant shall endeavor to agree upon a reputable
and experienced arbiter to resolve the dispute in question. In
the event that Landlord and Tenant are unable to agree on such
arbiter, such arbiter shall be chosen in accordance with the
rules of the American Arbitration Association then prevailing.
The Arbiter, however chosen, shall proceed to resolve any
dispute in accordance with the provisions set forth in this
Article 34.
Section 34.04. Recognized Mortgagees. Any Recognized
Mortgagee may participate, through or in place of Tenant, in
any arbitration conducted pursuant hereto, provided that any
such participation shall not be deemed to expand Tenant's
rights.
Section 34.05. Arbiter's Decision. In rendering his
or her decision, the Arbiter shall have no power to modify any
of the provisions of this Lease, and the jurisdiction of the
Arbiter is expressly limited accordingly. The decision of the
Arbiter shall be final and conclusive on the parties, and
judgment may be entered on the decision of the Arbiter rendered
in accordance with this Article 34 and may be enforced in
accordance with the laws of New York State.
Section 34.06. Lists of Arbiters.
(a) To determine disputes regarding the
calculation of "Gross Building Area":
-210-
<PAGE>
1. Mr. David Castro-Blanco
Castro-Blanco, Piscioneri Associates
62 Cooper Square
New York, New York 10003
(212) 254-2700
2. Ms. Linda Eklund
Emery Roth & Sons Architect
560 Lexington Avenue
New York, New York 10022
(212) 753-1733
3. Mr. Robert Fox
Fox & Fowle
22 West 19th Street
New York, New York 10011
(212) 627-1700
4. Mr. Eugene Kohn
Kohn Pederson Fox, Associates
111 West 57th Street
New York, New York 11019
(212) 977-6500
(b) To determine disputes pursuant to Sections
7.03(b) and 7.04 hereof:
1. Ms. Laura Bouyet
Marsh & McLennan
1166 Avenue of the Americas
New York, New York 10036-2774
(212) 345-6590
2. Mr. Gordon Prager
Johnson & Higgins
125 Broad Street
New York, New York 10004-2424
(212) 574-8359
3. Ms. Pamela Newman
Rollins Hudig Hall
261 Madison Avenue
New York, New York 10005
(212) 573-5664
-211-
<PAGE>
4. Mr. Jonathan Ostrau
Alexander & Alexander
1185 Avenue of the Americas
New York, New York 10036
(212) 575-8000
(c) To determine disputes as to whether
(x) Landlord has acted unreasonably in withholding its consent
to a Transfer that is not an Affiliate Transfer or a
Merger/Sale Transfer or (y) a material default has occurred
under Section 7.2(b) of Funding Agreement #1:
1. The then dean of Columbia Law School
2. The then dean of New York University
Law School
3. The then dean of Fordham Law School
4. The then dean of Brooklyn Law School
(d) To determine disputes under this Lease or
Funding Agreement #1 as to whether Landlord has acted
unreasonably in withholding its approval of Plans and
Specifications or modifications or resubmissions of Plans and
Specifications:
1. Mr. Richard Dattner
Richard Dattner Architect P.C.
154 West 57th Street
New York, New York 10019
(212) 247-2660
2. Mr. Fred Bland
Beyer Blinder Belle
41 East 11th Street
New York, New Yorzk 10003
(212) 777-7800
-212-
<PAGE>
3. Mr. Henry Brennan
Brennan Bear Gorman
515 Madison Avenue
New York, New York 10001
(212) 888-7663
4. Mr. Brad Perkins
Perkins Eastman & Partners
437 Fifth Avenue
New York, New York 10016
(212) 889-1720
(e) To determine disputes as to whether a
Default or Event of Default of the nature described in Section
24.01(b) or (c) hereof has occurred and is continuing:
1. Mr. Charles Uribe
A.J. Contracting Corp.
470 Park Avenue South
New York, New York 10016
(212) 889-9100
2. Mr. Mitch Solomon
HRH Construction
909 3rd Avenue
New York, New York 10022
(212) 751-3100
3. Mr. Arthur Thompsen
Hennigan Construction, Inc.
250 West 30th Street
New York, New York 10001
(212) 947-6441
4. Mr. Joseph Coppotelli
Structure Tone, Inc.
15 East 26th Street
New York, New York 10010
(212) 481-6100
(f) To determine disputes that are subject to
arbitration pursuant to (x) Section 5.7(d) of Funding Agreement
#2 or (y) any provision of Funding Agreement #4:
-213-
<PAGE>
1. Mr. Daniel Greenbaum
Vollmer Associates
50 West 23rd Street
New York, New York 10010
2. Mr. Neal J. Forshner
Envirodyne Engineers, Inc.
41 East 42nd Street
New York, New York 10017
3. Mr. Malcolm McLaren
M.G. McLaren Consulting Engineers
100 Snake Hill Road
West Nyack, New York 10994
(914) 353-6400
4. Mr. Mark Schiffman
Shah Trans Inc.
101 South Bergen Place
Freeport, New York 11520
(516) 868-0900
-214-
<PAGE>
ARTICLE 35
ADMINISTRATIVE AND JUDICIAL
PROCEEDINGS, CONTESTS ETC.
Section 35.01. Tax Contest Proceedings.
(a) Tenant shall have the right, at its sole
cost and expense, to seek reductions in the valuation of the
Land and/or Improvements assessed for real property tax
purposes and to prosecute any action or proceeding in
connection therewith by appropriate proceedings in accordance
with the City Charter and the City's Administrative Code,
notwithstanding that the Premises may then be exempt from
payment of any such real property tax or that any such tax may
be abated by reason of this Lease or under applicable law.
Landlord shall arrange for its Department of Finance to send
"so-called" FLACK Notices setting forth changes in the assessed
valuation of the Land and/or the Improvements directly to
Tenant, with a copy to Tenant's General Counsel and Tenant's
attorneys at the address set forth in Article 25 hereof, as
such address may be changed in accordance with the provisions
of said Article 25.
(b) Tenant shall continue to pay the full amount
of PILOT required under Section 3.05 until a final
determination is made with respect to any such action or
proceeding.
-215-
<PAGE>
(c) If, upon the final determination of any such
action or proceeding, it is determined that Tenant is entitled
to such reduction, PILOT shall be reduced in accordance with
such determination; and if pursuant to such determination
Tenant is entitled to a reduction in the amount of any PILOT
payment(s) or portion thereof already paid, the difference (the
"PILOT Refund Amount") between the amount of the PILOT actually
paid by Tenant and the amount of the PILOT that should have
been paid in light of such reduction shall be offset against
any future PILOT payments and/or other Rental payments that may
be due, or, if no future PILOT payments and/or other Rental
payments are due, Landlord shall promptly refund such amount to
Tenant. The PILOT Refund Amount shall bear interest from the
date of overpayment to the date of offset or refund, as the
case may be, at the rate of interest that The City is paying to
taxpayers who are entitled to real estate tax refunds.
Section 35.02. Imposition Contest Proceedings. Tenant
shall have the right to contest, at its sole cost and expense,
the amount or validity, in whole or in part, of any Imposition
by appropriate proceedings diligently conducted in good faith,
or in any other manner permitted by law, including, without
limitation, the right to prosecute administrative and/or
judicial proceedings and judicial review and appeal of any
decision which Tenant, in its sole discretion, considers
adverse, and the right to settle or compromise any such
-216-
<PAGE>
proceeding. In the event of any such contest, payment of such
Imposition may be postponed until the matter is resolved. Any
amount postponed hereunder shall bear interest at the Late
Charge Rate until paid.
Section 35.03. Requirement Contest. Tenant shall have
the right to contest the validity of any Requirement or the
application thereof in any manner permitted by law, including,
without limitation, the right to prosecute administrative
and/or judicial proceedings and judicial review and appeal of
any decision which Tenant, in its sole discretion, considers
adverse, and the right to settle or compromise any such
proceeding. During such contest, compliance with any such
contested Requirement may be deferred by Tenant. Any such
proceeding instituted by Tenant shall be commenced reasonably
promptly after the issuance of any such contested Requirement
and shall be prosecuted with diligence to final adjudication,
settlement, compliance or other disposition of the Requirement
so contested which is acceptable to the Governmental Authority
enforcing such Requirement. Tenant shall comply with any such
Requirement in accordance with the provisions of Section
16.01(a) if the Premises, or any part thereof, are in danger of
being forfeited or if Landlord is in danger of being subjected
to criminal liability or penalty.
-217-
<PAGE>
Section 35.04. Landlord's Participation in Contest
Proceedings. Landlord, at Tenant's option, shall (i) join in
any action or proceeding brought by Tenant referred to in this
Article and/or (ii) permit the action to be brought by Tenant
in Landlord's name, and/or (iii) execute such documents that
Tenant may reasonably request in connection with such action or
proceeding.
-218-
<PAGE>
ARTICLE 36
SALES AND COMPENSATING USE TAXES
Section 36.01. Exemption. Landlord warrants and
represents that, by reason of Landlord's ownership of the
Improvements, sales and compensating use taxes will not be
payable in connection with the materials, fixtures and
Equipment purchased and incorporated into the Improvements.
Landlord shall assist Tenant to the extent required by the
provisions of Section 3.08 hereof in establishing any such
exemption. Notwithstanding the foregoing or anything to the
contrary elsewhere in this Lease, Landlord hereby agrees that,
for income tax purposes, Tenant shall be considered to have all
of the benefits and burdens of ownership with respect to the
Improvements and that Landlord will not claim any deduction or
credit on its income tax returns or any other filings or
financial statements with respect to the Improvements and will
not otherwise take any action in connection with the
Improvements which would disentitle Tenant to claim the
deductions and credits that it would otherwise be entitled to
claim as the owner of the Improvements for income tax purposes.
Section 36.02. Public Purpose Payments. From and
after Abandonment of the Project, Tenant shall pay to the
appropriate taxing authority an amount equal to the amount of
New York State and City sales and compensating use taxes that
would, with respect to purchases completed after the date of
-219-
<PAGE>
such Abandonment, thereafter be required to be paid by Tenant,
or contractors working on its behalf or their subcontractors,
with respect to any tangible personal property that thereafter
becomes an integral component of any Improvement, if not for
the exemption from such taxes based on the Landlord's ownership
of the Premises, reduced by any amount representing such sales
or use taxes which Tenant has for any reason paid to any taxing
authority, including Landlord, or to any of Tenant's vendors,
contractors of subcontractors. Payments required by this
Article are referred to herein as "Public Purpose Payments" and
shall not, from and after Abandonment of the Project,
constitute Exempt Taxes.
-220-
<PAGE>
ARTICLE 37
REPORTS, SUBMISSIONS AND RECORDS
Section 37.01. Financial Reports. For as long as the
City shall be Landlord and to the extent that City
Administrative Code Section 11-208.1 (or successor thereto) is
then in force and effect, Tenant shall furnish to Landlord
income and expense statements of the type required by such City
Administrative Code section (or successor thereto) as if Tenant
were the "owner" of the Premises as such term is used in City
Administrative Code Section 11-208.1, such statements to be
submitted within the time periods and to the address provided
for in City Administrative Code Section 11-208.1; such
statements are to be furnished notwithstanding that the City
holds fee title to the Premises, or that the Premises may
therefore not be "income-producing property" as that concept is
used in City Administrative Code Section 11-208.1.
Section 37.02. Submission of Certificates of
Occupancy. Tenant shall submit to Landlord a copy of each and
every Certificate of Occupancy received for part or all of the
Project, within thirty (30) Business Days of Landlord's request
therefor.
-221-
<PAGE>
ARTICLE 38
RECORDING OF LEASE
Tenant may, at Tenant's option, cause this Lease and
any amendments hereto, or a memorandum hereof or thereof, to be
recorded in the Office of the Register of the City of New York
(Queens County) after the execution and delivery of this Lease
or any such amendments and Landlord shall promptly execute any
such memorandum of lease upon request of Tenant.
-222-
<PAGE>
ARTICLE 39
TENANT'S PROPERTY
Notwithstanding anything to the contrary contained in
Section 13.07 hereof, all Tenant's Property shall be and remain
the property of Tenant (or any Subtenant of Tenant, as the case
may be) and may be removed by Tenant (or such Subtenant) at any
time during the Term.
-223-
<PAGE>
ARTICLE 40
NONDISCRIMINATION; AFFIRMATIVE ACTION
Section 40.01. Executive Order No. 50. The
provisions of this Section 40.01 shall apply only with respect
to contracts entered into directly by Tenant for Construction
Work in an amount of $1,000,000 or more, and subcontracts for
Construction Work in an amount of $750,000 or more, in each
case with respect only to Construction Work necessary to
accomplish Substantial Completion of the Initial Improvements
or any subsequent expansions of the Initial Improvements which
add in excess of 75,000 square feet of Gross Building Area
(hereinafter referred to as "E.O. 50 Contracts" and "E.O. 50
Subcontracts," respectively). For so long as Executive Order
No. 50 of April 25, 1980 (as amended, "E.O. 50") is in effect,
except to the extent that an exemption under E.O. 50 applies,
Tenant shall include in all E.O. 50 Contracts, and shall cause
its contractors to include in all E.O. 50 Subcontracts, the
provisions contained in Exhibit P hereto (the "E.O. 50
Construction Contract Rider"). Tenant shall utilize good faith
efforts to cause the contractors under E.O. 50 Contracts to
comply, and to cause the subcontractors under E.O. 50
Subcontracts to comply, with the provisions of the E.O. 50
Construction Contract Rider. The more restrictive provisions
of Section 6.5(a)(i) of Funding Agreement #1 shall apply with
-224-
<PAGE>
respect to contracts and subcontracts for "Construction Work"
(as such term is defined in Funding Agreement #1), as more
particularly described in said Section 6.5(a)(i).
Section 40.02. Limitations. Notwithstanding anything
to the contrary contained in this Lease, the E.O. 50
Construction Contract Rider or E.O. 50 and the rules and
regulations promulgated thereunder: (i) the contractors and
subcontractors under E.O. 50 Contracts and E.O. 50 Subcontracts
shall in no event be bound by any obligations that are more
stringent than the obligations imposed by E.O. 50 and the rules
and regulations promulgated thereunder in effect as of the date
of this Lease, (ii) no preapproval of the contractors and
subcontractors under E.O. 50 Contracts and E.O. 50 Subcontracts
by any Governmental Authority shall be required, (iii) for so
long as New York State Labor Law Section 220 or any successor
statute requires contractors performing work on public works
projects to pay journey-level wages to trainees, the trainee
requirements of E.O. 50 shall not be applicable to E.O. 50
Contracts, E.O. 50 Subcontracts and the E.O. 50 Construction
Contract Rider and in no event shall Tenant be deemed to be in
breach of the terms hereof due to the non-compliance with such
trainee requirements by any contractor or subcontractor or the
non-inclusion of such trainee requirements in the E.O. 50
Construction Contract Rider or any E.O. 50 Contract or E.O. 50
Subcontract and (iv) in no event shall the default by Tenant
under Section 40.01 or the default by any contractor or
subcontractor under an E.O. 50 Contract or an E.O. 50
-225-
<PAGE>
Subcontract give Landlord or any Governmental Authority the
right to stop, delay or otherwise interfere with the progress
of Construction Work.
Section 40.03. E.O. 50 Remedies. In the event of an
alleged breach of Tenant's obligations under Section 40.01
hereof, or of the obligations of a contractor or subcontractor
under an E.O. 50 Contract or E.O. 50 Subcontract, Landlord,
acting through the Department of Labor Services ("DLS") shall
notify Tenant (and the contractor or subcontractor, as the case
may be) describing the extent of non-compliance. If the
non-compliance is not remedied within thirty (30) days of
Tenant's receipt of notice, DLS shall request a meeting with
Tenant (and with the contractor or subcontractor, as
appropriate) to negotiate an Employment Program of corrective
actions to achieve Tenant's compliance with Section 40.01 and
the compliance by such contractor or subcontractor with the
E.O. 50 Contract or E.O. 50 Subcontract, as the case may be.
If Tenant fails or refuses either to meet, to agree to take
necessary corrective measures, to implement agreed corrective
measures, or to enforce the obligations of a contractor
pursuant to an E.O. 50 Contract and/or to cause a contractor to
enforce the obligations of a subcontractor under an E.O. 50
Subcontract, Landlord, acting through DLS may (i) require such
contractor and/or subcontractor, as the case may be, to take
corrective measures in an Employment Program or (ii) assess
against Tenant as liquidated damages an amount equal to the
-226-
<PAGE>
wages and fringe benefits that would have been paid to the
parties that should have been employed pursuant to the
non-discrimination and trainee provisions of the E.O. 50
Contracts and E.O. 50 Subcontracts. The remedies set forth in
this Section 40.03 shall be the sole remedies available to
Landlord in the event of a breach by Tenant of its obligations
under Section 40.01 hereof, and no other remedies set forth
elsewhere in this Lease shall be applicable to a breach by
Tenant of its obligations under Section 40.01.
Section 40.04. Nondiscrimination; Affirmative
Action. Tenant acknowledges that Landlord insists that parties
with which Landlord enters into contracts do not engage in any
unlawful discrimination in the selection of contractors or
against any employee or job applicant because of race, creed,
color, national origin, sex, age, disability, marital status,
or sexual orientation with respect to all employment decisions
including, but not limited to, recruitment, hiring,
compensation, fringe benefits, leaves, promotion, upgrading,
demotion, downgrading, transfer, training and apprenticeship,
lay-off and termination and all other terms and conditions of
employment. Tenant further acknowledges that Landlord insists
that all parties with which Landlord enters into contracts take
certain affirmative acts to make known to current and
prospective employees of such parties that such parties do not
engage in unlawful discrimination as more particularly
described in the immediately preceding sentence. Landlord
-227-
<PAGE>
acknowledges that (i) there exists at the federal, state and
local level a framework of statutes that require Tenant not to
engage in any unlawful discrimination of the nature described
in this Section 40.04 and to take certain affirmative acts of
the nature described in this Section 40.04 (the
"Nondiscrimination Statutes"), (ii) there exists at the
federal, state and local level a framework of agencies charged
with the enforcement of the Nondiscrimination Statutes (the
"Nondiscrimination Agencies") and (iii) the Nondiscrimination
Statutes provide for certain sanctions that may be imposed by
the Nondiscrimination Agencies or courts of competent
jurisdiction in the event of a violation of the
Nondiscrimination Statutes (the "Nondiscrimination
Sanctions"). Tenant agrees that it shall comply with all
Nondiscrimination Statutes with respect to the Premises that
may be legally applicable to Tenant from time to time during
the Term.
Section 40.05. Nondiscrimination Remedies. In the
event that Landlord has a reasonable basis for believing that
Tenant is in violation of a Nondiscrimination Statute with
respect to the Premises, Landlord shall notify Tenant
describing the nature of such perceived violation. If such
violation is not remedied within thirty (30) days of Tenant's
receipt of notice, Landlord shall request a meeting with Tenant
to discuss Tenant's position as to whether or not Tenant is, in
fact, in violation of a Nondiscrimination Statute and, if so,
-228-
<PAGE>
what steps, if any, Tenant intends to take to remedy such
violation. If Tenant fails or refuses either to meet, to
demonstrate that Tenant is not in violation of a
Nondiscrimination Statute, or to take steps to remedy any
existing violation of a Nondiscrimination Statute, Landlord, as
its sole remedy under this Lease, shall have the right to
report to the appropriate Nondiscrimination Agency Landlord's
allegation that Tenant is in violation of a Nondiscrimination
Statute. Nothing contained herein shall be construed to vest
in Landlord the right to institute legal proceedings or seek
damages against Tenant, it being understood and agreed that the
imposition of any Nondiscrimination Sanctions against Tenant by
a Nondiscrimination Agency or court of competent jurisdiction
shall be Tenant's sole liability for a breach of its
obligations under Section 40.04 hereof. The remedies set forth
in this Section 40.05 shall be the sole remedies available to
Landlord for an alleged breach of Tenant's obligations under
Section 40.04 hereof or an alleged violation of a
Nondiscrimination Statute, and no other remedies set forth
elsewhere in this Lease shall be applicable to such an alleged
breach or violation.
-229-
<PAGE>
ARTICLE 40A
INVESTIGATIONS, ETC.
Section 40A.01. Cooperation In Investigations.
(a) Subject to the exclusions set forth in paragraph
(b) of this Section 40A.01, Tenant shall during the term of
this Lease:
(i) cooperate fully, and utilize good faith
efforts to cause its Members to cooperate fully, with
any Investigation; and
(ii) report, and utilize good faith efforts to
cause its Members to report, in writing to the
Commissioner, any solicitation of which Tenant has
actual knowledge of money, goods, requests for future
employment or other benefit or thing of value, by or
on behalf of any employee of the City or other Person,
related to the obtaining and/or performance of the
Transaction Documents or any of them.
(b) The provisions of paragraph (a) of this Section
shall not apply:
(i) to any information or document known,
prepared or obtained by Tenant or its Members (and the
sources of such information or documents) that is
protected from compelled disclosure by any present or
future "Shield Law" or any other statute,
constitutional provision, rule, regulation or case law
-230-
<PAGE>
related to the rights of reporters and/or news
organizations;
(ii) to any Person who refuses to testify based
on a properly invoked privilege against
self-incrimination if such Person is not given
assurances that his or her statement, and any
information from such statement, will not be used
against such Person in any subsequent criminal
proceeding in any forum (provided, however, that any
Person given such assurances shall have the right to
have the legal sufficiency of such assurances
adjudicated by a court of competent jurisdiction as a
precondition of the applicability of paragraph (a) of
this Section to such Person); and
(iii) to any construction contract or other
agreement (or the obtaining or performance thereof)
with parties other than the City or EDC, including,
without limitation, any contract or agreement being
funded through any Transaction Document.
Section 40A.02. Hearing. If Tenant or any Member of
Tenant refuses to testify in an Investigation and, in
connection with such failure to testify, the Commissioner
determines that Tenant has failed to cooperate in the
Investigation in violation of the provisions of Section 40A.01,
the Commissioner may request the Deputy Mayor to convene a
hearing (the "Hearing"), upon not less than five (5) days'
-231-
<PAGE>
written notice to Tenant, to determine if any penalties should
be imposed for the Tenant's failure so to cooperate.
Section 40A.03. Adjournments of Hearing, etc.
(a) Tenant shall have the right to require that the
Hearing be adjourned for a period of not more than thirty (30)
days.
(b) The Deputy Mayor may grant other adjournments of
the Hearing in the exercise of his or her reasonable
discretion; provided that, in the case of an adjournment
occasioned by Tenant's failure to appear, the Deputy Mayor may,
if he or she determines that there was no reasonable cause for
the failure to appear, impose an Interim Penalty.
(c) The City shall not incur any penalty or damages
for delay or otherwise occasioned by an adjournment of the
Hearing.
Section 40A.04. Penalties.
(a) The Deputy Mayor may impose a penalty during an
adjournment due to Tenant's failure to appear or proceed with
the scheduled Hearing pursuant to Section 40A.03(b) ("Interim
Penalty") of not more than $1,000.00 per day for each day of
such adjournment; provided, however, that such daily penalties
shall cease to accrue from and after the date that Tenant makes
itself available to appear at or proceed with the scheduled
Hearing or gives written notice to the Deputy Mayor that it
does not intend to appear at or proceed with the scheduled
Hearing, in which event the Deputy Mayor shall have the right
-232-
<PAGE>
to continue the Hearing and reach a determination without
Tenant's participation.
(b) If, after the Hearing, the Deputy Mayor
determines that Tenant failed to cooperate in the Investigation
in violation of Section 40A.01, and Tenant fails to commence to
cooperate fully in such Investigation within five (5) Business
Days following its receipt of written notice of such
determination, the Deputy Mayor may:
(i) Impose a penalty ("Final Penalty"), which
may not, in conjunction with any Interim Penalty
imposed during the term of the Lease exceed $500,000
in the aggregate during the term of this Lease; and/or
(ii) Disqualify Tenant for a period not to exceed
five (5) years from submitting bids for, or
transacting business with, or entering into or
obtaining any contract, lease, permit or license with
or from the City, other than as contemplated in the
Transaction Documents.
Notwithstanding anything to the contrary contained
herein, in the event that Tenant is found after the Hearing to
have failed to cooperate in the Investigation, but nonetheless
is not subjected to a Final Penalty because Tenant commences to
cooperate fully in such Investigation within five (5) Business
Days following its receipt of written notice of such
determination, Tenant shall be liable for the cost of
conducting such Hearing, not to exceed $5,000.
-233-
<PAGE>
Section 40A.05. Criteria for Determination. The
Deputy Mayor shall consider and address in reaching his or her
determination and in assessing an appropriate Interim Penalty,
Final Penalty, and/or disqualification, if any, the factors in
subsections (a) and (b) below. He or she may also consider, if
relevant and appropriate, the criteria established in
subsections (c) and (d) below in addition to any other
information which may be relevant and appropriate:
(a) Tenant's good faith endeavors or lack thereof to
cooperate fully with the Investigation, including but not
limited to the discipline, discharge or disassociation of any
Person failing to testify, the production of accurate and
complete books and records, and the forthcoming testimony of
all other Members, agents, assignees or fiduciaries whose
testimony is sought. The Deputy Mayor shall take into account
whether the discipline, discharge or disassociation of any
Person failing to testify would violate any union or other
contract.
(b) The relationship of the Person who refused to
testify to Tenant, including, but not limited to, whether the
Person whose testimony is sought has an ownership interest in
Tenant and/or the degree of authority and responsibility the
Person has within Tenant.
(c) The nexus of the testimony sought to Tenant and
the Transaction Documents.
-234-
<PAGE>
(d) The effect a penalty may have on an unaffiliated
and unrelated party or Entity that has a significant interest
in Tenant, provided that (i) such unrelated party or Entity has
given actual notice to the Commissioner or EDC upon the
acquisition of the interest, or (ii) at the Hearing such
related party or Entity gives notice and proves that such
significant interest was previously acquired; under either
circumstance, such unrelated party or Entity must present
evidence at the Hearing demonstrating the potential adverse
impact a penalty will have on such party or Entity.
Section 40A.06. Payment of Penalties. Any Interim or
Final Penalty hereunder shall, upon imposition thereof, be
applied to reduce the aggregate of Offset Amounts then
available to Tenant under Article 4 and the balance, if any,
shall be paid promptly as additional Rental or, at Landlord's
option, such balance shall be applied to reduce EDC's
obligations with respect to any undisbursed Funding.
Section 40A.07. Definitions.
As used in this Article 40A:
"Investigation" means any investigation, audit or
inquiry conducted by the Department of Investigation with
respect to the obtaining and/or performance of the Transaction
Documents or any of them.
-235-
<PAGE>
"Transaction Documents" means this Lease, Funding
Agreement #1, Funding Agreement #2, Funding Agreement #3,
Funding Agreement #4 and the Power Agreement.
"Department of Investigation" means the Department of
Investigation of the City or any City department or agency
succeeding to the functions thereof.
"Commissioner" means the Commissioner or Acting
Commissioner of the Department of Investigation.
"Deputy Mayor" means the Deputy Mayor for Finance and
Development of the City (or the officer of the City succeeding
to the functions of that office).
"Entity" means any firm, partnership, corporation,
association or Person that receives monies, benefits, licenses,
leases or permits from or through the City or otherwise
transacts business with the City.
"Member" means any Person associated with another
Person or Entity as a partner, director, officer, principal or
employee.
Section 40A.08. Exclusive Remedy. Notwithstanding
anything to the contrary contained in this Lease, the remedies
set forth in Section 40A.04 hereof shall be the sole and
exclusive remedies available to Landlord in the event that
Tenant breaches any of its obligations under this Article 40A,
and no other remedies, including, without limitation, the
remedies set forth elsewhere in this Lease for defaults by
-236-
<PAGE>
Tenant in the performance of its obligations under this Lease,
shall be applicable to a breach by Tenant of any of its
obligations under this Article 40A.
Section 40A.09. Right to Dispute Determinations of
Deputy Mayor. Nothing contained herein shall be construed to
limit in any manner whatsoever Tenant's right or ability to
challenge or seek to enjoin, overturn, set aside or modify any
action taken, determination made or penalty imposed by the
Deputy Mayor pursuant to the provisions of this Article 40A.
-237-
<PAGE>
ARTICLE 41
EMPLOYMENT REPORTING AND REQUIREMENTS
Section 41.01 Employment Reporting and Requirements.
(a) Within seven (7) days after execution of
this Lease, Tenant, if it has not already done so, shall
complete and deliver to the City a questionnaire, on the form
attached hereto as Exhibit N, or such other employment
reporting form requiring the provision of substantially similar
information and detail as may be adopted and widely used by the
City and its agencies, setting forth, in substance, how many
and what types of jobs Tenant in good faith estimates will be
transferred to or created at the Premises as of the Operational
Date (the "Questionnaire"). In addition, with respect to each
fiscal year of the City (i.e., July 1 through June 30)
beginning with the fiscal year in which the Operational Date
occurs and ending with the fiscal year in which occurs the
seventh (7th) anniversary of the Possessory Date, Tenant shall,
not later than the September 15th following each such fiscal
year, complete the Questionnaire with respect to jobs at the
Premises during such fiscal year. Landlord acknowledges that
the number and types of jobs to be set forth on the initial
Questionnaire by Tenant will represent Tenant's good faith
expectation based upon manning levels, conditions, technology
and collective bargaining agreements in effect as of the date
of such initial Questionnaire. Landlord acknowledges that
Tenant has made no representation as to the number of jobs
-238-
<PAGE>
expected to be retained and/or created at the Premises under
conditions resulting from future technological advances or
modifications to existing collective bargaining agreements or
new collective bargaining agreements that may become effective
during the term of this Lease.
(b) Tenant acknowledges that the submission of
the Questionnaire regarding the number and types of jobs
retained and/or created at the Premises is of material concern
to Landlord and agrees that Tenant's covenants in this Article
41 are a material inducement for Landlord to enter into this
Lease.
(c) Tenant acknowledges that if Tenant should
fail to observe the covenants contained in this Article 41,
Landlord shall be entitled to injunctive relief, which shall be
its exclusive remedy.
-239-
<PAGE>
ARTICLE 42
APPOINTMENT OF LEASE ADMINISTRATOR
Section 42.01. Appointment of Lease Administrator.
Landlord hereby appoints EDC as Lease Administrator, to act as
Landlord's agent, with full authority to bind Landlord, to
administer this Lease on behalf of Landlord for the duration of
the Term. The appointment of EDC as Lease Administrator shall
not be construed as an assignment of Landlord's interest in
this Lease or as releasing Landlord from any of its obligations
hereunder. For purposes of this Article 42, EDC shall be
deemed to include any affiliated entity of EDC that is
controlled by EDC and designated by EDC to act as Lease
Administrator.
Section 42.02. Revocation of Appointment. Landlord
shall have the right to revoke its appointment of EDC as Lease
Administrator at any time during the Term; provided, however,
that no such revocation shall be binding upon Tenant until the
Business Day following Tenant's receipt of written notification
from Landlord that Landlord has revoked its appointment of EDC
as Lease Administrator.
Section 42.03. Binding Nature of Lease
Administrator's Actions. For so long as Tenant has not become
bound by any revocation of Landlord's appointment of EDC as
Lease Administrator pursuant to the provisions of Section
-240-
<PAGE>
42.02, Landlord shall be fully bound by and liable for any act
or omission by EDC in connection with this Lease (without
regard to whether such act or omission may conflict with or
exceed the authority granted by Landlord to Lease Administrator
pursuant to any oral understanding or written agreement, unless
and from and after the date that Tenant has received written
notice from Landlord of any limitation on EDC's authority)
including, without limitation: (i) any notice, approval,
determination, consent, or withholding of approval or consent,
given or rendered by EDC, (ii) any failure by EDC to act within
any time period specified in this Lease, (iii) any failure by
EDC to cause the Possessory Date to occur in accordance with
the terms of this Lease or (iv) any other failure by EDC to
perform any act or refrain from any act in accordance with the
provisions of this Lease, in each case with the same force and
effect as if such act or omission by Lease Administrator had
been performed or omitted by Landlord. Nothing contained
herein shall be deemed to grant to Landlord any right to cure
any act or omission of EDC or any entitlement to any extension
of any time period contained in this Lease.
Section 42.04. Obligation of Landlord to Perform
Certain Acts. Landlord and Tenant acknowledge and agree that
certain acts to be performed by Landlord hereunder may not be
susceptible of being performed by EDC on behalf of Landlord.
Such acts shall include, but shall not be limited to the
-241-
<PAGE>
execution of the Agreement of Sale and Purchase, a deed, and
certain other documents in connection with Tenant's exercise of
its option to purchase the Property pursuant to Article 21
hereof. Notwithstanding anything to the contrary contained
herein, Tenant shall be under no obligation whatsoever to
notify Landlord of any acts required to be performed hereunder
that are not susceptible of being performed by Lease
Administrator on Landlord's behalf, and to the extent that
Tenant is required pursuant to any provision of this Lease to
give Landlord notice of the requirement to perform any such
acts, the giving of notice by Tenant to Lease Administrator
shall be deemed sufficient and binding in all respects upon
Landlord.
-242-
<PAGE>
ARTICLE 43
MISCELLANEOUS
Section 43.01. Captions. The captions of this Lease
are for the purpose of convenience of reference only, and in no
way define, limit or describe the scope or intent of this Lease
or in any way affect this Lease.
Section 43.02. Table of Contents. The Table of
Contents is for the purpose of convenience of reference only,
and is not to be deemed or construed in any way as part of this
Lease.
Section 43.03. Reference to Landlord and Tenant. The
use herein of the neuter pronoun in any reference to Landlord
or Tenant shall be deemed to include any individual Landlord or
Tenant, and the use herein of the words "successors and
assigns" or "successors or assigns" of Landlord or Tenant shall
be deemed to include the heirs, legal representatives and
assigns of any individual Landlord or Tenant.
Section 43.04. Person Acting on Behalf of a Party
Hereunder. If more than one Person is named as, or becomes a
party hereunder, the other party may require the signatures of
all such Persons in connection with any notice to be given or
action to be taken hereunder by the party acting through such
Persons. Each Person acting through or named as a party shall
be fully and jointly and severally liable for all of such
party's obligations hereunder. Any notice by a party to any
-243-
<PAGE>
Person acting through or named as the other party shall be
sufficient and shall have the same force and effect as though
given to all Persons acting through or named as such other
party.
Section 43.05. Comptroller's Statutory Right of
Audit. Nothing contained in this Lease shall be construed to
affect, expand, diminish, impair or compromise the statutory
right of the Comptroller of the City set forth in Section 93(b)
of the New York City Charter, nor shall anything contained in
this Section 43.05 be construed to impose, affect or expand in
any manner whatsoever any obligations of Tenant beyond those
obligations specifically set forth elsewhere in this Lease.
Section 43.06. Limitation on Liability.
(a) Landlord's Exculpation. Except as
specifically set forth to the contrary in this Section
43.06(a), there shall be no limitation on the liability of
Landlord, or any other Person who has at any time acted as
Landlord hereunder, for damages or otherwise in connection with
this Lease. In the event that it is determined by a court of
competent jurisdiction that Landlord is liable to Tenant for
damages or otherwise in connection with this Lease (the amount
of such damages or otherwise determined to be the liability of
Landlord is hereinafter referred to as "Landlord's Liability
Amount"), then, notwithstanding anything to the contrary
contained herein, Landlord's Liability Amount shall be payable
as follows: (i) for a period not to exceed five (5) years from
-244-
<PAGE>
the date of determination of Landlord's Liability Amount,
Tenant shall take an offset against Rental (exclusive of
Impositions and the College Point Improvement Fund Payments)
with respect to all or such portion of Landlord's Liability
Amount (the "Offset Liability Portion") which, with interest at
the rate of eight percent (8%) per annum, and taking into
account such factors as whether Tenant is entitled to any other
offsets against Rental and the number of years remaining in the
Term, may be offset over a period not to exceed five (5) years,
and (ii) the excess of Landlord's Liability Amount over the
Offset Liability Portion (the "Remaining Liability Portion")
shall be due and payable by Landlord to Tenant immediately upon
the determination of Landlord's Liability Amount. In the event
that Tenant exercises its option to purchase the Property
pursuant to Article 21 hereof, the Purchase Price shall be
reduced by any unpaid portion of Landlord's Liability Amount
and the excess, if any, of such unpaid portion over the
Purchase Price shall be due and payable by Landlord to Tenant
within forty-five (45) days after the final determination of
the Purchase Price and any adjustments thereto. In the event
that either (i) this Lease is terminated for any reason other
than the exercise by Tenant of its option to purchase the
Property or (ii) Tenant shall become entitled to any additional
right of offset against all or any portion of Rental pursuant
to the terms of this Lease, then Tenant shall pay to Tenant,
within forty-five (45) days thereafter, any unpaid portion of
-245-
<PAGE>
Landlord's Liability Amount; provided, however, that if the
remainder of the Term is of sufficient duration to permit such
additional offset to be taken after offsetting the Offset
Liability Portion, Landlord may elect, as an alternative to the
immediate payment of the remainder of Landlord's Liability
Amount, to have such additional right of offset accrue interest
at the rate of eight percent (8%) per annum and thereafter be
offset immediately after the full amount of the Offset
Liability Portion has been fully offset. None of the
directors, officers, partners, principals, shareholders,
employees, agents or servants of Landlord shall have any
liability (personal or otherwise) hereunder or be subject to
levy, execution or other enforcement procedure for the
satisfaction of any remedies of Tenant available hereunder.
(b) Tenant's Exculpation. Notwithstanding
anything to the contrary in this Lease, except for (i)
liability for conversion, fraud, fraud of creditors, breach of
trust or intentional damage to the Premises, (ii) liability of
Tenant for Rental due or accrued and unpaid, (iii) liability of
Tenant to Indemnitees pursuant to Article 20, (iv) all other
obligations of Tenant hereunder which are expressly provided
herein to survive termination of this Lease; and (v) any
non-monetary rights or remedies in equity, Tenant's liability
hereunder for damages or other monetary amounts or otherwise by
reason of any Default, Event of Default or breach under this
Lease, or any other claim against Tenant arising under this
-246-
<PAGE>
Lease, shall be limited to Tenant's interest in the Premises,
including, without limitation, rents or profits collectible but
not yet collected, the proceeds of any insurance policies
payable to Tenant covering or relating to the Premises, any
awards payable to Tenant in connection with any condemnation of
the Premises or any part thereof, and any other rights,
privileges, licenses, franchises, claims, causes of action or
other interests, sums or receivables appurtenant to the
Premises. None of the directors, officers, principals,
partners, shareholders, employees, agents, or servants of
Tenant shall have any liability (personal or otherwise) under
this Lease. No property or assets of Tenant or any of the
directors, officers, partners, principals, venturers,
shareholders, employees, agents or servants of Tenant shall be
subject to levy, execution or any other enforcement procedure
for the satisfaction of Landlord's remedies or claims arising
under this Lease. This Section shall survive the Expiration
Date.
(c) Governs Lease. The provisions of this
Section 43.06 shall govern every other provision of this Lease.
The absence of explicit reference to this Section 43.06 in any
particular provision of this Lease shall not be construed to
diminish the application of this Section 43.06 to such
provision. This Section 43.06 shall survive the Expiration Date.
(d) Other Remedies. Nothing in this Section
43.06 is intended to limit the remedies available to any party
-247-
<PAGE>
under this Lease other than in the manner and to the extent
provided in this Section 43.06. Nothing in this Section 43.06
is intended to prevent or preclude a party from obtaining
injunctive or declaratory relief with respect to any claim
arising under this Lease or in connection with the Premises.
Section 43.07. Remedies Cumulative. Each right and
remedy of Landlord or Tenant provided for in this Lease shall
be cumulative and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Landlord or Tenant of
any one or more of the rights or remedies provided for in this
Lease or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or
later exercise by Landlord of any or all other rights or
remedies provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise.
Section 43.08. Merger. Unless Landlord, Tenant and
all Mortgagees sign and record an agreement to the contrary,
there shall be no merger of this Lease or the leasehold estate
created hereby with the fee estate in the Premises or any part
thereof by reason of the same Person acquiring or holding,
directly or indirectly, this Lease and the leasehold estate
created hereby or any interest in this Lease or in such
leasehold estate as well as the fee estate in the Premises.
-248-
<PAGE>
Section 43.09. Performance at Party's Sole Cost and
Expense. The exercise by Landlord or Tenant of any of its
rights, and the rendering and/or performance by Landlord or
Tenant of any of its obligations, shall be at the sole cost and
expense of the party so exercising, rendering or performing
unless expressly provided to the contrary in this Lease.
Section 43.10. Relationship of Landlord and Tenant.
This Lease is not to be construed to create a partnership or
joint venture between the parties, it being the intention of
the parties hereto only to create a landlord and tenant
relationship.
Section 43.11. Waiver, Modification, etc. No
covenant, agreement, term or condition of this Lease shall be
changed, modified, altered, waived or terminated except by a
written instrument of change, modification, alteration, waiver
or termination executed by Landlord and Tenant. No waiver of
any Default shall affect or alter this Lease, but each and
every covenant, agreement, term and condition of this Lease
shall continue in full force and effect with respect to any
other then existing or subsequent Default thereof.
Section 43.12. [Intentionally Omitted].
Section 43.13. Governing Law. This Lease shall be
governed by, and be construed in accordance with, the laws of
the State of New York.
-249-
<PAGE>
Section 43.14. Successors and Assigns. The
agreements, terms, covenants and conditions herein shall be
binding upon, and inure to the benefit of, Landlord and Tenant
and, except as otherwise provided herein, their respective
successors and assigns.
Section 43.15. Publicity. Landlord and Tenant will
consult and cooperate with each other with respect to
(a) any and all press conferences or public
ceremonies held by either of them, or their agents or
representatives, and
(b) any statements or announcements issued by
Landlord or Tenant, or their agents or representatives, to any
news media announcing the execution of this Lease, groundbreaking
for the Project and/or the interim relocation Car Pound and no
publicity announcement or other media release with respect
thereto shall occur without the prior approval of both Lease
Administrator and Tenant; provided, however, that this
provision is not intended to restrict The New York Times
newspaper from reporting any news. Officials of Landlord and
Lease Administrator will have the right to participate in any
press conferences or public ceremonies described in this
Section 43.15.
Section 43.16. [Intentionally Omitted]
Section 43.17. [Intentionally Omitted]
-250-
<PAGE>
Section 43.18. Termination by Tenant. Whenever Tenant
shall have an option to terminate this Lease, such option shall
be exercised by written notice thereof to Landlord; this Lease
shall terminate as otherwise provided in this Lease or, if no
specific provision is made therefor, upon the giving of such
notice. From and after termination of this Lease by Tenant,
except as otherwise specifically provided or with respect to
any provisions specifically stated to survive the Expiration
Date, (a) Tenant shall thereafter have no rights, obligations
or liabilities under this Lease with respect to any period
after the Expiration Date, and (b) Landlord shall have no
further rights, obligations or liabilities under this Lease.
Section 43.19. Hazardous Substances, Etc.
(a) Landlord covenants that it will not place or
permit or suffer to be placed on the Premises any Hazardous
Substances in violation of any Requirements and that if any
Hazardous Substances are placed on the Premises between the
Lease Execution Date and the Possessory Date, Landlord will
take all required clean-up and other remedial action to rid the
Premises of such Hazardous Substances and will indemnify Tenant
against the cost of any required clean-up or other remedial
action required after the Possessory Date by reason of the
presence of such Hazardous Substances placed on the Premises
between the Lease Execution Date and the Possessory Date.
-251-
<PAGE>
(b) Tenant covenants that, from and after the
Possessory Date, it will not place or permit or suffer any
Hazardous Substances to be placed on the Premises in violation
of any Requirements, and that if any Hazardous Substances are
placed on the Premises after the Possessory Date, Tenant will
take all required clean-up and other remedial action to rid the
Premises of such Hazardous Substances and will indemnify
Landlord against the cost of any required clean-up or other
remedial action required after the Possessory Date by reason of
the presence of such Hazardous Substances on the Premises.
(c) The respective rights and obligations of
Landlord and Tenant with respect to any Hazardous Substances
discovered at the Premises that are determined to have been
placed at the Premises prior to the Lease Execution Date shall
be governed by applicable laws in effect at the time of such
discovery, and nothing contained in this Lease shall be
construed as enlarging, diminishing or waiving any of
Landlord's or Tenant's rights, obligations or liabilities
pursuant to such applicable laws.
(d) In the event that (i) any clean-up or other
remedial action to rid the Premises of Hazardous Substances is
undertaken by or on behalf of Landlord or Tenant during the
period commencing on the Possessory Date and ending on the date
after Substantial Completion that Tenant first occupies the
Premises for the conduct of its business, and (ii) such
-252-
<PAGE>
clean-up or other remedial action either (x) is required as the
result of a breach of Landlord's covenant in Section 43.19(a)
hereof or (y) is determined to be the obligation or
responsibility of Landlord as more particularly set forth in
Section 43.19(c) hereof, then, for all purposes of this Lease
including, without limitation, the computation of periods of
abatement of Rental, the Possessory Date shall be recomputed
and deemed to have occurred on the date that is the date of the
Possessory Date as originally calculated, plus the number of
days in the Hazardous Substances Extension Period during which
Tenant is delayed by such clean-up or remedial action in
causing Substantial Completion and/or the Operational Date to
occur. For purposes of this Lease, the term "Hazardous
Substances Extension Period" shall mean the period commencing
on (1) the date on which the need for such clean-up or other
remedial action is discovered, and ending on (2) the date on
which such clean-up or other remedial action is completed.
-253-
<PAGE>
ARTICLE 44
STORM DRAINAGE SYSTEM
Notwithstanding any other provision hereof, if Tenant
shall have submitted to the City's Department of Environmental
Protection, Division of Sewers ("DEP Sewers") a completed site
connection proposal application, in conformance with all of
DEP'S Sewers' rules, regulations and requirements, with respect
to its storm drainage plan for the Project (which drainage plan
assumes that the Project will be an approximately 720,000
square foot building and will not require additional on-site
retention), and DEP Sewers shall not have given final approval
of such application without any revisions or conditions by the
date that is the earlier to occur of (i) two (2) months
following the date on which such submission is deemed complete
by DEP Sewers and (ii) six (6) months after the submission of
such site connection proposal application accompanied by all of
the documents required by the Site Connection Proposal Form
attached hereto at Exhibit O, then Tenant shall have the right
to terminate this Lease upon thirty (30) days notice to
Landlord. Such termination shall be effective upon the
expiration of such thirty (30) day period; provided, however,
that if DEP Sewers gives such final approval within such thirty
(30) day period, Tenant's termination notice shall have no
effect and this Lease shall continue in full force and effect.
-254-
<PAGE>
ARTICLE 45
BROKERS
Each of Landlord and Tenant represents to the other
that it has not dealt with any broker, finder or like entity in
connection with this Lease or the transactions contemplated
hereby, and each party shall indemnify the other against any
claim for brokerage commissions, fees or other compensation by
any Person arising out of any conversations, negotiations or
dealings had by such Person with the indemnifying party in
connection with this Lease or the transactions contemplated
hereby.
-255-
<PAGE>
ARTICLE 46
WHITESTONE ROAD
As a material inducement to Tenant to enter into this
Lease, Landlord hereby grants to Tenant the option to perform
the work necessary to reconstruct, in accordance with New York
City Department of Transportation standards, on behalf of
Landlord, the Whitestone Expressway Service Road between 20th
Avenue and Linden Place, a city street running along the
easterly side of the Premises and along the easterly side of
the premises adjacent to the Premises currently owned by the
United States Postal Service, as such street is more
particularly depicted in Appendix B to Funding Agreement #4
(the "Whitestone Road"), on all of the terms and conditions set
forth in Funding Agreement #4.
-256-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed
this Lease as of the day and year first above written.
THE CITY OF NEW YORK
ATTEST: [SEAL] By:
----------------------------
- -------------------------
City Clerk
Approved as to Form:
- --------------------------
Acting Corporation Counsel
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By:
----------------------------
-257-
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me
----------
personally came , to me known and
known to me to be [a Deputy] Mayor of The City of New York and
the same person who executed the foregoing instrument, and he
or she acknowledged that he or she executed the foregoing
instrument on behalf of the City of New York and pursuant to
the authority vested in him or her.
---------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me
----------
personally came , to me known and
known to me to be the City Clerk of the City of New York, the
corporation described in and which executed the foregoing
instrument, and who being by me duly sworn, deposes and says
that he resides at , New York, New York; that he
knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed
as provided by law; and that he signed his name thereto as City
Clerk by like authority.
--------------------------
Notary Public
-258-
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me
---------
personally came , to me known,
who, being by me duly sworn, did depose and say that he or she
resides at ; that he or she is the
of NEW YORK CITY ECONOMIC DEVELOPMENT
CORPORATION, the corporation described in and which executed
the foregoing instrument; that he or she knows the seal of said
corporation; that the seal affixed to said instrument is such
corporation seal; that it was so affixed by order of the board
of directors of said corporation, and that he or she signed his
or her name thereto by like order.
----------------------------
Notary Public
-259-
<PAGE>
EXHIBIT C
MAXIMUM IMPROVEMENT PILOT
<PAGE>
EXHIBIT C
SCHEDULE OF MAXIMUM IMPROVEMENTS PILOT PAYMENTS (ILLUSTRATIVE)
Maximum Improvements PILOT in Initial Improvements PILOT Period
Deemed Fair Market Value per square foot $ 110.00
Multiply times 45%
= Deemed Assessed Value per square foot $ 49.50
Multiply times Stipulated Tax Rate 10.698%
= Maximum Improvements PILOT per square
foot before abatement $ 5.30
Less: 100% abatement $ 5.30
= Maximum Improvements PILOT per square
foot after abatement $ 0.00
<TABLE> <CAPTION>
Deemed
Fair Market Maximum Maximum
Value Improvements Improvements
per square PILOT per PILOT per
foot sq. foot sq. foot
Maximum Improvements PILOT in (decreases before Percentage $ after
Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement
- ----------------------------------- ---------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Maximum Improvements PILOT before
abatement in Initial Improvements
PILOT Period $5.30 100% $5.30 $0.00
assumed to be tax year 4 $110.00 $5.30 100% $5.30 $0.00
assumed to be tax year 5 $108.90 $5.24 100% $5.24 $0.00
(cont'd on next page)
</TABLE>
<PAGE>
<TABLE> <CAPTION>
Deemed
Fair Market Maximum Maximum
Value Improvements Improvements
per square PILOT per PILOT per
foot sq. foot sq. foot
Maximum Improvements PILOT in (decreases before Percentage $ after
Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement
- ----------------------------------- ---------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
assumed to be tax year 6 $107.81 $5.19 100% $5.19 $0.00
assumed to be tax year 7 $106.73 $5.14 100% $5.14 $0.00
assumed to be tax year 8 $105.67 $5.09 100% $5.09 $0.00
assumed to be tax year 9 $104.61 $5.04 100% $5.04 $0.00
assumed to be tax year 10 $103.56 $4.99 100% $4.99 $0.00
assumed to be tax year 11 $102.53 $4.94 100% $4.94 $0.00
assumed to be tax year 12 $101.50 $4.89 100% $4.89 $0.00
assumed to be tax year 13 $100.49 $4.84 100% $4.84 $0.00
assumed to be tax year 14 $ 99.48 $4.79 100% $4.79 $0.00
assumed to be tax year 15 $ 98.49 $4.74 100% $4.74 $0.00
assumed to be tax year 16 $ 97.50 $4.69 90% of tax $4.27 $0.42
year 15
assumed to be tax year 17 $ 96.53 $4.65 80% of tax $3.79 $0.86
year 15
assumed to be tax year 18 $ 95.56 $4.60 70% of tax $3.32 $1.28
year 15
assumed to be tax year 19 $ 94.61 $4.55 60% of tax $2.84 $1.71
year 15
assumed to be tax year 20 $ 93.66 $4.51 50% of tax $2.37 $2.14
year 15
assumed to be tax year 21 $ 92.72 $4.46 40% of tax $1.90 $2.56
year 15
assumed to be tax year 22 $ 91.80 $4.42 30% of tax $1.42 $3.00
year 15
assumed to be tax year 23 $ 90.88 $4.37 20% of tax $0.95 $3.42
year 15
assumed to be tax year 24 $ 89.97 $4.33 10% of tax $0.47 $3.86
year 15
- 2 -
(cont'd on next page)
<PAGE>
Deemed
Fair Market Maximum Maximum
Value Improvements Improvements
per square PILOT per PILOT per
foot sq. foot sq. foot
Maximum Improvements PILOT in (decreases before Percentage $ after
Remaining Improvements PILOT Period 1%/year) abatement abatement abatement abatement
- ----------------------------------- ----------- ----------- ---------- --------- ------------
assumed to be tax year 25 $ 89.07 $4.29 10% of tax $0.47 $3.82
year 15
assumed to be tax year 26 $ 88.18 $4.25 $0.00 $4.25
assumed to be tax year 27 $ 87.30 $4.20 $0.00 $4.20
assumed to be tax year 28 $ 86.42 $4.16 $0.00 $4.16
assumed to be tax year 29 $ 85.56 $4.12 $0.00 $4.12
assumed to be tax year 30 $ 84.70 $4.08 $0.00 $4.08
assumed to be tax year 31 $ 83.86 $4.04 $0.00 $4.04
assumed to be tax year 32 $ 83.02 $4.00 $0.00 $4.00
</TABLE>
Note: Tenant is entitled to an abatement of the Improvements PILOT for a
total of 25 years from and after the Construction Commencement Date.
The above illustrative schedule assumes:
- construction takes three years (and therefore the first "Tax Year" is
in the City's first fiscal tax year following beginning of
construction).
- Therefore, the first year of the "Remaining Improvements Tax Period"
will be in Tax Year 4.
- 3 -
<PAGE>
EXHIBIT D
MAXIMUM LAND PILOT
<PAGE>
EXHIBIT D
SCHEDULE OF MAXIMUM LAND PILOT
Land PILOT for period from Lease Execution Date
to Possessory Date: $0
Maximum Land PILOT for Initial Land PILOT Period
Site size (in square feet) 1,382,420
Stipulated FMV per square foot $4.50
= Stipulated Fair Market Value $6,220,890
Multiply times 45%
= Stipulated Assessed Value $2,799,401
Multiply times Stipulated Tax Rate 10.698%
Maximum Land PILOT before abatement
in Initial Land PILOT Period $299,480
Less Abatement in Initial Land PILOT Period $100,000
Maximum Land PILOT in each year of
Initial Land PILOT Period $199,480
<TABLE> <CAPTION>
Max. Land PILOT Max. Land PILOT
Before Substantial After Substantial
Completion Date Completion Date
Maximum
Maximum Maximum Land
Land PILOT Land PILOT PILOT
Maximum Land PILOT Before After After
in Remaining Land PILOT Period Abatement Abatement Abatement Abatement Abatement
- ------------------------------ ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Maximum Land PILOT before abatement
in Initial Land PILOT Period $299,480
Plus 4% increase per year of
Remaining Land PILOT Period:*
year 1 311,459 100,000 211,459 200,000 111,459
year 2 323,917 100,000 223,917 200,000 123,917
year 3 336,874 100,000 236,874 200,000 136,874
(cont'd on next page)
* The first such 4% increase to take place as of the beginning on the first full Fiscal
Year (July 1 - June 30) of the Remaining Land PILOT Period.
<PAGE>
Max. Land PILOT Max. Land PILOT
Before Substantial After Substantial
Completion Date Completion Date
Maximum
Maximum Maximum Land
Land PILOT Land PILOT PILOT
Maximum Land PILOT Before After After
in Remaining Land PILOT Period Abatement Abatement Abatement Abatement Abatement
- ------------------------------ --------- --------- --------- --------- ---------
year 4 350,349 100,000 250,349 200,000 150,349
year 5 364,363 100,000 264,363 200,000 164,363
year 6 378,938 100,000 278,938 200,000 178,938
year 7 394,095 100,000 294,095 200,000 194,095
year 8 409,859 100,000 309,859 200,000 209,859
year 9 426,253 100,000 326,253 200,000 226,253
year 10 443,303 100,000 343,303 200,000 243,303
year 11 461,035 100,000 361,035 200,000 261,035
year 12 479,477 100,000 379,477 200,000 279,477
year 13 498,656 100,000 398,656 200,000 298,656
year 14 518,602 n/a n/a 200,000 318,602
year 15 539,346 n/a n/a 200,000 339,346
year 16 560,920 n/a n/a 200,000 360,920
year 17 583,357 n/a n/a 200,000 383,357
year 18 606,691 n/a n/a 200,000 406,691
year 19 630,959 n/a n/a 200,000 430,959
year 20 656,197 n/a n/a 0 656,197
year 21 682,445 n/a n/a 0 682,445
year 22 709,743 n/a n/a 0 709,743
year 23 738,133 n/a n/a 0 738,133
year 24 767,658 n/a n/a 0 767,658
year 25 796,364 n/a n/a 0 796,364
year 26 830,299 n/a n/a 0 830,299
year 27 863,511 n/a n/a 0 863,511
year 28 898,051 n/a n/a 0 898,051
year 29 933,973 n/a n/a 0 933,973
year 30 971,332 n/a n/a 0 971,332
Tenant is entitled to an abatement of Land PILOT for a total of 20 years. Therefore:
Land PILOT during the Remaining Land PILOT
If the Initial Land PILOT Period Lasts: Period will be abated for the first:
1 year 19 years
2 years 18 years
3 years 17 years
4 years 16 years
5 years 15 years
6 years 14 years
7 years 13 years
</TABLE>
- 2 -
(2282J)
<PAGE>
EXHIBIT K
AGREEMENT OF SALE AND PURCHASE
between
,
Purchaser
and
,
Seller
Premises:
Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block
4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281,
p/o Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block
4284, Lot 1, Block 4306, p/o Lot 1 and all of Lot 44,
Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and
Lot 36, Block 4310, Lot 32, Block 4336, Lot 35 and p/o
Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block 4339,
Lot 46, plus demapped portions of 25th Avenue, 28th
Avenue, 138th Street and 139th Street as identified on
the Tax Map for the Borough of Queens, in the County
of Queens, City and State of New York, and assigned
new tentative tax block and lot numbers Block 4282,
Lot 100 for future identification.
<PAGE>
INDEX
ARTICLE SUBJECT PAGE
I Inclusions in Sale 1
II Purchase Price 3
III Closing 4
IV Closing Documents 5
V State of Title 9
VI Violations 10
VII State of New York Gains Tax/
Transfer Taxes 11
VIII Representations, Warranties and
Covenants 17
IX Closing Adjustments 23
X Commissions 25
XI Operations Prior to Closing 26
XII Risk of Loss 27
XIII Conditions to Closing 28
XIV Termination and Remedies 28
XV Notices 31
XVI Intentionally Omitted 33
XVII Miscellaneous 33
<PAGE>
EXHIBIT SUBJECT
A Description of Land
*[B Assignment of Lease]
C Bill of Sale
D Post-Closing Adjustment Letter
E FIRPTA Certificate
F Permitted Encumbrances
G Deed
* To be included at Purchaser's option.
<PAGE>
THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement")
is made as of this day of by and between
THE CITY OF NEW YORK* ("Seller"), a having an
office at , and
("Purchaser"), a , having an office at
.
W I T N E S S E T H:
Seller hereby agrees to sell to Purchaser and
Purchaser hereby agrees to purchase from Seller, upon the terms
and conditions hereinafter set forth, the "Property" (as such
term is defined in Article I hereof).
NOW THEREFORE, in consideration of the premises and of
the mutual covenants and agreements hereinafter set forth, and
subject to the terms and conditions hereof, Seller and
Purchaser hereby covenant and agree as follows:
ARTICLE I
INCLUSIONS IN SALE
1.1. There shall be included in this sale all of
the following (collectively, the "Property"):
* or such municipal entity to which the City of New York may
transfer its interest in the Land pursuant to Section 5.02
of the Lease.
<PAGE>
1.1.1. The land described on Exhibit A annexed
hereto (the "Land").
1.1.2. All rights and appurtenances now or
hereafter pertaining to the Land, including, without
limitation, any and all rights of Seller in and to all
air and development rights, streets, roads, alleys,
easements, streets and ways adjacent to the Land,
strips and gores within or bounding the Land, and
rights of ingress and egress thereto.
1.1.3. The buildings and other improvements
now or hereafter erected or situated on the Land (the
"Building").
1.1.4. All of Seller's right, title and
interest in and to that certain Agreement of Lease
dated as of , 1993, between The City of New
York (the "City") and New York City Economic
Development Corporation with respect to the Property,
which lease was assigned by New York City Economic
Development Corporation to The New York Times Company
(as amended, the "Lease").
1.1.5. All equipment (including, without
limitation, all equipment relating to the printing,
collating, bundling and distribution of newspapers,
-2-
<PAGE>
magazines and other periodicals or printed materials,
all of which equipment is the property of the tenant
under the Lease), furnishings and other tangible
personal property (collectively, the "Personal
Property") now or hereafter placed or installed on or
about the Land or Building now or hereafter and used
as part of or in connection with the Land or Building,
excluding personal property owned by the tenant under
the Lease or by any of its subtenants.
1.1.6. All rights to any award made or to be
made or settlement in lieu thereof for damage to the
Land, Building and Personal Property by reason of
condemnation, eminent domain, exercise of police power
or change of grade of any street.
ARTICLE II
PURCHASE PRICE
2.1. The purchase price (the "Purchase Price")
for the Property shall be the sum of *[SIX MILLION NINE HUNDRED
THOUSAND AND 00/100 THS DOLLARS ($6,900,000.00).]
* Correct Purchase Price to be inserted in the event that
such price has been adjusted pursuant to any applicable
provisions of the Lease.
-3-
<PAGE>
2.2. The Purchase Price shall be paid by Purchaser at
the "Closing" (as such term is defined in Section 3.1 hereof)
by, at Purchaser's election, either wire transfer, or
cashier's, bank, official, or certified check to Seller drawn
on a U.S. money center bank or a bank that is a member of the
New York Clearing House Association (or any successor body of
similar function). If Purchaser elects to pay the Purchase
Price by wire transfer, Seller shall, within one (1) Business
Day after Purchaser's request therefor, notify Purchaser of the
designated recipient of such wired funds together with all
necessary wiring instructions. The term "Business Days" shall
mean any days other than Saturdays, Sundays and all days on
which banking institutions in New York City are authorized by
law or executive order to close.
2.3. Purchaser and Seller agree that no part of the
Purchase Price is allocable to the Personal Property or any
other personal property.
ARTICLE III
CLOSING
3.1. The closing of the transaction which is the
subject of this Agreement (the "Closing") shall be held on the
date (the "Closing Date") which is the later to occur of (x)
* and (y) the third day following the receipt
* Date to be inserted by Purchaser prior to delivery of this
Agreement to Seller, which date shall be not less than
forty-five (45) days after the date of the Purchase Notice
(as such term is defined in Section 21.01(b) of the Lease).
-4-
<PAGE>
by Seller of the Return from the Tax Department (as such terms
are defined in Section 7.1.2 hereof). Purchaser may, at its
option, adjourn the Closing Date one or more times for up to an
aggregate of three hundred sixty-five (365) days by giving
written notice of such adjournments to Seller. The Closing
shall be held at 10:00 A.M. at the office of Bachner, Tally,
Polevoy & Misher, 380 Madison Avenue, New York, New York 10017,
or at the offices of Purchaser's lending institution or such
lending institution's attorneys, or at any other office in New
York City selected by Purchaser, provided that Purchaser gives
Seller notice of such place of Closing at last one day prior to
the Closing.
ARTICLE IV
CLOSING DOCUMENTS
4.1. At the Closing, Seller shall cause to be
delivered to Purchaser the following documents and instruments,
and any other items specified in this Agreement, duly executed
and acknowledged, in recordable form where applicable, and
dated as of the Closing Date:
4.1.1. A Bargain and Sale Deed with Covenant
Against Grantor's Acts containing the covenant
required by Section 13 of the Lien Law of the State of
New York (the "Deed"), substantially in the form
-5-
<PAGE>
attached hereto as Exhibit G, in proper statutory form
for recording, duly executed and acknowledged, subject
to any modifications that may be required by law, by
any title company as a condition of issuing title
insurance (provided that such modifications required
by a title company are commercially reasonable),
and/or in order to make such deed recordable in Queens
County, New York.
*[ 4.1.2. An Assignment of Lease in the form of
Exhibit B annexed hereto, together with originals of
the Lease assigned thereby.]
4.1.3. A Bill of Sale in the form of Exhibit C
annexed hereto.
4.1.4. A Post-Closing Adjustment Letter in the
form of Exhibit D annexed hereto.
4.1.5. The certificate in the form of
Exhibit E annexed hereto (the "FIRPTA Certificate").
* To be included at Purchaser's option.
-6-
<PAGE>
4.1.6. Affidavits and certificates as to facts
within the knowledge of Seller relevant to the
determination by (the "Title
Company") as to the condition of title or the due
performance by Seller of its obligations hereunder.
4.1.7. The New York State Combined Real
Property Transfer Gains Tax Affidavit Real Estate
Transfer Tax Return and Credit Line Mortgage
Certificate (TP-584).
4.1.8. The Real Property Transfer Tax Return
pursuant to Title 11, Chapter 21 of the New York City
Administrative Code.
4.1.9. The Return, as defined in Section
7.1.2, duly executed and acknowledged by Seller.
4.1.10. Subject to the provisions of Article 28
of the Lease, certified checks in payment of the taxes
to be paid by Seller at Closing pursuant to Sections
7.1.2 and 7.2 hereof; provided, however,
notwithstanding the foregoing, if the aggregate amount
of such taxes does not exceed the Purchase Price,
then, at Seller's election, the payment of such taxes
may be made by giving Purchaser a credit against the
Purchase Price.
-7-
<PAGE>
4.1.11. Such other documents as may be
reasonably required by the Title Company to consummate
the transaction which is the subject of this Agreement.
4.1.12. Any other instruments specifically
referred to in this Agreement.
4.2. At the Closing, Purchaser or its designee
shall cause to be delivered to Seller the following documents
and instruments:
4.2.1. The Purchase Price and any other sums
payable by Purchaser at the Closing under any
provisions of this Agreement.
*[ 4.2.2. The Assignment of Lease in the form of
Exhibit B annexed hereto.]
4.2.3. A Post-Closing Adjustment Letter in the
form of Exhibit D annexed hereto.
* To be included at Purchaser's option.
-8-
<PAGE>
ARTICLE V
STATE OF TITLE
5.1. As a condition to Purchaser's obligations at
Closing, Seller's title to the Property shall be marketable and
insurable without excess premium subject only to the liens,
encumbrances and title conditions (hereinafter called the
"Permitted Encumbrances") enumerated on Exhibit F annexed
hereto.
5.2. (a) If there shall be any liens, charges,
easements, agreements of record, encumbrances or other
objections to title other than (i) Permitted Encumbrances or
(ii) those that arose after the Lease Execution Date by reason
other than the acts, negligence, misconduct or failure to act
of Seller or EDC (collectively, "Title Objections"), then
Seller shall take all such actions as may be necessary
(including, without limitation, the commencement of and the
diligent prosecution of legal proceedings and the payment of
money) to remove such Title Objections. If Seller fails to
remove any Title Objection in accordance with the provisions of
the immediately preceding sentence, Purchaser, nevertheless,
may elect (at or prior to the Closing) to consummate the
transaction provided for herein subject to any such Title
Objection as may exist as of the Closing with a credit against
the Purchase Price equal to (y) the sum necessary to remove
such Title Objection(s) which can be satisfied by a liquidated
amount, and (z) the reasonably estimated reduction in the fair
-9-
<PAGE>
market value of the Property resulting from any Title Objection
which cannot be satisfied by the payment of a liquidated
amount; provided, however, that Seller shall remain fully
liable (which liability shall survive the Closing) for the cost
of removing, and shall reimburse Purchaser for any costs,
claims, damages, obligations, liabilities and expenses
(including, without limitation, legal fees and expenses)
incurred by Purchaser with respect to such Title Objections.
If Purchaser shall not so elect, the provisions of Article XIV
("Termination and Remedies") hereof shall be applicable.
(b) If there shall be any Title Objections
other than those that may be removed by the payment of an
ascertainable sum of money, then, Seller, if it so elects,
shall be entitled to a reasonable adjournment of the Closing
(but in no event more than ninety (90) days) in order to
attempt to remove any such Title Objections. If after such
reasonable period Seller is unable to remove any such Title
Objections, the provisions of Section 5.2(a) and Article XIV
("Termination and Remedies") hereof shall apply.
ARTICLE VI
VIOLATIONS
6.1. All notes or notices of violations of law or
municipal ordinances, orders or requirements noted or issued by
any governmental authority having jurisdiction against or
affecting the Property as the result of the act or omission of
-10-
<PAGE>
Seller, the City of New York, any person or entity acting as
the managing agent of Seller's interest in the Lease, or any of
its or their employees, contractors or agents, and not the
responsibility of the tenant under the Lease, shall be complied
with by Seller and removed of record.
ARTICLE VII
STATE OF NEW YORK GAINS TAX/TRANSFER TAXES
7.1. New York State Real Property Transfer Gains
Tax ("Gains Tax"). Subject to the provisions of Article 28 of
the Lease and Seller's rights pursuant to Section 4.1.10 hereof:
7.1.1. If Seller is the City, and New York
State Tax Law Section 1443.3(a) (or any successor or
replacement provision granting a similar exemption
from Gains Tax for transfers by the City) is then in
effect, then at the Closing Seller shall properly
execute and deliver to Purchaser a New York State Form
TP-584 (Combined Real Property Gains Tax Affidavit,
Real Estate Transfer Tax Return and Credit Line
Mortgage Certificate) (or successor or replacement
form) indicating in Schedule B thereof that the
conveyance of the Property to Purchaser is exempt as a
transfer by a governmental entity, and Seller shall
not be obligated to pay any Gains Tax at Closing, nor
shall Purchaser be obligated to complete, deliver or
file a Transferee Questionnaire (as defined in Section
-11-
<PAGE>
7.1.2 hereof), but Seller's indemnity obligations
under Sections 7.1.2 and 7.3 hereof, and under Section
3.08 of the Lease, shall continue unaffected.
7.1.2. If Section 7.1.1 hereof is
inapplicable, then Purchaser shall cause to be
delivered to Seller the New York State Real Property
Transfer Gains Tax Questionnaire Transferee (TP-581)
or any successor questionnaire or replacement form
thereof with all relevant information completed
thereon (hereinafter called the "Transferee
Questionnaire"), such Transferee Questionnaire duly
executed by Purchaser and acknowledged. Seller shall,
within ten (10) days after it has received from
Purchaser the duly executed and acknowledged
Transferee Questionnaire, submit (x) such Transferee
Questionnaire, (y) the New York State Real Property
Transfer Gains Tax Questionnaire Transferor (TP-580)
or any successor questionnaire or replacement form
thereof with all relevant information completed
thereon and duly executed by Seller and acknowledged
(hereinafter called the "Transferor Questionnaire"),
and (z) all other documentation required in connection
therewith. Seller shall pay when due any Gains Tax,
penalties, interest and additions to the tax imposed
pursuant to Article 31-B of the Tax Law of the State
of New York or any successor statute thereto
-12-
<PAGE>
(hereinafter called the "Gains Law") on the sale of
the Property by Seller to Purchaser as set forth
herein. Seller shall, concurrently with its delivery
of same to the State of New York Department of
Taxation and Finance (the "Tax Department"), deliver
to Purchaser a copy of Seller's transmittal letter
enclosing the documentation delivered by Seller to the
Tax Department in connection with the transaction
which is the subject of this Agreement. Seller shall,
promptly after its receipt of same from the Tax
Department, deliver to Purchaser copies of any
documentation received by Seller from the Tax
Department in connection with the transaction which is
the subject of this Agreement; provided, however, if
Seller receives the original New York State Real
Property Transfer Gains Tax Tentative Assessment and
Return, Transferee Copy (TP-582.2) or any successor
form thereto from the Tax Department, then Seller
shall, promptly after its receipt of same, deliver to
Purchaser the original of such document. Seller shall
deliver to the Title Company at the Closing the
original New York State Real Property Transfer Gains
Tax Tentative Assessment and Return, Transferor Copy
(TP-582) or any successor form thereto executed by
Seller and acknowledged. If a tax is stated as due in
the New York State Real Property Transfer Gains Tax
Tentative Assessment and Return (TP-582) or any
-13-
<PAGE>
successor form thereto (hereinafter called the
"Return"), then at the Closing Seller shall deliver to
the Title Company a certified check payable to the
order of the Tax Department for the full amount of the
tax due as set forth therein (or, if greater, the
amount shown on the New York State Real Property
Transfer Gains Tax Supplemental Return (TP-583) or any
successor form thereto (hereinafter called the
"Supplemental Return")), and, if the amount of
consideration (as defined for purposes of the Gains
Law) payable to Seller for the Property has changed
from the amount stated on the Transferee Questionnaire
and Transferor Questionnaire, then Seller shall also
deliver to the Title Company at Closing a completed
Supplemental Return duly executed by Seller and
acknowledged. Seller shall pay the full amount of the
Gains Tax stated on the Return or Supplemental Return
(if greater) at Closing and shall not be entitled to
elect installment payment thereof. Seller further
agrees to pay any additional Gains Tax, interest,
penalties and additions to the tax that may be
assessed after the Closing pursuant to the Gains Law
in connection with the transaction which is the
subject of this Agreement and further agrees to
indemnify and hold Purchaser harmless from and against
any loss or liability including, but not limited to,
attorneys' fees, resulting from Seller's failure to
-14-
<PAGE>
pay any tax, interest, penalty or addition to the tax
alleged to be due pursuant to the Gains Law in
connection with the transaction which is the subject
of this Agreement. Seller shall not assert before any
taxing authority, including but not limited to the Tax
Department, that Seller received as consideration an
amount less than the amount reported as consideration
payable by Purchaser on the Transferee Questionnaire
(or, if greater, the adjusted amount of consideration
utilized in computing Gains Tax due pursuant to the
Return or the Supplemental Return, if applicable), and
Seller hereby indemnifies and holds Purchaser harmless
from and against any loss or liability resulting from
Seller's breach of the foregoing provisions of this
sentence.
7.2. State and City Transfer Taxes. Seller and
Purchaser shall comply with all filing and procedural
requirements applicable under, and Seller shall pay all taxes,
together with all interest, penalties and additions to the tax
applicable thereto, payable in connection with the sale of the
Property pursuant to, (i) Article 31 of the Tax Law of the
State of New York or any successor statute or statutes thereto,
and (ii) Title 11, Chapter 21 of the Administrative Code of the
City of New York or any successor statute or statutes thereto.
Such taxes (to the extent reflected as payable in returns
relating thereto executed by Seller and Purchaser at Closing)
-15-
<PAGE>
shall be paid by Seller's delivery to the Title Company of
certified checks payable to the applicable taxing authority at
Closing. Any additional amounts of such taxes, interest,
penalties or additions to the tax which are, subsequent to the
Closing, determined to be due or assessed shall be paid by
Seller as and when the same are due and payable or are assessed.
7.3. Indemnity. Seller hereby agrees to
indemnify and hold Purchaser harmless from and against any loss
or liability resulting from Seller's failure to pay when due
any tax, together with any interest, penalties, or additions to
the tax alleged to be due in connection with the sale of the
Property pursuant to (i) Article 31-B of the Tax Law of the
State of New York or any successor statute or statutes thereto,
(ii) Article 31 of the Tax Law of the State of New York or any
successor statute or statutes thereto, and (iii) Title 11,
Chapter 21 of the Administrative Code of the City of New York
or any successor statute or statutes thereto. Seller shall
defend any proceedings thereunder relating to the conveyance of
the Property to Purchaser at Seller's sole cost and expense,
and Purchaser shall reasonably cooperate with Seller in
connection therewith at no cost to Purchaser. Seller shall
also reimburse and indemnify Purchaser for all costs and
expenses incurred by Purchaser in defending or prosecuting any
such proceedings by reason of Seller's failure to do so with
reasonable diligence.
-16-
<PAGE>
7.4. Survival. The provisions of this
Article VII shall survive the Closing.
ARTICLE VIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1. In addition to the representations,
warranties and covenants contained in other Articles of this
Agreement, Seller hereby makes the following representations,
warranties and covenants which are true as of the date hereof,
will be true at Closing and, except with respect to subsection
8.1.1, shall survive the Closing:
8.1.1. Seller has good, insurable and
marketable title to the Property, free and clear of
all liens and encumbrances except the Permitted
Encumbrances.
8.1.2. Except for the Lease, and any subleases
or occupancy agreements granted by the tenant under
the Lease, there are no leases or occupancy agreements
affecting the Property.
8.1.3. There are no service, maintenance,
supply or management agreements affecting the Land or
Building as of the date hereof entered into by Seller
or any predecessor-in-interest of Seller.
-17-
<PAGE>
8.1.4. Seller will have no employees engaged
in work at the Property following the Closing.
8.1.5. There shall be no taxes, assessments
(including assessments which may be paid in
installments), College Point Improvement Fund
Payments, payments to any Business Improvement
District or any other amounts whatsoever which are due
and payable or which are to become due and payable or
a lien, or both, on the Property with respect to any
period of time prior to the Closing Date, except for
such amounts that the tenant under the Lease is
obligated to pay pursuant to the terms of the Lease.
8.1.6. Where copies of any documents have been
delivered by Seller to Purchaser pursuant to this
Agreement, such copies:
(i) are exact copies of the originals of
said documents, as executed and delivered by all
of the parties thereto;
(ii) constitute, in each case, the entire
agreement between the parties thereto with
respect to the subject matter thereof, and the
-18-
<PAGE>
original instruments in the form delivered by
Seller to Purchaser are now in full force and
effect, are valid and enforceable in accordance
with their respective terms and no party thereto
is in default and no claim of default by any
party has been made or is now pending and there
does not now exist any default which, after
either the giving of notice or the passing of
time, or both, will or may constitute a default,
or would excuse performance by any party thereto;
and
(iii) have not been changed, modified or
amended except for amendments, if any,
specifically referred to therein, photocopies of
which have been delivered by Seller to Purchaser.
8.1.7. Seller has no knowledge of any pending
or threatened condemnation or similar proceeding
affecting the Property or any portion thereof, or
pending public improvements in or adjoining the
Property which will adversely affect the Property;
provided, however, that Seller shall notify Purchaser
of any such proceeding that it has knowledge of,
without regard to whether such proceeding might have
an adverse effect on the Property.
-19-
<PAGE>
8.1.8. Seller has no knowledge of any pending
or threatened legal action of any kind or character
whatsoever affecting Seller or the Property which will
adversely affect the Property upon or subsequent to
the Closing.
8.1.9. Each person executing and delivering
this Agreement and all documents to be executed and
delivered on behalf of Seller in regard to the
consummation of the transaction which is the subject
of this Agreement represents to Purchaser that he or
she has due and proper authority to execute and
deliver same. Seller has the full right, power and
authority to sell and convey the Property to Purchaser
as provided in this Agreement and to carry out its
obligations set forth in this Agreement. The
consummation by Seller of the transaction which is the
subject of this Agreement will not conflict with or
result in a breach of any of the terms of any
agreement or instrument to which Seller is a party or
by which Seller is bound or constitute a default
thereunder, and Seller has obtained any and all
required authorizations and approvals of the execution
and delivery of this Agreement, the transaction which
is the subject of this Agreement, and all documents
-20-
<PAGE>
referred to in this Agreement. No other party has any
right to purchase the Property, or any part thereof.
8.1.10. Intentionally Omitted
8.1.11. No representation or warranty by Seller
in this Agreement knowingly omits or knowingly will
omit to state a material fact necessary to make any
representation or warranty not misleading.
8.1.12. Seller is not a "foreign person" as
such term is defined in Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended (hereinafter
called the "Code"). In the event that Seller is a
"foreign person", or in the event that Seller fails or
refuses to deliver the FIRPTA Certificate, or in the
event that Purchaser receives notice from any
"transferor's agent" or "transferee's agent" (as such
terms are defined in Section 1445(d) of the Code), or
Purchaser has actual knowledge that, the FIRPTA
Certificate is false, Purchaser shall deduct and
withhold from the Purchase Price a tax equal to 10%
thereof, as required by Section 1445 of the Code. In
the event of any such withholding, the Closing
hereunder shall not be otherwise affected, Purchaser
-21-
<PAGE>
shall remit such amount to and file the required form
with the Internal Revenue Service, and Seller, in the
event of any claimed over-withholding, (i) shall be
limited solely to an action against the Internal
Revenue Service for a refund, and (ii) hereby waives
any right of action against Purchaser on account of
such withholding.
8.1.13. Seller has not done or suffered
anything whereby the Property has been transferred or
encumbered in any way whatsoever except for the
Permitted Encumbrances.
8.1.14. Intentionally Omitted
8.1.15. No air or development rights with
respect to the Property have been transferred or sold,
and no contract to sell such air or development rights
is outstanding, other than this Agreement.
8.1.16. Seller is not now the subject of any
existing, pending, threatened or contemplated
bankruptcy, insolvency or other debtor's relief
proceeding.
-22-
<PAGE>
ARTICLE IX
CLOSING ADJUSTMENTS
9.1. The following are to be adjusted, if
feasible, at the Closing, as of 11:59 p.m. of the day
immediately preceding the Closing Date (the "Adjustment
Date"). If the net effect of the adjustment of the following
is in Seller's favor, then Purchaser shall pay the net amount
thereof to Seller at the Closing. If the net effect of the
adjustment of the following is in Purchaser's favor, then
Purchaser shall be entitled to a credit against the Purchase
Price at the Closing.
9.1.1. The following are to be adjusted in
favor of Seller:
(a) any unpaid Rental (as that term is defined
in and computed in accordance with the provisions of
the Lease);
(b) the EDC Reimbursement Amount or the EDC
Amortized Reimbursement Amount, if any (as such terms
are defined in and computed in accordance with the
provisions of the Lease); and
-23-
<PAGE>
(c) any and all other amounts due and payable to
Seller by the tenant under the Lease through and
including the Adjustment Date pursuant to the
provisions of the Lease.
9.1.2. The following are to be adjusted in
favor of Purchaser:
(a) any amounts paid as Rental under the Lease
which are in excess of the aggregate amount of Rental
payable under the Lease for the period ending on the
Adjustment Date;
(b) the amount of any and all taxes, fees or
other charges whatsoever that Purchaser may be
required to pay, or which may become a lien on the
Property if not paid by Seller, with respect to the
consummation of the transactions contemplated by this
Agreement, without regard to whether such taxes, fees
or other charges may customarily or by law be payable
by a purchaser of property from a municipal or other
governmental entity; and
(c) any and all other amounts payable to the
tenant under the Lease pursuant to the provisions of
-24-
<PAGE>
Funding Agreements #1, #2 or #3 or any provision of
the Lease including, without limitation, any provision
of the Lease providing for an offset against the
Rental due and payable thereunder, it being expressly
understood and agreed by Seller and Purchaser that the
expiration or termination of the Lease shall not in
any way prejudice or diminish Purchaser's right to a
credit against the Purchase Price in the full amount
that the tenant under the Lease would have been
entitled to offset against Rental but for the
expiration or termination of the Lease.
9.2. The parties hereto shall endeavor to prepare
a schedule of adjustments no less than five (5) days prior to
the Closing.
9.3. The parties shall correct any errors in the
adjustments as soon after the Closing as amounts are finally
determined. The parties shall enter into the Post-Closing
Adjustment Letter at the Closing in the form of Exhibit D
annexed hereto.
ARTICLE X
COMMISSIONS
10.1. Seller warrants and represents to Purchaser
that Seller has had no dealings with any broker in connection
-25-
<PAGE>
with this transaction and agrees to indemnify and hold
Purchaser harmless from and against any loss or liability
resulting from any claims of any broker alleging any dealings
with Seller. Purchaser warrants and represents to Seller that
Purchaser has had no dealings with any broker in connection
with this transaction and agrees to indemnify and hold Seller
harmless from and against any loss or liability resulting from
any claims of any broker alleging any dealings with Purchaser.
The provisions of this Section shall survive the Closing.
ARTICLE XI
OPERATIONS PRIOR TO CLOSING
11.1. Seller covenants and agrees that between the
date hereof and the Closing Date, Seller shall:
11.1.1. Not enter into any leases or occupancy
agreements with respect to the Property.
11.1.2. Not create (or agree to create) any
exception to or covenant, restriction, easement or
other lien on or affecting the Property.
11.1.3. Not grant or transfer or permit the
grant or transfer of any interest in the Property
including any air and development rights.
-26-
<PAGE>
11.1.4. Promptly advise Purchaser of any
litigation or governmental proceeding to which Seller
becomes a party affecting the Property. It shall be a
condition precedent to Purchaser's obligation to
accept title, that there shall be no such litigation
or proceeding pending at Closing having a potential
adverse effect upon the Property or Seller's ability
to convey the Property to Purchaser.
ARTICLE XII
RISK OF LOSS
12.1. The risk of loss or damage to the Property
by fire or other casualty shall be borne by Purchaser. In the
event that damage, loss or destruction of the Property or any
part thereof, by fire or other casualty, occurs prior to the
Closing, Purchaser shall nonetheless be required to consummate
the purchase of the Property without any credit against the
Purchase Price.
12.2. If, prior to Closing, any governmental
authority or other entity having condemnation authority shall
institute an eminent domain proceeding or take any steps
preliminary thereto (including the giving of any direct or
indirect notice of intent to institute such proceedings) with
regard to the Land or Improvements, and the same is not
-27-
<PAGE>
dismissed beyond appeal on or before ten (10) days prior to the
Closing Date set forth in this Agreement, Purchaser shall be
entitled to terminate this Agreement in which event, the
applicable provisions of Article 21 of the Lease shall govern.
ARTICLE XIII
CONDITIONS TO CLOSING
13.1. It shall be a condition to Purchaser's
obligation to close the transaction which is the subject of
this Agreement (subject to Purchaser's option, in its sole
discretion, to waive one or more of the following) that each of
Seller's (i) representations and warranties set forth in this
Agreement be true as of the Closing, and (ii) covenants set
forth in this Agreement be satisfied as of the Closing.
ARTICLE XIV
TERMINATION AND REMEDIES
14.1. In the event that any of Seller's
representations or warranties contained in this Agreement are
untrue or if Seller shall have failed to have performed any of
the covenants or agreements contained in this Agreement which
are to be performed by Seller, on or before the date set forth
in this Agreement for the performance thereof, or if any of the
conditions precedent to Purchaser's obligation to consummate
the transaction which is the subject of this Agreement shall
-28-
<PAGE>
have failed to occur, Purchaser may, at its option, elect any
one or more of the following remedies:
(i) rescind this Agreement and terminate the
Lease;
(ii) rescind this Agreement and permit the
Lease to continue in full force and effect in
accordance with the applicable provisions of
Article 21 thereof;
(iii) rescind this Agreement and extend the
term of the Lease in accordance with the applicable
provisions of Article 21 thereof;
(iv) seek to enforce specific performance of
this Agreement and reimbursement of all of Purchaser's
expenses including, without limitation, reasonable
attorney's fees, in connection with any such action
for specific performance;
(v) extend the term of the Lease in
accordance with the applicable provisions of
Article 21 thereof, and seek specific performance of
this Agreement and reimbursement of all of Purchaser's
-29-
<PAGE>
expenses including, without limitation, reasonable
attorney's fees, in connection with any such action
for specific performance; or
(vi) consummate the transaction provided for
herein in accordance with the applicable provisions of
Article 5 hereof.
It is expressly understood and agreed by Seller and Purchaser
that the failure by Purchaser to rescind or terminate this
Agreement for any reason pursuant to this Section shall in no
way waive, alter or modify any rights of Purchaser in regard to
the representations, warranties, covenants and agreements of
Seller set forth in this Agreement.
14.2. If the purchase and sale which is the
subject of this Agreement is not consummated because of
Purchaser's default, Seller's sole remedy shall be
reimbursement by Purchaser for Seller's actual costs and
expenses reasonably incurred in connection with the proposed
purchase (including, without limitation, legal costs, fees and
disbursements and expenses of deed preparation) whether
incurred out-of-pocket or in the form of staff time, Seller
hereby specifically waiving any and all rights which it may
have to any other damages or specific performance of
Purchaser's default under this Agreement.
-30-
<PAGE>
ARTICLE XV
NOTICES
15.1. Except as otherwise provided in this
Agreement, any and all notices, elections, demands, requests
and responses thereto permitted or required to be given under
this Agreement shall be in writing, signed by the party giving
the same or by its attorneys, and shall be deemed to have been
properly given and shall be deemed effective upon being (i)
personally delivered, or (ii) delivered by an express overnight
delivery service with receipt for delivery, or (iii) deposited
in the United States mail, postage prepaid, certified with
return receipt requested, to the other party at the address of
such other party set forth below or at such other address
within the continental United States as such other party may
designate by notice specifically designated as a notice of
change of address and given in accordance herewith; provided,
however, that the time period in which a response to any such
notice, election, demand or request must be given shall
commence on the date of receipt thereof. Personal delivery to
a party or to any officer, partner, agent or employee of such
party at said address shall constitute receipt. Rejection or
other refusal to accept or inability to deliver because of
changed address of which no notice has been received shall also
constitute receipt. Any such notice, election, demand, request
or response shall be addressed as follows:
-31-
<PAGE>
(i) To Seller:
The City of New York
c/o New York City Economic Development
Corporation
110 William Street
New York, New York 10038
Attention: Lease Administration
with a copy to be given
simultaneously to:
EDC General Counsel
New York City Economic Development
Corporation
110 William Street
New York, New York 10038
and to:
The New York City Law Department
100 Church Street
New York, New York 10007
Attention: Chief Economic Development
Division
(ii) To Purchaser:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: *
and to:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: General Counsel
* To be inserted by Purchaser prior to delivery of this
Agreement to Seller. Purchaser may also change the
addresses for notices and copies thereof prior to such
delivery.
-32-
<PAGE>
with a copy to be given
simultaneously to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin D. Polevoy, Esq.
ARTICLE XVI
INTENTIONALLY OMITTED
ARTICLE XVII
MISCELLANEOUS
17.1. This Agreement cannot be changed, modified,
discharged or terminated by any oral agreement or any other
agreement and there cannot be any waiver of the warranties,
representations and covenants expressly contained in this
Agreement unless the same is in writing and signed by the party
against whom enforcement of the change, modification, discharge
or termination is sought.
17.2. This Agreement and the Exhibits annexed
hereto contain the entire agreement between the parties with
respect to the subject matter hereof, and no promise,
representation, warranty or covenant not included in this
-33-
<PAGE>
Agreement or any such Exhibits has been or is relied upon by
either party hereto.
17.3. The Article and Exhibit headings herein are
for convenience only, and are not to be used in determining the
meaning of this Agreement or any part hereof.
17.4. This Agreement and its interpretation and
enforcement shall be governed by the laws of the State of New
York.
17.5. This Agreement shall be binding on, and the
benefits hereof shall inure to, the successors and assigns of
the parties hereto.
17.6. All Exhibits which are annexed to this
Agreement are part of this Agreement and are incorporated
herein by reference.
17.7. The provisions of this Agreement are for the
sole benefit of the parties to this Agreement and their
successors and assigns and shall not give rise to any rights by
or on behalf of anyone other than such parties.
-34-
<PAGE>
17.8. This Agreement shall be construed without
regard to any presumption or other rule requiring construction
against the party causing this Agreement to be drafted.
17.9. This Agreement may be executed in any number
of counterparts, each of which shall, when executed, be deemed
to be an original and all of which shall be deemed to be one
and the same instrument.
17.10. In the event that any litigation arises
under this Agreement, Purchaser shall be entitled to recover,
as a part of its judgment or settlement, reasonable attorneys'
fees incurred in litigation or settlement discussions to the
extent that such attorneys' fees are incurred after Seller has
failed to perform its obligations hereunder and Purchaser has
made a demand on Seller to cure such failure.
17.11. [Intentionally Omitted]
17.12. Seller will, whenever and as often as it
shall be reasonably requested so to do by Purchaser, and
Purchaser will, whenever and as often as it shall be reasonably
requested so to do by Seller, execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, any and
all conveyances, assignments, correction instruments and all
-35-
<PAGE>
other instruments and documents as may be reasonably necessary
in order to complete the transaction which is the subject of
this Agreement and to carry out the intent and purposes of this
Agreement. All such instruments and documents shall be
reasonably satisfactory to the respective attorneys for
Purchaser and Seller. The provisions of this Section shall
survive the Closing.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed as of the date first above written.
Seller:
By:
-------------------------------
Purchaser:
By:
-------------------------------
-36-
<PAGE>
EXHIBIT A
LAND
ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING
AND BEING IN THE BOROUGH AND COUNTY OF QUEENS, CITY AND STATE
OF NEW YORK, BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE WESTERLY SIDE OF WHITESTONE
EXPRESSWAY DISTANT 1750.00 FEET SOUTHERLY FROM THE CORNER
FORMED BY THE INTERSECTION OF THE SOUTHERLY SIDE OF 20TH AVENUE
AND THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY;
THENCE SOUTHERLY ALONG THE WESTERLY SIDE OF WHITESTONE
EXPRESSWAY, 2,433.07 FEET TO A POINT OF CURVATURE;
THENCE ALONG THE ARC OF A CURVE HAVING A RADIUS OF 25.00 FEET
AND CONNECTING THE EASTERLY SIDE OF LINDEN PLACE WITH THE
WESTERLY SIDE OF WHITESTONE EXPRESSWAY, A DISTANCE OF 48.20
FEET;
THENCE NORTHERLY ALONG THE EASTERLY SIDE OF LINDEN PLACE,
395.44 FEET;
THENCE EASTERLY AT RIGHT ANGLES WITH THE EASTERLY SIDE OF
LINDEN PLACE 235.94 FEET;
THENCE NORTHERLY AT RIGHT ANGLES WITH THE PREVIOUS COURSE 87.58
FEET;
THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 93
DEGREES 05 MINUTES 30 SECONDS WITH THE PREVIOUS COURSE, 335.95
FEET;
THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF
264 DEGREES 30 MINUTES 52 SECONDS WITH THE PREVIOUS COURSE,
752.41 FEET;
THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF
129 DEGREES 24 MINUTES 22 SECONDS WITH THE PREVIOUS COURSE,
1118.19 FEET;
THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 94
DEGREES 50 MINUTES 44 SECONDS WITH THE PREVIOUS COURSE, 652.21
FEET TO THE POINT OR PLACE OF BEGINNING.
<PAGE>
FOR INFORMATION ONLY:
BLOCK 4183 PART OF LOT 1
BLOCK 4242 PART OF LOT 1
BLOCK 4243 PART OF LOT 1
BLOCK 4280 PART OF LOT 1
BLOCK 4281 PART OF LOT 1
BLOCK 4282 LOT 1
BLOCK 4283 LOT 1
BLOCK 4284 LOT 1
BLOCK 4306 PART OF LOT 1 AND ALL OF LOT 44
BLOCK 4307 LOT 1 AND PART OF LOT 4
BLOCK 4308 LOTS 1 AND 36
BLOCK 4310 LOT 32
BLOCK 4336 LOT 35 AND PART OF LOT 50
BLOCK 4337 LOT 62 AND PART OF LOT 76
BLOCK 4339 LOT 46
PLUS DEMAPPED PORTIONS OF 28TH AVENUE, 25TH AVENUE, 138TH
STREET AND 139TH STREET AS IDENTIFIED ON THE TAX MAP OF THE
BOROUGH OF QUEENS, IN THE COUNTY OF QUEENS, CITY AND STATE OF
NEW YORK.
-2-
<PAGE>
EXHIBIT B
ASSIGNMENT OF LEASE
KNOW ALL MEN BY THESE PRESENTS that
, having an office
(the "Assignor"), in consideration of Ten ($10.00) Dollars and
other good and valuable consideration in hand paid, by
, having an office at
(the "Assignee"), the
receipt and sufficiency whereof is hereby acknowledged, hereby
assigns unto Assignee all of Assignor's right, title and
interest in and to that certain Agreement of Lease dated as of
, 1993 between The City of New York and New York City
Economic Development Corporation with respect to Block ,
Lot , on the Tax Map of the Borough of Queens, County of
Queens, City and State of New York (as amended, the "Lease").
TO HAVE AND TO HOLD the same unto Assignee, its
successors and assigns, from and after the date hereof, subject
to the terms, covenants, conditions and provisions contained in
the Lease.
Assignee hereby assumes the performance of all of the
terms, covenants and conditions of the Lease on Assignor's part
to be performed thereunder from and after the date hereof.
Assignor hereby agrees to indemnify and hold Assignee
harmless from and against any and all loss, cost and expense
(including reasonable attorneys' fees), damage and liability
incurred by Assignee as a result of claims brought against
Assignee as Assignor's successor in interest to the Lease
relating to causes of action accruing prior to the date hereof
arising from a breach of the Lease and the obligations of the
lessor thereunder.
IN WITNESS WHEREOF, the parties hereto have executed
this instrument as of the day of .
, Assignor
By:
-------------------------------------------
, Assignee
By:
-------------------------------------------
<PAGE>
EXHIBIT C
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS that
having an office at
("Seller") for and in consideration of the sum of Ten ($10.00)
Dollars and other good and valuable consideration to it in hand
paid, at or before the ensealing and delivery of these presents
by having an office at
("Purchaser"), the receipt
and sufficiency whereof is hereby acknowledged, has transferred
and conveyed and by these presents does release, transfer and
convey unto the Purchaser, its successors and assigns, all of
Seller's right, title, and interest in and to all fixtures,
machinery and equipment to the extent same constitute personal
property, all raw materials, work and materials in process,
stock in trade, inventory and other equipment and other
tangible personal property, and all other tangible personal
property owned by Seller, attached or appurtenant to, or used
in connection with the occupancy and operation of those certain
premises known as Block , Lot , on the Tax Map of the
Borough of Queens, County of Queens, City and State of New York
(the "Premises"). All of the foregoing is herein collectively
called the "Personal Property."
TO HAVE AND TO HOLD, the same unto Purchaser, its
successors and assigns, forever, Seller does hereby bind itself
and its successors to forever warrant and defend the title to
the Personal Property unto Purchaser, its successors and
assigns, against every person whomsoever lawfully claiming, or
to claim the same, or any part thereof.
This transfer is made as part of the transfer of the
Premises to Purchaser and both parties agree and acknowledge
that no part of the consideration is allocated to the Personal
Property.
IN WITNESS WHEREOF, Seller has executed this
instrument as of the day of .
-------------------------------------
<PAGE>
EXHIBIT D
POST-CLOSING ADJUSTMENT LETTER
[Date]
[Purchaser]
Re: Block , Lot , on the Tax Map
of the Borough of Queens, County
of Queens, City and State of
New York (the "Premises")
Gentlemen:
In connection with the closing adjustments made pursuant to
the transfer of title of the Premises by the undersigned to
you, a copy of which closing adjustments is annexed hereto, it
is hereby agreed that if any arithmetic calculations shall
prove to be erroneous, or any adjustment shall be omitted, same
shall be adjusted between you and the undersigned after the
closing. Any such adjustment shall be paid promptly after same
is ascertained. The obligation to correct any erroneous
adjustment or to make any additional adjustment in accordance
with the above shall survive the closing.
Very truly yours,
[Seller]
AGREED TO: By:
-----------------------
[Purchaser]
By:
-----------------------
<PAGE>
EXHIBIT E
Section 1445 of the Internal Revenue Code provides
that a transferee of a U.S. real property interest must
withhold tax if the transferor is a foreign person. To inform
the transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by [name of
transferor], the undersigned hereby certifies the following on
behalf of [name of transferor]:
1. [Name of transferor] is not a foreign
corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax
Regulations);
2. [Name of transferor]'s U.S. employer
identification number is , and
3. [Name of transferor]'s office address is
.
[Name of transferor] understands that this certification may be
disclosed to the Internal Revenue Service by transferee and
that any false statement contained herein could be punished by
fine, imprisonment, or both.
Under penalties of perjury I declare that I have
examined this certification and to the best of my knowledge and
belief it is true, correct and complete, and I further declare
that I have authority to sign this document on behalf of [name
of transferor].
Dated:
- ----------------------------------
[Title]
<PAGE>
EXHIBIT "F"
PERMITTED ENCUMBRANCES
1. Such state of facts as an accurate survey may show
provided the same does not render title unmarketable
or uninsurable without excess premium;
2. Zoning regulations affecting said premises;
3. Any liens, encumbrances or charges made, created or
suffered after December 15, 1993 by reason other than
the acts, negligence, misconduct or failure to act of
Grantor or New York City Economic Development
Corporation or any successors thereto.
4. The Second Amended Urban Renewal Plan for the College
Point II Industrial Development Project, dated
February 1989, with (a) all amendments and
modifications thereto from time to time up to and
including December 15, 1993 (but not subsequent to
December 15, 1993, except as set forth in clause (b)
of this sentence), and (b) any amendments or
modifications thereto after December 15, 1993 with
respect only to landscaping, compliance with which
would not require Grantee to incur a material cost.
5. The 25 foot wide permanent slope easement acquired by
an order dated January 2, 1962 vesting title in The
City of New York pursuant to condemnation proceedings
entitled, "In The Matter of An Application By The City
of New York" relative to acquiring title to a
permanent and perpetual slope easement in connection
with the construction of the Whitestone Expressway, as
shown on The City of New York's Alteration Map Number
4219, dated July 18, 1961, adopted September 22, 1961,
which easement affects a portion of Blocks 4336, 4337,
4339 and 4308 of the Tax Maps of the City of New York,
as shown on Survey No. 67832 made by Robert A. Haynes,
dated August 28, 1990, and last redated December 14,
1993.
<PAGE>
EXHIBIT G
---------
DEED
----
THIS INDENTURE, dated the day of , in the year
between THE CITY OF NEW YORK, a municipal
corporation with an office at City Hall, New York, New York
10007, hereinafter designated as the Grantor, and THE NEW YORK
TIMES COMPANY, a New York State corporation, having its principal
office at 229 West 43rd Street, New York, New York 10036,
hereinafter designated as the Grantee.
WHEREAS, The Mayor of the City of New York, on the 13th day
of January, 1993, as clarified on December 15, 1993, authorized
the sale of the premises hereinafter described.
WHEREAS, the Queens Borough Board by Resolution adopted on
November 16, 1992, as amended on December 14, 1993, approved the
transfer of title therein.
NOW, THEREFORE, WITNESSETH: That the Grantor, in
consideration of the sum of TEN AND 00/100 ($10.00) DOLLARS,
lawful money of the United States, and other valuable
consideration, paid by the Grantee, does hereby grant and release
unto Grantee, its successors and assigns forever:
ALL that certain lot, piece or parcel of land, situate, lying
and being in the Borough of Queens, City and State of New York,
being known and designated as Block 4282, Lot 100*, on the Tax
Map for the Borough of Queens, as more particularly described in
Exhibit A annexed hereto and made a part hereof;
TOGETHER with all buildings and improvements thereon
--------------------
*This block and lot number has been tentatively assigned to
the premises and should be confirmed at the time of the
conveyance.
1
<PAGE>
erected;
TOGETHER with all right, title and interest, if any, of the
Grantor in and to any streets and roads abutting the above
described premises to the center lines thereof;
TOGETHER with the appurtenances and all the estate and
rights of the Grantor in and to said premises;
RESERVING UNTO Grantor a permanent easement, approximately
30 feet wide, running along the portion of the described premises
fronting on the Whitestone Expressway Service Road, more fully
described in Exhibit C attached hereto and made a part hereof.
TO HAVE AND TO HOLD said premises herein granted unto the
Grantee, the successors and assigns of the Grantee forever.
Subject to:
1. The trust fund provisions of Section 13 of the Lien Law;
and
2. Those matters affecting title set forth in Exhibit B
attached hereto.
In the event of acquisition by The City of New York (the
"City") by condemnation or otherwise of any part or portion of
the above described premises lying within the bed of any street,
avenue, expressway, parkway, park, public place or catchbasin, as
shown on the present City Map, the Grantee and the heirs or
successors and assigns of the Grantee shall only be entitled as
compensation for such acquisition by the City to the amount of
One Dollar ($1.00) and shall not be entitled to compensation for
any buildings or structures erected thereon which may lie within
2
<PAGE>
the bed or lines of the street, avenue, parkway, expressway,
park, public place or catchbasin so laid out and acquired. This
covenant shall run with the land and shall continue until the
City Map is amended or changed to eliminate from within the bed
or lines of any street, avenue, parkway, expressway, park, public
place or catchbasin, any such part or portion of the premises and
no longer.
Grantee covenants, on behalf of itself, its successors and
assigns, to use the premises in strict accordance with The Second
Amended Urban Renewal Plan for the College Point II Industrial
Development Project, dated February 1989 (the "Plan"), with (a)
all amendments and modifications thereto from time to time up to
and including December 15, 1993 (but not subsequent to December
15, 1993, except as set forth in clause (b) of this sentence),
and (b) any amendments or modifications thereto after December
15, 1993, with respect only to landscaping, compliance with which
would not require Grantee to incur a material cost. This
covenant shall survive the delivery of this deed and shall run
with the land and continue in effect until said Plan has expired
or is no longer applicable to the premises.
Commencing on the January 1, April 1, July 1 or October 1
first occurring after the date of this deed and thereafter on
each January 1, April 1, July 1, and October 1, Grantee, its
successors or assigns, shall pay to Grantor or its successor or
assign or designee, a sum equal to one-eighth of one percent
(.125%) of the assessed value of the land, and all improvements
3
<PAGE>
thereon, as such assessed value is determined by the City's
Department of Finance for purposes of real property taxation.
Such sum, together with other similar sums paid by owners or
occupants of similarly burdened property within College Point
Industrial Park, shall be held by New York City Economic
Development Corporation ("EDC"), or its successor or assign or
designee, in a separate fund, known as the "College Point
Improvement Fund" (the "Fund"), and shall be used by EDC solely
for construction, maintenance and improvement of (1) roads,
sewers, drainage systems, buffer strips, utilities and sidewalks
within College Point Industrial Park, and (2) other facilities of
general benefit to College Point Industrial Park or portions
thereof, as determined by EDC or its successor or assign or
designee. The obligation to make such payments shall be a
covenant running with the land, enforceable by EDC, or its
successor or assign or designee, and by other owners of property
within College Point Industrial Park burdened by a similar
obligation, and any such payment, once due, shall be a lien upon
the premises. This obligation is for the benefit of the
properties comprising College Point Industrial Park. If there
shall be established within College Point Industrial Park, or a
substantial portion thereof, a Business Improvement District
("BID") pursuant to Article 2-B of the General City Law or any
successor statute thereto, then, if the premises are included
within such BID and charges or assessments with regard to the BID
must be or are paid in connection with the premises and other
4
<PAGE>
properties in such BID burdened by an obligation similar to that
set forth herein (the "Burdened Properties"), in an amount in the
aggregate less than, equal to or greater than the amount that
would be payable to EDC or its successor or assign or designee
for the Fund in connection with the premises and Burdened
Properties, then (i) Grantee shall pay such charges or
assessments and (ii) Grantee shall be released and discharged
from any obligation to make any further payments to the Fund with
respect to any period from and after the date to which Grantee's
first payment to such BID is applicable, and EDC shall promptly
refund to Grantee any portion of any payments to the Fund made by
Grantee which were applicable to any period beyond such date. If
the funds received by the BID in connection with the premises and
the Burdened Properties, in EDC's or its successor's or assign's
or designee's reasonable determination, are devoted to similar
purposes as those to which the Fund is devoted, then the district
management association formed in connection with such BID shall
succeed to EDC's or its successor's or assign's or designee's
functions in connection with the Fund with regard to the area in
such BID, and EDC or its successor or assign or designee shall
transfer moneys within the Fund on hand and attributable to the
properties included within such BID to such district management
association.
Grantee covenants that it will not restrict the use of the
premises upon the basis of race, creed, color, sex or national
origin. Grantee covenants that no covenant, lease, agreement,
5
<PAGE>
conveyance or other instrument shall be effected or executed by
Grantee or any of its heirs, successors or assigns, whereby the
premises are restricted upon basis of race, creed, color, sex or
national origin.
The covenants of the Grantee hereunder shall run with the
land and bind Grantee's successors and assigns.
Grantor covenants that Grantor has not done or suffered
anything whereby the premises have been encumbered in any way
whatever, except as aforesaid.
This Indenture is an absolute conveyance of title in effect
as well as form and is not intended as a mortgage, deed of trust,
trust conveyance or security of any kind.
IN WITNESS WHEREOF, the Grantor and the Grantee have caused
their corporate seals to be hereunto affixed and these presents
to be signed by their duly authorized officers, the day and year
first above written.
THE CITY OF NEW YORK
ATTEST:
By:
--------------------- -------------------------
CITY CLERK
THE NEW YORK TIMES COMPANY
APPROVED AS TO FORM:
By:
--------------------------- --------------------------
Acting Corporation Counsel
c-cpip.dee
6
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me personally
came , to me known, and known to me to be the Deputy
Mayor/Deputy Commissioner, Department of General Services, Division
of Real Property of the City of New York, and the same person who
executed the foregoing instrument; and she/he acknowledged that
she/he executed the foregoing instrument on behalf of the City
of New York as said Deputy Mayor/Deputy Commissioner, pursuant
to the authority vested in her/him.
---------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me personally
came , with whom I am acquainted and known to me to
be the City Clerk of the City of New York, who being by me duly
sworn, deposed and said: that he resides at ,
, ; that he is the City Clerk of the
City of New York, the municipal corporation described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed as provided by law; and
that he signed his name thereto as City Clerk by like authority.
-------------------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , 199 , before me personally
came , to me known, who being by me duly sworn, did
depose and say that he resides at
; that he is the of The
New York Times Company, the corporation described in and which
executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his
name thereto by such authority.
---------------------------------------
<PAGE>
EXHIBIT A
PREMISES
--------
ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING
AND BEING IN THE BOROUGH AND COUNTY OF QUEENS, CITY AND STATE
OF NEW YORK, BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE WESTERLY SIDE OF WHITESTONE
EXPRESSWAY DISTANT 1750.00 FEET SOUTHERLY FROM THE CORNER
FORMED BY THE INTERSECTION OF THE SOUTHERLY SIDE OF 20TH AVENUE
AND THE WESTERLY SIDE OF WHITESTONE EXPRESSWAY;
THENCE SOUTHERLY ALONG THE WESTERLY SIDE OF WHITESTONE
EXPRESSWAY, 2,433.07 FEET TO A POINT OF CURVATURE;
THENCE ALONG THE ARC OF A CURVE HAVING A RADIUS OF 25.00 FEET
AND CONNECTING THE EASTERLY SIDE OF LINDEN PLACE WITH THE
WESTERLY SIDE OF WHITESTONE EXPRESSWAY, A DISTANCE OF 48.20
FEET;
THENCE NORTHERLY ALONG THE EASTERLY SIDE OF LINDEN PLACE,
395.44 FEET;
THENCE EASTERLY AT RIGHT ANGLES WITH THE EASTERLY SIDE OF
LINDEN PLACE 235.94 FEET;
THENCE NORTHERLY AT RIGHT ANGLES WITH THE PREVIOUS COURSE 87.58
FEET;
THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 93
DEGREES 05 MINUTES 30 SECONDS WITH THE PREVIOUS COURSE, 335.95
FEET;
THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF
264 DEGREES 30 MINUTES 52 SECONDS WITH THE PREVIOUS COURSE,
752.41 FEET;
THENCE NORTHERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF
129 DEGREES 24 MINUTES 22 SECONDS WITH THE PREVIOUS COURSE,
1118.19 FEET;
THENCE EASTERLY ALONG A COURSE FORMING AN INTERIOR ANGLE OF 94
DEGREES 50 MINUTES 44 SECONDS WITH THE PREVIOUS COURSE, 652.21
FEET TO THE POINT OR PLACE OF BEGINNING.
<PAGE>
FOR INFORMATION ONLY:
BLOCK 4183 PART OF LOT 1
BLOCK 4242 PART OF LOT 1
BLOCK 4243 PART OF LOT 1
BLOCK 4280 PART OF LOT 1
BLOCK 4281 PART OF LOT 1
BLOCK 4282 LOT 1
BLOCK 4283 LOT 1
BLOCK 4284 LOT 1
BLOCK 4306 PART OF LOT 1 AND ALL OF LOT 44
BLOCK 4307 LOT 1 AND PART OF LOT 4
BLOCK 4308 LOTS 1 AND 36
BLOCK 4310 LOT 32
BLOCK 4336 LOT 35 AND PART OF LOT 50
BLOCK 4337 LOT 62 AND PART OF LOT 76
BLOCK 4339 LOT 46
PLUS DEMAPPED PORTIONS OF 28TH AVENUE, 25TH AVENUE, 138TH
STREET AND 139TH STREET AS IDENTIFIED ON THE TAX MAP OF THE
BOROUGH OF QUEENS, IN THE COUNTY OF QUEENS, CITY AND STATE OF
NEW YORK.
-2-
<PAGE>
EXHIBIT B
Permitted Title Exceptions
--------------------------
1. Such state of facts as an accurate survey may show
provided the same does not render title unmarketable
or uninsurable without excess premium;
2. Zoning regulations affecting said premises;
3. Any liens, encumbrances or charges made, created or
suffered after December 15, 1993 by reason other than
the acts, negligence, misconduct or failure to act of
Grantor or New York City Economic Development
Corporation or any successors thereto.
4. The Second Amended Urban Renewal Plan for the College
Point II Industrial Development Project, dated
February 1989, together with (a) all amendments and
modifications thereto from time to time up to and
including December 15, 1993 (but not subsequent to
December 15, 1993, except as set forth in clause (b)
of this sentence), and (b) any amendments or
modifications thereto after December 15, 1993 with
respect only to landscaping, compliance with which
would not require Grantee to incur a material cost.
5. The 25 foot wide permanent slope easement acquired by
an order dated January 2, 1962 vesting title in The
City of New York pursuant to condemnation proceedings
entitled, "In The Matter of An Application By The City
of New York" relative to acquiring title to a
permanent and perpetual slope easement in connection
with the construction of the Whitestone Expressway, as
shown on The City of New York's Alteration Map Number
4219, dated July 18, 1961, adopted September 22, 1961,
which easement affects a portion of Blocks 4336, 4337,
4339 and 4308 of the Tax Maps of the City of New York,
as shown on Survey No. 67832 made by Robert A. Haynes,
dated August 28, 1990, and last redated December 14,
1993.
<PAGE>
EXHIBIT C
---------
Proposed Sanitary Sewer Easement
--------------------------------
Legal Description
-----------------
Beginning at a point on the westerly side of Whitestone
Expressway distant 1750.00 feet southerly from the corner
formed by the intersection of the westerly side of Whitestone
Expressway with the southerly side of 20th Avenue;
running thence southerly along the westerly side of Whitestone
Expressway 2433.07 feet to the northerly end of a curve;
running thence along said curve, bearing to the right and
having a radius of 25.00 feet a distance of 44.29 feet;
running thence northerly along a line parallel with the
westerly side of Whitestone Expressway 89.44 feet;
running thence westerly, at right angles with the last
described course, 10.00 feet;
running thence northerly, at right angles to the last described
course, 43.49 feet to a point of curve;
running thence still northerly along the arc of a curve bearing
to the left, having a radius of 3428.00 feet a distance of
16.51 feet;
running thence easterly along a line radial with the last
described course a distance of 10.00 feet;
running thence northerly along the arc of a curve bearing to
the left and having a radius of 3438.00 feet a distance of
1706.27 feet to a point of tangency;
running thence still northerly and parallel with the westerly
side of Whitestone Expressway 590.62 feet;
running thence easterly along a line forming an exterior angle
of 97 degrees, 18 minutes, 41 seconds with the last described
course, 30.25 feet to the westerly side of Whitestone
Expressway at the point or place of beginning.
<PAGE>
<TABLE><CAPTION>
Exhibit M-1 to Lease
As a result of an Abandonment as described in Section 2.4(c)(i-iv) of Funding Agreement #1.
<S> <C> <C> <C>
Assumptions
-----------
Funding Amount (per press)*: Repayment Assumptions:
---------------------------- ----------------------
Phase One (4 presses) $3,000,000 Term of Lease 25
Phase Two (5 presses) $2,250,000 Lesser of: 9.00%
Phase Three (6 presses) $2,250,000 or City's borrowing cost(25 yr bonds) 9.00%
Phase Four (7 presses) $3,750,000 Interest Calculation: Annual
Phase Five (8 presses) $3,750,000
----------
Total $15,000,000
</TABLE>
Examples
--------
Example #1:
-----------
NYT commences Phases One/Two and Three in Year 3, and does not diligently
pursue completion and Abandonment of the Project occurs pursuant to all
of the terms and conditions of Funding Agreement #1.
Phases One/Two/Three Grant: $7,500,000
Example #2:
-----------
NYT commences and substantially completes Phase One Construction in Year 1
and receives capital grant of $3 million. NYT commences Phases Two and Three
Construction in Year 3 and receives capital grant of $4.5 million. In Year 6,
either NYT does not equip the facility or relocates substantially all
employees to Stamford and Abandonment of the Project occurs pursuant to all
of the terms and conditions of Funding Agreement #1.
Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
<PAGE>
<TABLE><CAPTION>
ILLUSTRATIVE REIMBURSEMENT SCHEDULES
Example #1 Example #2
---------- ----------
Year Project Status Principal I Year Project Status Principal I Principal II
---- -------------- ----------- ---- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
End Year 1 Vacant 0 End Year 1 Const/Disbursmnt 3,000,000
2 Vacant 0 2 Const 3,000,000
3 Const/Disbursmnt 7,500,000 3 Const/Disbursmnt 3,000,000 4,500,000
4 Const 7,500,000 4 Construction 3,000,000 4,500,000
5 Const Ceases 7,500,000 5 Construction 3,000,000 4,500,000
6 Const Cease/Abdmnt 7,500,000 6 Relocation/Abdmnt 3,000,000 4,500,000
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
</TABLE>
Reimbursement Amount**:
-----------------------
Example #1
----------
Phase One/Two/Three Grant ($7.5 million) + (7.5 X 9% X 4 Yrs) = $10,200,000
Example #2
----------
Phase One Grant ($3 million) + (3.0 X 9% X 6 Yrs)
+ Phase Two/Three Grant ($4.5 million) + ($4.5 X 9% X 4 yrs) = $10,740,000
Notes:
------
* Assumes full building size. Grant will be reduced in accordance with
Section 2.2(c) of Funding Agreement #1 if building size is reduced.
** Assumes repayment to EDC in one payment; interest for multi-year
repayment not included.
(nytpay4l)
<PAGE>
<TABLE><CAPTION>
Exhibit M-2 to Lease
As a result of an Abandonment as described in Section 2.4(c)(v) of Funding Agreement #1.
Assumptions
Funding Amount (per press)*: Repayment Assumptions:
<S> <C> <C> <C>
Phase One (4 presses) $3,000,000 Term of Lease 25
Phase Two (5 presses) $2,250,000 # Yrs before Abandonment: 5
Phase Three (6 presses) $2,250,000 Lesser of: 9.00%
Phase Four (7 presses) $3,750,000 or City's borrowing cost(25 yr bonds) 9.00%
Phase Five (8 presses) $3,750,000 Interest Calculation: Annual
Total $15,000,000
</TABLE>
Examples:
Example #1 :
NYT commences Phase One Construction in Year 1 and receives capital grant
of $3 million. NYT commences Phases Two and Three Construction in Year 10
and receives capital grant of $4.5 million. NYT ceases operation in Year 14
and does not resume within 5 years and an Abandonment of the Project occurs
pursuant to all the terms and conditions of Funding Agreement #1.
<TABLE>
<S> <C> <C> <C>
Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
Amortization Period: 25 Years Amortization Period: 15 Years
Amount Amortized Annually: 120,000 Amount Amortized Annually: 300,000
</TABLE>
Example #2 :
NYT commences Phase One, Two and Three Construction in Year 1 and receives
capital grant of $7.5 million. NYT operates for 5 years and ceases operation
for 4 years before commencing construction of Phases Four/Five in Year 13.
NYT commences operation but ceases operation in Year 19 and does not resume
within 5 years and an Abandonment of the Project occurs pursuant
to all the terms and conditions of Funding Agreement #1.
<TABLE>
<S> <C> <C> <C>
Phase One Grant: $7,500,000 Phase Four/Five Grant: $7,500,000
Amortization Period: 25 Years Amortization Period: 13 Years
Amount Amortized Annually: 300,000 Amount Amortized Annually: 576,923
</TABLE>
<PAGE>
<TABLE><CAPTION>
ILLUSTRATIVE AMORTIZATION REIMBURSEMENT SCHEDULES
Example #1 Example #2
- ---------- ----------
Year Project Status Principal I Principal II Year Project Status Principal I Principal II
---- -------------- ----------- ------------ ---- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
End Year 1 Const/Disbursmnt 3,000,000 End Year 1 Const/Disbursmnt 7,500,000
2 Const 2,880,000 2 Const 7,200,000
3 Const 2,760,000 3 Const 6,900,000
4 Operation 2,640,000 4 Operation 6,600,000
5 Operation 2,520,000 5 Operation 6,300,000
6 Operation 2,400,000 6 Operation 6,000,000
7 Operation 2,280,000 7 Operation 5,700,000
8 Operation 2,160,000 8 Operation 5,400,000
9 Operation 2,040,000 9 Cease Op-Yr 1 5,100,000
10 Operation/Cont 1,920,000 4,500,000 10 Cease Op-Yr 2 5,100,000
11 Operation/Cont 1,800,000 4,200,000 11 Cease Op-Yr 3 5,100,000
12 Operation 1,680,000 3,900,000 12 Cease Op-Yr 4 5,100,000
13 Operation 1,560,000 3,600,000 13 Const/Operation 4,800,000 7,500,000
14 Cease Op-Yr 1 1,440,000 3,300,000 14 Operation 4,500,000 6,923,077
15 Cease Op-Yr 2 1,440,000 3,300,000 15 Operation 4,200,000 6,346,154
16 Cease Op-Yr 3 1,440,000 3,300,000 16 Operation 3,900,000 5,769,231
17 Cease Op-Yr 4 1,440,000 3,300,000 17 Operation 3,600,000 5,192,308
18 Abndnmnt-Yr 5 1,440,000 3,300,000 18 Operation 3,300,000 4,615,385
19 19 Cease Op-Yr 1 3,000,000 4,038,462
20 20 Cease Op-Yr 2 3,000,000 4,038,462
21 21 Cease Op-Yr 3 3,000,000 4,038,462
22 22 Cease Op-Yr 4 3,000,000 4,038,462
23 23 Abndnmnt-Yr 5 3,000,000 4,038,462
24 24
25 25
</TABLE>
Reimbursement Amount**:
- -----------------------
<TABLE><CAPTION>
Example #1
----------
<S> <C>
Amortized Reimbursement Amount = Phase One: $1,440,000+(($1,440,000 X 9%) X 18 Yrs) = $3,772,800
+ Phase Two/Three: $3,300,000 +(($3,300,000 X 9%) X 9 Yrs) = $5,973,000
----------
TOTAL = $9,745,800
<CAPTION>
Example #2
----------
<S> <C>
Amortized Reimbursement Amount=Phase One/Two/Three:$3,000,000+($3,000,000 X 9%)X23 Yrs= $9,210,000
+ Phase Four/Five: $4,038,462+(($4,038,462 X 9%)X 11 Yrs) = $8,036,538
----------
TOTAL = $17,246,538
</TABLE>
Notes:
------
* Assumes full building or footprint size. Grant will be reduced in
accordance with Section 2.2(c) of Funding Agreement #1 if building or
footprint size, as the case may be, is reduced.
** Assumes repayment to EDC in one payment; no interest for multi-year
repayment included.
(nytpay3L)
<PAGE>
ASSIGNMENT AND
ASSUMPTION OF LEASE
WITH CONSENT
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION,
as Assignor,
to
THE NEW YORK TIMES COMPANY,
as Assignee
Affecting: Block 4183, p/o Lot 1,
Block 4242, p/o Lot 1,
Block 4243, p/o Lot 1
Block 4280. p/o Lot 1
Block 4281, p/o Lot 1,
Block 4282, Lot 1,
Block 4283, Lot 1,
Block 4284, Lot 1,
Block 4306, Lot 44 and p/o Lot 1
Block 4307, Lot 1 and p/o Lot 4
Block 4308, Lot 1 and Lot 36
Block 4310, Lot 32
Block 4336, Lot 35 and p/o Lot 50
Block 4337, Lot 62 and p/o Lot 76
Block 4339, Lot 46
and demapped portions of 25th Avenue, 28th Avenue,
138th Street and 139th Street
Borough of Queens, New York
Assigned Tentative Block 4282, Lot 100 for
future identification
Record and Return to:
Frieda Dweck
New York City Economic
Development Corporation
110 William Street
New York, New York 10038
<PAGE>
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("this Agreement")
made as of December 15, 1993, between NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION ("Assignor"), a local development
corporation organized pursuant to Section 1411 of the
Not-for-Profit Corporation Law of the State of New York, having
an office at 110 William Street, New York, New York 10038, and
THE NEW YORK TIMES COMPANY ("Assignee"), a corporation organized
under the laws of the State of New York, having an address at 229
West 43rd Street, New York, N.Y. 10036.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, The City of New York ("Landlord"), as landlord, and
Assignor, as tenant, have, as of the date hereof, entered into a
lease (the "Lease") under which Landlord demised and leased to
Assignor, and Assignor hired and let from Landlord, certain
premises identified as Block 4183, p/o Lot 1, Block 4242, p/o Lot
1, Block 4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o
Lot 1, Block 4282, Lot 1, Block 4283, Lot 1, Block 4284, Lot 1,
Block 4306, Lot 44 and p/o Lot 1, Block 4307, Lot 1 and p/o Lot
4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32, Block 4336,
Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block
4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue,
138th Street and 139th Street, on the Tax Map of the Borough of
Queens, and assigned new tentative tax block and lot numbers
Block 4282, Lot 100 for future identification,which premises are
more particularly described in Attachment A hereto; and
WHEREAS, a memorandum of the Lease is to be recorded
simultaneously with the recording of this Agreement, in the
Office of the City Register of Queens County, New York; and
WHEREAS, Assignor desires to assign, and Assignee desires to
acquire, all of Assignor's right, title and interest in and to
the Lease as contemplated thereby;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, the parties hereto, intending to be
legally bound, covenant and agree as follows:
1. Assignor assigns, transfers and sets over to
Assignee from and after the date hereof, all of Assignor's right,
title and interest in and to the Lease, to have and to hold for
all the rest, residue and remainder of the term of the Lease.
2. Assignor represents that: (i) there is no existing
default under the Lease by Assignor; (ii) Assignor is the sole
tenant under the Lease; (iii) the Lease is in full force and
effect; (iv) all rent and other charges reserved in, or to be
paid by the tenant under the Lease have been paid to the extent
the same were payable as of the date hereof; (v) the Lease has
not been assigned or modified or amended in any respect
whatsoever; (vi) Assignor has full and lawful authority to assign
the Lease; and (vii) the Lease embodies the entire agreement and
understanding between the parties thereto with respect to the
2
<PAGE>
premises demised thereunder.
3. Assignor agrees, at its sole cost, to do, execute,
acknowledge and deliver or to cause to be done, executed
acknowledged and delivered, all such acts and instruments as may
from time to time be reasonably required by Assignee or Landlord
to further assure and effectuate the assignment and transfer to
Assignee of the interest of Assignor hereby assigned and
transferred, or intended to be hereby assigned and transferred.
4. Assignee represents and warrants that it is a
corporation organized under the laws of the State of New York.
5. Assignee assumes the obligations of the tenant
under the Lease from and after the date hereof and Assignee
agrees to perform and observe all of the covenants and conditions
therein contained on Assignor's part to be performed and
observed, and Assignee makes all of the representations and
warranties binding upon the tenant under the Lease, with the same
force and effect as if Assignee had executed the Lease originally
as tenant.
6. Nothing contained herein shall be construed to
modify, waive, impair or affect any of the covenants, agreements,
terms, provisions or conditions contained in the Lease.
7. Assignee shall cause this instrument and a
memorandum of the Lease to be recorded immediately at Assignee's
expense in the Office of the City Register, Queens County, New
York and also shall cause a copy of this instrument and such
memorandum of the Lease, as recorded, to be transmitted to the
General Counsel of Assignor.
8. This Agreement may not be changed, modified,
discharged or terminated orally or in any other manner except by
an agreement in writing signed by the parties hereto or their
respective successors and permitted assigns.
9. All representations, warranties, grants,
covenants, terms and provisions of this Agreement shall apply to,
bind and inure to the benefit of the respective successors and,
to the extent permitted under the Lease, the respective assigns,
of Assignor, Assignee and Landlord.
10. Landlord hereby consents to the foregoing
assignment of the Lease by Assignor to Assignee.
3
<PAGE>
11. This Agreement is subject to the trust fund
provisions of Section 13 of the Lien Law.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By: /s/ Carl Weisbrod
-------------------------------
Carl Weisbrod, President
THE NEW YORK TIMES COMPANY
By: /s/ Katharine P. Darrow
-------------------------------
Name: Katharine P. Darrow
Title: Senior Vice President
THE CITY, BY SIGNING IN THE PLACE
PROVIDED BELOW, CONSENTS TO THIS
ASSIGNMENT, AS SET FORTH IN
PARAGRAPH 10 HEREOF:
THE CITY OF NEW YORK ATTEST: [SEAL]
By: /s/ Barry F. Sullivan /s/
------------------------------ -------------------------
City Clerk
APPROVED AS TO FORM:
By: /s/
------------------------------
Acting Corporation Counsel
4
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 17th day of December 1993, before me personally came
Carl Weisbrod, who being by me duly sworn, did depose and say
that he resides at 110 William Street, New York, NY 10038,
that he is the President of NEW YORK CITY ECONOMIC DEVELOPMENT
CORPORATION, the corporation described in and which executed
the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of
directors of said corporation; and that he signed his name
thereto by like order.
/s/ Concetta Miele
______________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 17th day of December, 1993, before me personally
came Katharine P. Darrow to me known, who, being by me duly
sworn, did depose and say that she/he resides at
16 Garden Place, Brooklyn, NY; that she/he is the Senior
Vice President of THE NEW YORK TIMES COMPANY, the corporation
described in and which executed the foregoing instrument;
that she/he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the board of directors of
said corporation; and that she/he signed her/his name
thereto by like order.
/s/ Beverly Sturr
___________________________________
NOTARY PUBLIC
5
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 17th day of December 1993, before me personally came
Barry F. Sullivan, who being by me duly sworn, did depose and
say that he resides at c/o City Hall, New York, New York,
that he is the Deputy Mayor of THE CITY OF NEW YORK
and the same person who executed the foregoing instrument; and
that he acknowledged that he signed his name thereto on behalf of
The City of New York and pursuant to the authority vested in him.
/s/ Concetta Miele
______________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 17th day of December 1993, before me personally
came ________________________________________, to me
known and known to me to be the City Clerk of The City of New
York, the corporation described in and which executed the
foregoing instrument, being by me duly sworn, did depose and say
that she/he resides at 750 Kappock Street, Brooklyn, NY 10463;
that she/he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed as provided by law; and that she/he signed
her/his name thereto as City Clerk by like authority.
/s/ Concetta Miele
______________________________
Notary Public
6
<PAGE>
ATTACHMENT A
LAND
----
The land consists of the following property, described in the
survey performed by Robert A. Haynes, dated August 28, 1990, as
follows:
BEGINNING at a point on the westerly side of Whitestone
Expressway distant 1750 feet southerly from the corner formed by
the intersection of the southerly side of 20th Avenue and the
westerly side of Whitestone Expressway;
Thence southerly along the westerly side of Whitestone
Expressway, 2,433.07 feet to a point of curvature;
Thence along the arc of a curve having a radius of 25.00 feet and
connecting the easterly side of Linden Place with the westerly
side of Whitestone Expressway, a distance of 48.20 feet;
Thence northerly along the easterly side of Linden Place, 395.44
feet;
Thence easterly at right angles with the easterly side of Linden
Place 235.94 feet;
Thence northerly at right angles with the previous course 87.58
feet;
Thence easterly along a course forming an interior angle of 93
degrees 05 minutes 30 seconds with the previous course, 335.95
feet;
Thence northerly along a course forming an interior angle of 264
degrees 30 minutes 52 seconds with the previous course, 752.41
feet;
Thence northerly along a course forming an interior angle of 129
degrees 24 minutes 22 seconds with the previous course, 1,118.19
feet;
Thence easterly along a course forming an interior angle of 94
degrees 50 minutes 44 seconds with the previous course, 652.21
feet to the point or place of BEGINNING.
The land is also identified by the following block and lot
numbers:
Block 4183 Lot p/o 1
Block 4242 Lot p/o 1
Block 4243 Lot p/o 1
Block 4280 Lot p/o 1
Block 4281 Lot p/o 1
<PAGE>
Block 4282 Lot 1
Block 4283 Lot 1
Block 4284 Lot 1
Block 4306 Lots p/o 1 and 44
Block 4307 Lots 1 and p/o 4
Block 4308 Lot 1, Lot 36
Block 4310 Lot 32
Block 4336 Lots 35 and p/o 50
Block 4337 Lots 62 and p/o 76
Block 4339 Lot 46
and demapped portions of 25th Avenue, 28th Avenue, 138th
Street and 139th Street.
The land has been assigned tentative tax block and lot numbers
Block 4282, Lot 100, for future identification.
- 8 -
FUNDING AGREEMENT #1
between
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION
and
THE NEW YORK TIMES COMPANY
Dated as of December 15, 1993
Relative to site preparation work and
foundation work required in connection with the construction
of a printing facility by The New York Times Company
in the College Point Industrial Park in the Borough of Queens
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
DEFINITIONS 4
ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT
- ----------- AND CONTRACT REQUIREMENTS
Sec.1.1 General Provisions and Provisions Regarding
Design and Construction 17
Sec.1.2 Procurement of Services and Goods 26
Sec.1.3 Liaison to EDC 31
ARTICLE TWO THE FUNDING
- -----------
Sec.2.1 Agreement to Fund 32
Sec.2.2 Schedule for Disbursements 32
Sec.2.3 Disbursements 43
Sec.2.4 The Times's Abandonment of the Project 45
ARTICLE THREE THE TERM
- -------------
Sec.3.1 Term 49
ARTICLE FOUR CONDITIONS FOR DISBURSEMENT
- ------------
Sec.4.1 Initial Submissions by The Times 50
Sec.4.2 Documentation for Disbursements on Account
of Eligible Costs 52
Sec.4.3 Direction of Submissions 56
ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND
- ------------ GUARANTIES OF THE TIMES
Sec.5.1 Organization; Standing 57
-i-
<PAGE>
Page
Sec.5.2 Intentionally Omitted 57
Sec.5.3 Conflict, etc. under Other Documents 57
Sec.5.4 No Litigation 58
ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC
- --------------
Sec.5A.1 Organization; Standing 59
Sec.5A.2 Due Authorization; Enforceable Obligations 59
ARTICLE SIX COVENANTS
- -----------
Sec.6.1 Requisitions Update The Times's Representations 60
Sec.6.2 Compliance with Other Agreements and Law;
Legal Status 60
Sec.6.3 Maintenance of and Compliance with Insurance
Requirements 60
Sec.6.4 Maintenance of Office 61
Sec.6.5 Compliance with Applicable Law 61
Sec.6.6 Assignment 62
Sec.6.7 Maintenance of Records 63
Sec.6.8 Intentionally Omitted 63
Sec.6.9 Due Application of Funding Proceeds 63
Sec.6.10 Defects; Non-Conforming Work 64
Sec.6.11 Participation by Women and Minority Owned
Businesses 64
Sec.6.12 No Liens 69
Sec.6.13 Intentionally Omitted 69
Sec.6.14 Intentionally Omitted 69
Sec.6.15 Intentionally Omitted 69
Sec.6.16 MacBride Principles 69
Sec.6.17 No Waiver of Compliance 70
-ii-
<PAGE>
Page
ARTICLE SEVEN DEFAULT
- -------------
Sec.7.1 Events of Default 71
Sec.7.2 Default Remedies; Exculpation 72
ARTICLE EIGHT NOTICES
- -------------
Sec.8.1 Notices 76
Sec.8.2 Disbursement Submissions 77
ARTICLE NINE GENERAL CONDITIONS AND COVENANTS
- ------------
Sec.9.1 Conflict of Interest 78
Sec.9.2 No Liability of Individuals 79
Sec.9.3 Anti-Boycott Provisions 79
Sec.9.4 Governing Law 80
Sec.9.5 Liability of EDC 80
Sec.9.6 Amendments 82
Sec.9.7 Successors and Assigns 82
Sec.9.8 Assignment of Funds 82
Sec.9.9 Counterparts 82
Sec.9.10 Interpretation 83
Sec.9.11 Indemnity 83
Sec.9.12 No Agency 84
Sec.9.13 Venue 85
Sec.9.14 Investigations; Cooperation 86
Sec.9.15 Intentionally Omitted 94
Sec.9.16 Maximum Interest Rate 94
Sec.9.17 Captions 94
Sec.9.18 Gender, Etc. 94
Sec.9.19 Assignment by EDC 95
Sec.9.20 Obligations of Newspaper Division 95
-iii-
<PAGE>
ARTICLE TEN AGREEMENT OF THE CITY
- -----------
Sec.10.1 City's Agreement to Fund EDC 96
Sec.10.2 Valid Agreement of the City 96
Sec.10.3 The Times's Rights Against the City 96
Atts: Appendix A - Premises
Appendix B - Insurance Requirements
Appendix C - Reimbursement Schedule
Appendix C-1 - Amortized Reimbursement Schedule
Appendix D - The Times's Certificate of Good Standing
Appendix E - EDC's Legal Opinion
Appendix F - EDC's Secretary's Certificate
Appendix G - Equal Employment Requirements
Appendix H - Employment Reporting Requirement
Appendix I - Intentionally Omitted
Appendix J - MacBride Principles Rider
Appendix K - Urban Renewal Plan
Appendix L - Corporation Counsel's Legal Opinion
Exhibit A - Form Legal Opinion
Exhibit B - Form Certificate of Specimen Signature
Exhibit C - AIA Forms
Exhibit D - Form Certification to be Attached to Requisition
Exhibit E - Form Expedited Certification Affidavit
-iv-
<PAGE>
FUNDING AGREEMENT #1 dated as of December 15, 1993 between NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation
formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the
State of New York, having its principal office at 110 William Street, New
York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York
State corporation, having its principal office at 229 West 43rd Street, New
York, New York, 10036.
PREAMBLE:
- ---------
W I T N E S S E T H
-------------------
WHEREAS:
A: The City of New York (the "City"), a municipal corporation of the
State of New York, is the owner in fee of certain real property identified, as
of the date hereof, as Block 4183, p/o Lot 1, Block 4242, Lot 1, Block 4243,
p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot 1,
Block 4283, Lot 1, Block 4284, Lot 1, Block 4306, p/o Lot 1 and Lot 44, Block
4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot 32,
Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76, Block
4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th Street
and 139th Street, on the Tax Map for the Borough of Queens, in the County of
Queens, City and State of New York, and assigned tentative tax block and lot
numbers Block 4282, Lot 100 for future identification, as such property is
more particularly described in Appendix A attached hereto and made a part
hereof (the "Premises); and
-1-
<PAGE>
B: The City, as landlord, and EDC, as tenant, entered into a lease
affecting the Premises dated as of the date hereof, which lease was assigned
by EDC to The Times pursuant to an Assignment and Assumption of Lease with
Consent dated as of the date hereof (the lease as so assigned, and as the same
may hereafter be amended, is hereinafter referred to as, the "Lease"), and for
which Lease EDC will act as the City's managing agent pursuant to Article 42
of the Lease; and
C: Pursuant to the terms of the Lease, The Times is obligated to
construct on the Premises a facility of no less than approximately 360,000
square feet for the printing, production and distribution of newspapers,
magazines and other periodicals or printed materials, and, at the sole
discretion of The Times, other such buildings and improvements on the Premises
as are permitted pursuant to the terms and provisions of the Lease, including
without limiting the generality of the foregoing, the expansion of the
printing facility to a size greater than 360,000 square feet (collectively the
"Project"); and
D: As a part of the Project, The Times will be performing site
preparation work (including drainage and filling) and foundation work
(including, without limitation, piling) on the Premises; and
E: In order to facilitate and enhance the feasibility of the
construction of the Project, and in order to (i) perform certain site
preparation work required in connection with the development of the Project,
including drainage and filling, and (ii) perform foundation work on the
Premises, including without limitation, the furnishing and driving of piles,
the pouring of concrete for pile caps, grade beams and structural floor slab,
and the
-2-
<PAGE>
furnishing and installation of reinforcing steel, EDC and the City have agreed
to make available City capital budget funds to The Times to pay for a portion
of the costs incurred by The Times in connection with the performance of such
work; and
F: The City and EDC have entered into an Amended and Restated
Contract dated as of June 30, 1993, as amended (the "Consolidated Contract"),
pursuant to which the City will provide EDC with City capital budget funds for
use, subject to the terms, conditions and limitations set forth in this
Agreement, in connection with the construction of the Project; and
G: The Times, independently, and not as agent of the City or EDC,
desires to perform, or cause the performance of, the Construction Work (as
hereinafter defined) subject to the terms, conditions and limitations set
forth in this Agreement; and
H: Pursuant to its obligations under the Consolidated Contract and in
furtherance of its corporate purpose of fostering economic development in the
City, EDC has agreed, subject to the terms, conditions and limitations set
forth herein, to disburse to The Times for the performance of the Construction
Work, payments up to, but not to exceed, $16,000,000 (the "Funding") for the
purpose of financing the Eligible Costs (as hereinafter defined) of the
Construction Work.
NOW, THEREFORE, EDC and The Times covenant and agree as follows:
-3-
<PAGE>
DEFINITIONS
-----------
As used in this Funding Agreement, the following initially capitalized
terms shall have the respective meanings indicated opposite each of them:
"Abandonment
Date" As defined in Sec.2.4(c).
"Accounting
Principles" The then current generally accepted accounting
principles consistently applied which relate to the
accrual method of accounting but subject to the
exceptions, if any, expressly set forth in this
Agreement.
"Affiliate" Any Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under
common control with, The Times. For purposes hereof, the
term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management and policies of The Times through the ownership
of voting securities, by contract, or otherwise. Ownership
of or by The Times includes beneficial ownership effected by
ownership of intermediate entities. An "Affiliate" of a
Person other than The Times shall be determined using the
same standard of control and ownership set forth herein with
respect to The Times. Unless the context otherwise
requires, any reference to an "Affiliate" in this Agreement
shall be deemed to refer to an Affiliate of The Times.
"Agreement" This Funding Agreement and any amendments thereto.
"Aggregated
Construction
Phase" The simultaneous construction by The Times of (i) the
aggregate of two or more of the five separate construction
phases hereinafter defined as Phase One Construction, Phase
Two Construction, Phase Three Construction, Phase Four
Construction and Phase Five Construction, and/or (ii) the
aggregate of a Segment (as hereinafter defined) of
Construction Work included within either Phase One
Construction, Phase Two Construction, Phase Three
Construction, Phase Four Construction or Phase Five
Construction with one or more
-4-
<PAGE>
Segments included within one or more of the other
Construction Phases of the Construction Work.
"Amortized
Reimbursement
Amount" As defined in Sec.2.4(a).
"Approvals" As defined in Sec.1.1(b).
"Architect" Any registered architect, architectural firm, professional
engineer, combined practice or association licensed in the
State of New York, selected by The Times, or any licensed
architect or engineer on staff to a Construction Manager or
General Contractor (as such terms are hereinafter defined)
who is authorized to sign construction documents, in its
professional capacity, on behalf of the Construction Manager
or General Contractor.
"Buildings
Department" The City's Department of Buildings, or any successor in
function.
"Business Day" Any day other than a Saturday, Sunday, legal holiday, or a
day on which banking institutions in New York City are
authorized by law or executive order to close.
"City" As defined in Recital A of the Preamble.
"College Point
Improvement
Fund Payments" As defined in Section 3.09 (b)(iii) of the Lease.
"Commencement
Date" As defined in Sec.3.1.
"Commissioner" As defined in Sec.9.14(a).
"Completed Cover
Sheet" As defined in Sec.4.1.
"Consolidated
Contract" As defined in Recital F of the Preamble.
-5-
<PAGE>
"Construction
Commencement
Date" As defined in Section 13.01(b)(ii) of the Lease.
"Construction
Contract" (A) Any construction management agreement executed by The
Times and the Construction Manager (as hereinafter defined),
if any, with respect to the services performed by the
Construction Manager with respect to all or any portion of
the Construction Work; or (B) any contract between The Times
and the General Contractor, if any, under which the General
Contractor is obligated to perform all or any portion of the
Construction Work; or (C) any contract between The Times and
any other contractor for the performance of all or any part
of the Construction Work. The term "Construction Contract"
shall not include any contract entered into by a contractor
with any subcontractor, materials supplier, consultant or
any other Person.
"Construction
Manager" Any construction manager selected by The Times, responsible
for the performance of certain construction management
services relative to the Construction Work.
"Construction
Phase" Any one of the five separate construction phases hereinafter
defined as Phase One Construction, Phase Two Construction,
Phase Three Construction, Phase Four Construction or Phase
Five Construction.
"Construction
Work" Any construction activities undertaken by or on behalf of
The Times in order to (i) perform the following site
preparation work ("Site Preparation Work") for the Project:
drainage and filling, and (ii) make foundation-related
improvements on the Premises, including without limitation,
the furnishing and driving of piles, the pouring of concrete
for pile caps, grade beams and structural floor slab, and
the furnishing and installation of reinforcing steel;
provided, however, that in no event shall Construction Work
include any "pre-construction" activities such as the
performance of soil boring work, staking, surveying,
measuring and surcharging. For purposes hereof, the portion
of the Site Preparation Work that is referred to as
"filling" and that will be deemed to be Construction Work
that is eligible for reimbursement from the Funding shall
include the bringing to the Premises and the placement
thereon of soil or other "fill" material in such amounts as
will raise the grade of the land from the grade as it exists
at the
-6-
<PAGE>
Commencement Date to the "design grade" indicated on the
Plans and Specifications (as hereinafter defined) submitted
by The Times to the Buildings Department as the grade upon
which The Times intends to construct its foundation for any
of the Minimum Printing Facility, the Five Press Facility,
the Six Press Facility, the Seven Press Facility and/or the
Eight Press Facility (as such terms are hereinafter
defined). In no event shall "filling" include the bringing
to the Premises and the placement thereon of soil or other
"fill" material which is necessary for the compaction or
surcharging of the land and which, after such compaction, is
removed from the Premises; provided, however, that if such
soil or "fill" material is permitted to sit on the land for
a period of time and after such period of time it is
determined that a portion of the soil or "fill" material
which initially lay above the "design grade" settled to such
a degree that it is at the time of such determination at or
below the "design grade", such portion of the soil or "fill"
material will be deemed to be Construction Work that is
eligible for reimbursement from the Funding.
"Contractor" Any contractor under a Construction Contract,
including without limitation, a Construction Manager
or General Contractor. The term "Contractor" shall
not include any subcontractor, materials supplier, or
other Person that has not entered into a Construction
Contract directly with The Times.
"DBS" As defined in Sec.6.11(d).
"Department of
Investigation" As defined in Sec.9.14(a).
"Deputy Mayor" As defined in Sec.9.14(a).
"DLS" The Division of Labor Services of the City's Department of
Business Services, or its successor in function.
"EDC" As defined in the first paragraph of this Agreement.
"EDC Default
Notice" As defined in Sec.9.5(b).
"Eight Press
Facility" A Printing Facility (as hereinafter defined) adequate to
accommodate the installation and operation therein of eight
printing presses and other equipment related primarily to
printing, collating, bundling, and
-7-
<PAGE>
distribution functions necessary in connection with the
production of newspapers, magazines and other periodicals or
printed materials.
"Eligible
Costs" The costs of the Construction Work paid or payable by The
Times to Contractors, subcontractors, suppliers and material
persons for labor and materials utilized in connection with
the Construction Work.
"Engineer of
Record" The professional engineer, if any, designated by The Times
or by the Construction Manager or the General Contractor, as
the case may be, to act as the engineer of record for the
Project.
"Entity" As defined in Sec.9.14(a).
"Events of
Default" Those events set forth in Sec.7.1.
"Federal Courts" As defined in Sec.9.13.
"Final Penalty" As defined in Sec.9.14(f)(ii).
"43rd Street
Facility" As defined in Sec.2.4(c)(ii).
"Fourth
Anniversary
Date" As defined in Sec.2.2(a)
"Five Press
Facility" A Printing Facility adequate to accommodate the installation
and operation therein of five printing presses and other
----
equipment related primarily to printing, collating, bundling
and distribution functions necessary in connection with the
production of newspapers, magazines and other periodicals or
printed materials.
"Funding" As defined in Recital H of the Preamble.
-8-
<PAGE>
"Funding Agreement
#2" The funding agreement between EDC and The Times dated as of
the date hereof which provides for the funding to The Times
of City capital budget dollars necessary to pay for the
construction of a City sanitary sewer system to service the
Premises, as such agreement may be amended from time to
time.
"Funding Agreement
#3" The funding agreement between EDC and The Times dated as of
the date hereof which provides for the funding to The Times
of funds necessary to pay for the construction of an interim
New York City Police Department evidence vehicle facility,
as such agreement may be amended from time to time.
"Funding Agreement
#4" The funding agreement between EDC and The Times dated as of
the date hereof which provides for the funding to The Times
of City capital budget dollars necessary to pay for certain
reconstruction of the Whitestone Expressway Service Road
from 20th Avenue to Linden Place (the "Whitestone Road"), a
City street running adjacent to Premises, as such agreement
may be amended from time to time.
"General
Contractor" Any general contractor selected by The Times, responsible for
the performance of all or any portion of the general
construction work relative to the Construction Work.
"Good Faith W/MBE
Participation
Dollar Value" As defined in Sec.6.11(a).
"Governmental
Authorities" The United States of America, the State of New York,
the City and any agency, department, legislative body,
commission, board, bureau, instrumentality or
political subdivision or public benefit corporation of
any of the foregoing, now existing or hereafter
created, having legal jurisdiction over the Premises
or any portion thereof or any street, road, avenue,
sidewalk or water comprising a part of or immediately
adjacent to the Premises.
"Gross Building
Area" As defined in Article 1 of the Lease.
-9-
<PAGE>
"Guaranteed W/MBE
Participation
Dollar Value" As defined in Sec.6.11(a).
"Impositions" As defined in Section 3.09(b)(i) of the Lease.
"Interim Penalty" As defined in Sec.9.14(f)(i).
"Investigation" As defined in Sec.9.14(a).
"Late Charge
Rate" The Prime Rate (as hereinafter defined) plus one percent
(1%).
"Lease" As defined in Recital B of the Preamble.
"Member" As defined in Sec.9.14(a).
"Minimum Printing
Facility" A Printing Facility of no less than approximately 360,000
square feet of floor area, which facility and its foundation
shall be adequate to accommodate the installation and
operation therein of four printing presses and other
----
equipment related primarily to printing, collating, bundling
and distribution functions necessary in connection with the
production of newspapers, magazines and other periodicals or
printed materials.
"MBEs" As defined in Sec.6.11(a).
"New York State
Courts" As defined in Sec.9.13.
"Operational
Date" As defined in Sec.2.4(c)(v).
"Outside Operational
Date" As defined in Sec.2.4(c)(iv).
"Parties" EDC and The Times.
"Person" An individual, corporation, partnership, joint venture,
estate, trust, unincorporated association; any federal,
state, county or municipal government or any bureau,
department or agency thereof; and any fiduciary acting in
such capacity on behalf of any of the foregoing.
-10-
<PAGE>
"Phase One
Construction" Site Preparation Work and the laying of a foundation for,
and the construction of, a Minimum Printing Facility.
"Phase Two
Construction" Site Preparation Work and the laying of a foundation for,
and the construction of, the Five Press Facility.
"Phase Three
Construction" Site Preparation Work and the laying of the foundation for,
and the construction of, the Six Press Facility.
"Phase Four
Construction" Site Preparation Work and the laying of a foundation for,
and the construction of, the Seven Press Facility.
"Phase Five
Construction" Site Preparation Work and the laying of a foundation for,
and the construction of, the Eight Press Facility.
"Plans and
Specifications" (i) The drawings and plans and specifications for the
Project which includes the Construction Phase or Aggregated
Construction Phase to be initially constructed by The Times
(The Times hereby acknowledging that the portion of the
Project to be initially constructed by The Times shall be at
least the Minimum Printing Facility and that the Plans and
Specifications for such initial construction shall indicate
thereon the plans and specifications for the construction of
the Minimum Printing Facility, provided, however, that such
plans and specifications need not be completed to the extent
required by the Buildings Department to issue a building
permit but should be completed to the extent required by the
Buildings Department to issue a foundation permit), prepared
by the Architect, and approved to the extent required by
Sec.1.1 hereof, as such drawings and plans and specifications
may be modified or amended from time to time in accordance
with this Agreement, and (ii) any subsequent drawings and
plans and specifications, or modifications or amendments to
the initial drawings and plans and specifications, for any
expansion of the Project required by any additional
Construction Phase or Aggregated Construction Phase,
prepared by the Architect and as approved to the extent
required by Sec.1.1 hereof.
"Premises" As defined in Recital A of the Preamble.
"Prime Rate" The base or prime rate of interest from time to time charged
by
-11-
<PAGE>
Chemical Bank, as such rate is published by The New York
-------------
Times newspaper, or by The Wall Street Journal if such rate
----- ------------------------
is not published by The New York Times at the time in
--------------------
question.
"Printing
Facility" A facility for the printing, production and distribution of
newspapers, magazines and other periodicals or printed
materials.
"Prohibited
Person" As defined in Sec.1.2(b)(2).
"Project" As defined in Recital C of the Preamble.
"Project Budget" As defined in Sec.4.3.
"Project Work" Any pre-construction activities (including, without
limitation, soil borings, surveying and surcharging),
clearing, excavation, grading, filling and construction
activities undertaken by or on behalf of The Times for the
purpose of constructing the Project all in accordance with
this Agreement and the Plans and Specifications, whether or
not paid for with the Funding.
"Public Parties" As defined in Sec.9.11(a).
"Reimbursement
Amount" As defined in Sec.2.4(a).
"Rental" As defined in Article 1 of the Lease.
"Requirements" Any and all laws, rules, regulations, orders, ordinances,
statutes, codes, executive orders, resolutions and
requirements of all Governmental Authorities currently in
force or hereafter adopted applicable to the Premises and/or
the Project Work including without limitation, those rules,
regulations and requirements of the Urban Renewal Plan (as
hereinafter defined).
"Requisition" As defined in Sec.4.2(a)(ii).
"Retainage" As defined in Sec.2.2(a)(1).
"Reviewable
Features" With respect to any submission of the Plans and
Specifications, features of such submission the review of
which is necessary to enable
-12-
<PAGE>
EDC to determine (i) compliance with the requirements set
forth in the Urban Renewal Plan to the extent that such
requirements are applicable to The Times, and (ii) the
number of square feet of Gross Building Area to be
constructed.
"Reviewing
Parties" The Buildings Department, the City's Fire Department, the
City's Department of Environmental Protection, the City's
Department of Transportation, and any other Governmental
Authority with jurisdiction over the Project or the Premises
and responsible for reviewing and approving drawings, plans
and specifications for the Project in the normal course of
their business in connection with (i) the issuing of permits
or approvals (including a building permit) with respect to
any construction project in the Borough of Queens, City of
New York, or (ii) ensuring compliance with the Requirements.
"Scheduled
Completion Date" The date on which The Times is required, pursuant to Section
13.01(b) of the Lease, to Substantially Complete (as
hereinafter defined) construction of the Minimum Printing
Facility.
"Segments" Portions or aspects of the Project Work which can be
performed or constructed independently from the remainder of
the Project Work or from other portions or aspects of the
Project Work; for example, Site Preparation Work, driving of
piles, foundation work, construction of a Printing Facility,
landscaping.
"Seven Press
Facility" A Printing Facility adequate to accommodate the installation
and operation therein of seven printing presses and other
-----
equipment related primarily to printing, collating, bundling
and distribution functions necessary in connection with the
production of newspapers, magazines and other periodicals or
printed materials.
"Site Preparation
Work" As defined in the definition of Construction Work.
"Six Press
Facility" A Printing Facility adequate to accommodate the
installation and operation therein of six printing
---
presses and other equipment related primarily to
printing, collating, bundling and distribution
functions necessary in connection with the production
of newspapers, magazines and other periodicals or
printed materials.
-13-
<PAGE>
"Short-Term Late
Charge Rate" The rate of interest from time to time charged in connection
with six (6) month Treasury bonds, plus one percent (1%).
"Substantial
Completion" or
"Substantially
Complete(d)" With respect to only the initial Construction Phase of the
Project (which initial Construction Phase shall be no
smaller in size than the Minimum Printing Facility), the
completion of construction of an enclosed envelope of floor
space, environmentally controlled and containing (i)
heating, ventilating and air conditioning systems installed
for general purpose or multi-purpose occupancy, (ii) water,
sewer and sanitary facilities suitable for general purpose
or multi-purpose occupancy, (iii) electrical service,
including interior lighting, throughout the constructed
structure suitable for general purpose or multi-purpose
occupancy, (iv) fire detection and protection and safety
facilities suitable for general purpose or multi-purpose
occupancy throughout the structure, and (v) building shell
construction constructed to a level adequate to permit
build-to-suit occupancy with interior and exterior walls as
required for structural integrity; provided, however that
such structure need not include production systems and the
specific construction features required to make the above
described utility systems operational in the production of
newspapers. Substantial Completion shall be established
upon receipt by EDC of a certification from the Architect or
Engineer of Record, that the above described structure shall
have been constructed substantially in accordance with the
Plans and Specifications and any other construction
documents filed with the Buildings Department, provided
however, that the date of Substantial Completion shall be
established by the date of delivery of such certification.
"Target Building
Size" As defined in Sec.2.1(c)(i).
"Target
Footprint" As defined in Sec.2.1(c)(i).
"Term" As defined in Sec.3.1.
"The Times" As defined in the first paragraph of this Agreement.
"The Times
Indemnitees" As defined in Sec.9.11(b).
-14-
<PAGE>
"Transaction
Documents" As defined in Sec.9.14(a).
"Unavoidable
Delays" Delays caused by (i) strikes, slowdowns, walkouts, lockouts
or other labor troubles, (ii) acts of God, (iii)
catastrophic weather conditions, (iv) inability to obtain
labor or materials due to labor disputes, (v) court orders
enjoining commencement or continuation of the Project Work,
(vi) enemy action, (vii) civil commotion, (viii) shortage of
fuel, supplies or labor resulting from governmental declared
priorities in connection with a public emergency, (ix)
failure or defect in the supply of electricity, oil, gas or
water to the Premises provided that such failure or defect
is not due to the action or inaction of The Times or its
Contractors or their subcontractors, (x) fire, (xi)
casualty, (xii) the failure of EDC to disburse the Funding
or any portion thereof in accordance with the provisions of
this Agreement, (xiii) the failure of EDC to review, comment
on, approve or disapprove, and inform the Buildings
Department of its approval of, the Plans and Specifications
within the time periods required by Article One hereof
(provided that such failure is not a result of The Times's
failure to submit Plans and Specifications of reasonably
sufficient detail to permit EDC to properly review such
Plans and Specifications or to submit Plans and
Specifications appropriately modified to reflect EDC's
comments thereon), or (xiv) other causes not within The
Times's control that is causing a delay in The Times's
performance of its construction obligations hereunder. The
Times shall use its good faith efforts to notify EDC in
writing, stating when such delay commenced, not later than
ten (10) Business Days after The Times has first received
knowledge of the occurrence of any of the foregoing
conditions; provided, however, that The Times's failure to
notify EDC of the occurrence of an event constituting an
Unavoidable Delay shall not affect the commencement of such
delay or otherwise result in the loss of any benefit or
right granted to The Times under this Agreement. In no
event shall The Times's financial condition or inability to
obtain financing constitute an Unavoidable Delay.
"Urban Renewal
Plan" The Second Amended Urban Renewal Plan for the College
Point II Industrial Development Project, dated
February 1989, in effect as of the date of this
Agreement (a copy of which is attached hereto as
Appendix K), and all amendments and modifications
thereto affecting landscaping requirements compliance
with which would not require The Times to incur a
material cost.
-15-
<PAGE>
"WBEs" As defined in Sec.6.11(a).
"W/MBEs" As defined in Sec.6.11(a).
"W/MBE
Participation
Dollar Value" As defined in Sec.6.11(c).
"W/MBE
Percentage" As defined in Sec.6.11(c).
"W/MBE
Report" As defined in Sec.6.11(b).
"Whitestone Road" As defined in the definition of Funding Agreement #4.
-16-
<PAGE>
ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND
----------------------------------------------------
CONTRACT REQUIREMENTS
---------------------
Sec.1.1 General Provisions and Provisions Regarding Design and
---------------------------------------------------------------
Construction.
- -------------
(a) General. The Times agrees to perform the Project Work and EDC
--------
agrees to disburse the Funding on the terms and conditions contained in this
Agreement.
(b) Plans and Specifications. (1)(i) The Times shall prepare the
-------------------------
Plans and Specifications in accordance with all applicable requirements of the
Buildings Department (including, without limitation, the requirements of the
New York City Building Code) and all other applicable Requirements. The Plans
and Specifications shall, in addition, be prepared, to the extent reasonably
practicable, in such manner as to clearly show (either graphically or by
appropriate notes) that all elements of the design conform to the requirements
of the Urban Renewal Plan to the extent that such requirements are applicable
to The Times. The Times agrees to deliver a copy of the Plans and
Specifications (in a single or in multiple submissions, at the option of The
Times) prepared in accordance with the foregoing, together with a letter from
the Architect or the Engineer of Record stating that the facility contemplated
by such Plans and Specifications to be constructed, if constructed in
accordance with the specifications set forth in such Plans and Specifications,
is designed to accommodate the printing presses and other equipment that The
Times has informed such Architect or Engineer of Record that it intends to
install at the facility contemplated by such Plans and Specifications (it
being understood that the printing presses and equipment that The Times
informs such Architect or Engineer of Record that it intends to install at
the facility
-17-
<PAGE>
shall be such printing presses and equipment as is necessary to operate
each of the Minimum Printing Facility, the Five Press Facility, the Six Press
Facility, the Seven Press Facility and the Eight Press Facility, as the case
may be), to EDC for EDC's review and approval prior to or simultaneous
with its submission of the Plans and Specifications to the Buildings
Department. EDC's review and approval of the Plans and Specifications as
provided in this Sec.1.1(b) shall be limited to Reviewable Features. EDC's
approval of the Plans and Specifications shall not be unreasonably withheld.
EDC will approve or disapprove and comment on such submission with respect
to Reviewable Features within twenty-five (25) days after receipt thereof
and, if approved, will immediately notify The Times, the Buildings Department
and any other applicable Reviewing Party of such approval. If EDC
disapproves of and has comments on any submission of the Plans and
Specifications or any portion or aspect thereof, such disapproval and
comments will be given to The Times in writing in a detailed manner within
the twenty-five (25) day time period specified herein. As to those portions
or aspects of the Plans and Specifications which EDC does not disapprove and
comment on in writing in a detailed manner within such twenty-five (25) day
time period, such portions or aspects of the Plans and Specifications shall be
deemed approved and if the portions or aspects that have been deemed approved
constitute an independent element of the Project Work (e.g. Site Preparation
Work, the driving of piles, foundation work, construction of the Printing
Facility, landscaping), EDC shall promptly advise the Buildings Department and
any other applicable Reviewing Party of such approval. The Times shall submit
to EDC modified Plans and
-18-
<PAGE>
Specifications with respect to those portions or aspects of the Plans and
Specifications which are disapproved and commented on by EDC within the
applicable time periods set forth herein, responsive to such comments, for
EDC's approval or disapproval and comment, until approved by EDC. EDC will
approve or disapprove and comment on each such subsequent submission within
fifteen (15) days after receipt thereof, and, if approved, will immediately
notify The Times, the Buildings Department and any other applicable Reviewing
Party of such approval. As to those portions or aspects of the modified Plans
and Specifications which EDC does not disapprove and comment on in writing in
a detailed manner within such fifteen (15) day time period, such portions or
aspects of the modified Plans and Specifications shall be deemed approved and
if the portions or aspects that have been deemed approved constitute an
independent element of the Project Work, EDC shall promptly advise the
Buildings Department and any other applicable Reviewing Party of such
approval.
(ii) If EDC disapproves and comments on any submission of the
Plans and Specifications and The Times has a good faith reason to believe that
such disapproval and/or comments are unreasonable, then The Times shall have
the right to submit to arbitration in accordance with the provisions of
Article 34 of the Lease the question as to whether, taking into account the
terms and conditions of this Agreement and the Lease, such disapproval and/or
comments are unreasonable. If the arbitrator decides that EDC's disapproval
and/or comments are unreasonable then, from the date of such determination in
favor of The Times, the Plans and Specifications shall be deemed approved.
-19-
<PAGE>
(iii) If any portion or aspect of the Plans and Specifications is
deemed approved in accordance with Sec.1.1(b)(1)(i) or Sec.1.1(b)(1)(ii) above,
then upon receipt of a notice from The Times that such portions or aspects of
the Plans and Specifications have been deemed approved in accordance with
Sec.1.1(b)(1)(i) of this Agreement or upon receipt by The Times of a
determination in favor of The Times in arbitration in accordance with
Sec.1.1(b)(1)(ii) of this Agreement, EDC shall have ten (10) days to advise the
Buildings Department and any other applicable Reviewing Party of such deemed
approval. For each day beyond the ten (10) day time period set forth herein
that EDC fails to advise the Buildings Department and any other applicable
Reviewing Party of such deemed approval of the Plans and Specifications, The
Times shall be entitled to an abatement of future installments of Rental
(other than Impositions and College Point Improvement Fund Payments) due under
the Lease in an amount equal to $1,000.
(2) In addition to The Times's submission of the Plans and
Specifications to EDC for its review and approval in accordance with
Sec.1.1(b)(1) hereof, The Times shall submit such Plans and Specifications to
the Reviewing Parties, as required by law, rule, regulation or other
applicable Requirement, for their review and approval in the normal course of
their business. The Times shall also obtain all required permits, consents,
certificates, licenses, authorizations and approvals of the Buildings
Department, and all other Governmental Authorities having jurisdiction over
the Project and the Premises (all such permits, consents, certificates,
licenses, authorizations and approvals are hereinafter collectively referred
to as the "Approvals"). The Times shall deliver to EDC copies of the
-20-
<PAGE>
Plans and Specifications that are filed with, and approved by, the Buildings
Department.
(3) (i) The Times shall give notice to EDC of any and all
changes The Times wishes to make to the Plans and Specifications prior to any
construction in accordance with such proposed changes. No change which would
(i) cause changes to be made to the Plans and Specifications with respect to
those portions or aspects of the Plans and Specifications previously approved
or deemed approved in accordance with Sec.1.1(b)(1) or this Sec.1.1(b)(3), or
(ii) cause the Plans and Specifications to be in material noncompliance with the
requirements set forth in the Urban Renewal Plan, or (iii) alter the Gross
Building Area so that it is less than 360,000 square feet (unless such change
to the Plans and Specifications is accompanied by a letter from the Architect
or Engineer of Record stating that the Facility contemplated by such Plans and
Specifications, if constructed in accordance therewith, is designed to
accommodate the printing presses and other equipment that The Times has
informed such Architect or Engineer of Record it intends to install at such
Facility, it being understood that the printing presses and equipment that The
Times informs such Architect or Engineer of Record of shall be at least such
printing presses and equipment as is necessary to operate the Minimum Printing
Facility), shall be made to the Plans and Specifications without the prior
written approval of EDC, which approval shall not be unreasonably withheld.
EDC will approve or disapprove and comment upon such changes within twenty-
five (25) days after receipt thereof and, if approved, will immediately notify
The Times, the Buildings Department and any other applicable Reviewing Party
of such approval. If EDC disapproves and has comments on any such changes,
such comments will be given to The Times in writing in a detailed manner
within the twenty-five (25) day
-21-
<PAGE>
time period specified herein. As to those changes which EDC does not
disapprove and comment upon in writing in a detailed manner within such
twenty-five (25) day time period, such changes shall be deemed approved and if
those changes that have been deemed approved constitute changes to an
independent element of the Project Work (as exemplified in Sec.1.1(b)(1)(i)
above), EDC shall promptly advise the Buildings Department and any other
applicable Reviewing Party of such approval. The Times shall submit to EDC
modified Plans and Specifications with respect to those changes which are
disapproved and commented on by EDC within the applicable time periods set
forth herein, responsive to such comments, until approved by EDC. EDC will
approve or disapprove and comment on each such subsequent submission within
fifteen (15) days after receipt thereof, and, if approved, will immediately
notify The Times, the Buildings Department and any other applicable Reviewing
Party of such approval. As to those portions or aspects of the modified Plans
and Specifications which EDC does not disapprove and comment on in writing in
a detailed manner within such fifteen (15) day time period, such portions or
aspects of the Plans and Specifications shall be deemed approved and if the
portions or aspects that have been deemed approved constitute an independent
element of the Project Work, EDC shall promptly advise the Buildings
Department and any other applicable Reviewing Party of such approval.
(ii) If EDC disapproves and comments on any proposed changes to
the Plans and Specifications and The Times has a good faith reason to believe
that such disapproval and/or comments are unreasonable, then The Times shall
have the right to submit to arbitration in accordance with the provisions of
Article 34 of the Lease the
-22-
<PAGE>
question as to whether, taking into account the terms and conditions of this
Agreement and the Lease, such disapproval and/or comments are unreasonable.
If the arbitrator decides that EDC's disapproval and/or comments are
unreasonable then, from the date of such determination in favor of The Times,
the proposed changes to the Plans and Specifications shall be deemed approved.
(iii) If any portion or aspect of any subsequent submission of the
Plans and Specifications is deemed approved in accordance with Sec.1.1(b)(3)(i)
or Sec.1.1(b)(3)(ii) above, then upon receipt of a notice from The Times that
such portions or aspects of the subsequent submission of the Plans and
Specifications have been deemed approved in accordance with Sec.1.1(b)(3)(i) of
this Agreement or upon receipt by The Times of a determination in favor of The
Times in arbitration in accordance with Sec.1.1(b)(3)(ii) of this Agreement, EDC
shall have ten (10) days to advise the Buildings Department and any other
applicable Reviewing Party of such deemed approval. For each day beyond the
ten (10) day time period set forth herein that EDC fails to advise the
Buildings Department and any other applicable Reviewing Party of such deemed
approval of the subsequent submission of the Plans and Specifications, The
Times shall be entitled to an abatement of future installments of Rental
(other than Impositions and College Point Improvement Fund Payments) due under
the Lease in an amount equal to $1,000.
(4) Except with respect to compliance with the requirements set forth
in the Urban Renewal Plan, EDC's approval of the Plans and Specifications or
any modifications thereto or any subsequent submissions thereof shall not be,
nor shall it be construed as being, or relied upon as, a determination that
such comply with the Requirements or are
-23-
<PAGE>
structurally, architecturally or by any other standard technically correct.
(5) Notwithstanding anything to the contrary contained herein,
Plans and Specifications submitted to EDC for EDC's review and approval in
accordance herewith, if submitted in multiple submissions or otherwise in a
phased sequence pursuant to the terms hereof, need not show compliance with
all Requirements set forth in the Urban Renewal Plan that are applicable to
the Project (subject to The Times's ultimate obligations under the Lease to
submit Plans and Specifications that, in the aggregate, show compliance with
all such Requirements), but should, in any event, show compliance with all
such Requirements of the Urban Renewal Plan that could be violated by
construction pursuant to the Plans and Specifications for the particular
Segment, Construction Phase or Aggregated Construction Phase being reviewed by
EDC. For example, the Plans and Specifications need not contain details
regarding landscaping in order for the Times to proceed with Site Preparation
Work or foundation work, provided that such Plans and Specifications show
compliance with all Requirements of the Urban Renewal Plan applicable to such
Site Preparation Work or foundation work. EDC agrees that it will not
disapprove, comment on, or fail to advise the Buildings Department and any
other applicable Reviewing Party of its approval or deemed approval of Plans
and Specifications on the grounds that such Plans and Specifications do not
show compliance with Requirements of the Urban Renewal Plan that are not
required to be addressed by such Plans and Specifications pursuant to the
provisions of this Sec.1.1(b)(5).
(c) Right to Proceed. EDC will not be obligated to disburse any of
------------------
the Funding until (i) EDC has approved the Plans and Specifications in
accordance with Sec.1.1(b) hereof,
-24-
<PAGE>
and (ii) all Approvals necessary for the construction of any portion of the
Construction Work which The Times is then requesting to be funded with the
Funding, have been obtained. Nothing contained herein is intended to prohibit
or otherwise prevent The Times from proceeding with the construction of the
Project or any portion thereof which is not to be funded with the Funding.
(d) Performance of the Work. The Times covenants and agrees to cause
-------------------------
the Project to be constructed in accordance with the requirements of this
Agreement and with the Plans and Specifications and all applicable
Requirements.
(e) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof,
-----------------
The Times shall permit EDC, its agents and/or professional consultants to
make inspections of the Premises, accompanied by a representative of The
Times, during normal business hours or otherwise when Construction Work is in
progress, at reasonable times and upon reasonable prior notice to The Times
and in accordance with applicable safety standards, as it reasonably deems
necessary to observe compliance with this Agreement. Such inspections shall
be visual only and shall not require the uncovering of any work unless
specifically requested in writing by EDC; provided, however, that EDC shall
request the uncovering of work only if there is reasonable evidence or cause
to believe that the work was not performed in accordance with the Plans and
Specifications or the Requirements, and further provided that if the work that
has been uncovered is determined to be performed in accordance with the
Plans and Specifications or the Requirements, EDC shall pay the costs
associated with the uncovering and if the work that has been uncovered is
determined to
-25-
<PAGE>
be unacceptable because it was not performed in accordance with the Plans and
Specifications or the Requirements, The Times shall pay the costs associated
with the uncovering. EDC shall use its best efforts to cause such inspections
to be made in a manner such that it will not interfere with the progress of
the Construction Work or other Project Work. The omission or failure of EDC
or any representative thereof to make such inspections, or to notify The Times
of any non-compliance with the terms of this Agreement or the Plans and
Specifications, shall in no way relieve The Times of its obligations under
this Agreement or impose any liability upon EDC, its consultants and agents.
Nothing contained in this Sec.1.1(e) shall be construed to give EDC the right
under this Agreement to stop, hinder or delay the Construction Work.
Sec.1.2 Procurement of Services and Goods
---------------------------------
(a) At such time as The Times enters into a Construction Contract or
Construction Contracts, The Times shall enter into such Construction Contract
or Construction Contracts independently and not as agent of the City or EDC
for the performance of any Construction Phase of the Construction Work or any
Segments of any Construction Phase or Aggregated Construction Phase of the
Construction Work in accordance with the Plans and Specifications therefor,
including without limitation, the performance of Site Preparation Work for the
Project and the construction of the foundation and the making of foundation
related improvements on the Premises (including, without limitation, piling).
(b) (1) The Times shall have the right to enter into Construction
Contracts with a Person or Persons selected by The Times in its sole
discretion; provided however, that any
-26-
<PAGE>
Construction Contract with a Construction Manager or General Contractor shall
be subject to EDC's prior written approval solely as to whether such
Construction Manager or General Contractor is a Prohibited Person. Prior to
letting any Construction Contract with a Construction Manager or General
Contractor, The Times shall submit to EDC by hand delivery, registered or
certified mail, or national overnight courier service, a statement as to the
Person or Persons which The Times intends to select as its Construction
Manager or General Contractor. EDC shall advise The Times, within fifteen
(15) Business Days after receipt of such statement, whether any such Person or
Persons is a Prohibited Person. If EDC fails to so advise The Times within
such fifteen (15) Business Day period as to whether any such Person or Persons
is a Prohibited Person, such Person shall be deemed not to be a Prohibited
Person. EDC understands that The Times has entered into a Construction
Contract with Lehrer McGovern Bovis, Inc. for the performance of certain
construction management services and hereby acknowledges that, as of the date
of this Agreement, Lehrer McGovern Bovis, Inc. is not a Prohibited Person.
Notwithstanding anything to the contrary contained herein, once The Times has
entered into a Construction Contract or Construction Contracts with a Person
or Persons to act as its Construction Manager or General Contractor based on
EDC's advice that such Person or Persons are not Prohibited Persons (or EDC's
failure to notify The Times within the fifteen (15) Business Day period
described above that such Person or Persons are Prohibited Persons), The Times
shall in no event be required to terminate such Construction Contract or
Construction Contracts even if EDC thereafter determines that such Person or
Persons were, or had become, Prohibited Persons and the rights of The Times
and EDC under this Agreement
-27-
<PAGE>
shall be unaffected and remain in full force and effect as if such Person or
Persons were not, or had not become, Prohibited Persons.
(2) For purposes hereof, the term "Prohibited Person" shall mean:
(i) Any Person (A) that is in default after notice and beyond
any applicable grace period, of its obligations under any
material written agreement with EDC or Landlord, or (B) that
directly controls, is controlled by, or is under common
control with a Person that is in default after notice and
beyond any applicable grace period, of its obligations under
any material written agreement with EDC or Landlord, unless,
in each instance, such default or breach either (x) has been
waived in writing by EDC or Landlord or (y) is being
disputed in a court of law, administrative proceeding,
arbitration or other forum or (z) is cured within thirty
(30) days after a determination and notice to Tenant from
Landlord that such Person is a Prohibited Person as a result
of such default,
(ii) Any Person that is an organized crime figure, unless the
City is otherwise doing business with such person
notwithstanding such organized crime status,
(iii) Any government, or any Person that is directly or indirectly
controlled (rather than only regulated) by a government,
that is finally determined to be in violation of (including,
but not limited to, any particular in an international
boycott in violation of) the Export Administration Act of
-28-
<PAGE>
1979, as amended, or any successor statute, or the
regulations issued pursuant thereto, or any government that
is, or any Person that, directly or indirectly, is
controlled (rather than only regulated) by a government that
is subject to the regulations or controls thereof,
(iv) Any government, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a government,
the effects or the activities of which the regulated or
controlled pursuant to regulations of the United States
Treasury Department or executive orders of the President of
the United States of America issued pursuant to the Trading
with the Enemy Act of 1917, as amended,
(v) Any Person that is in default in the payment to the City of
any real estate taxes, sewer rents or water charges
totalling more than $10,000, unless such default is then
being contested in good faith in accordance with the law or
unless such default is cured within thirty (30) days after a
determination and notice to Tenant from Landlord that such
Person is a Prohibited Person as a result of such default,
or
(vi) Any Person that has solely owned, at any time during the
three (3) years immediately preceding a determination of
whether such Person is a Prohibited Person, any property
which, while in the ownership of such Person, was acquired
by the City by in rem tax foreclosure, other than a property
------
in which the City has released or is in the process of
releasing its interest pursuant to the Administrative Code
of the City.
-29-
<PAGE>
(c) All Construction Contracts, in order to be eligible for
disbursement under this Agreement, shall provide, in substance:
(1) (intentionally omitted);
(2) that neither the Contractor nor any of its employees or
subcontractors is or shall be deemed to be an agent, servant,
employee or contractor of the City or EDC by virtue of this
Agreement or by virtue of any approval, permit, license, grant,
right or other authorization given by the City, EDC or any of
their respective officers, officials, directors, members, agents
or employees; and that the Contractor shall not commence any legal
proceeding against the City or EDC to recover any compensation
which may be payable under the Construction Contract;
(3) that the Contractor is solely responsible for the work, direction,
compensation and personal conduct of its employees and
subcontractors;
(4) (intentionally omitted);
(5) that the Contractor shall maintain accurate, readily auditable
records and accounts with supporting documentation, in accordance
with Accounting Principles, of all Construction Work performed,
and receipts and expenditures made, in connection therewith, and
that the Contractor shall make such records and accounts available
to EDC, the City and each of their respective agents and
employees, for inspection and audit at reasonable times and upon
reasonable prior written notice for a period of six (6) years
after completion of the pertinent Construction Contract; and
-30-
<PAGE>
(6) provisions incorporating the requirements of Sec.6.5(a) (Compliance
with Applicable Law) and Sec.9.1 (Conflict of Interests).
(d) The Times shall cause the Contractors to include in any
subcontracts entered into by such Contractors for the performance of the
Construction Work, provisions substantially the same as the provisions set
forth in Sec.1.2(c) hereof.
Sec.1.3 Liaison to EDC
--------------
The Times will notify EDC, in writing, prior to the Construction
Commencement Date, of the member or members (including an alternate) of The
Times's staff who will have the authority and the primary responsibility to
communicate with EDC (whether to respond to inquiries or to provide updates
regarding the progress of the work or otherwise) regarding the performance of
each Segment, Construction Phase or Aggregated Construction Phase of the
Project Work. The Times agrees to use its good faith efforts to notify EDC in
writing of any intended substitution of said person at least five (5) days
prior to the date such substitution will take effect but in any event will
notify EDC in writing of any such substitution on the day such substitution
will take effect. The Times will cause such person to be available to the
extent reasonably necessary to communicate with EDC regarding the performance
of the Construction Work.
-31-
<PAGE>
ARTICLE TWO - THE FUNDING
-------------------------
Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions,
--------------------
representations and warranties contained in this Agreement, EDC agrees to
disburse to The Times, an amount not to exceed the Funding, and The Times
agrees to accept the Funding, for performance by The Times of the Construction
Work. The Times agrees to utilize the Funding solely in connection with the
Construction Work. Subject to EDC's remedies upon an Event of Default and
except as otherwise provided in Sec.2.4 hereof, the Funding, once disbursed
under this Agreement, shall not be subject to any reimbursement whatsoever to
EDC.
(b) The Times acknowledges that neither EDC nor the City has
represented or warranted that the Funding will be sufficient to pay for the
entire cost of the Construction Work. The Times agrees that The Times will be
solely responsible to the extent that the Eligible Costs of the Construction
Work exceed the amount of the Funding for any reason. The Times acknowledges
that the Funding is not a fee or other compensation earned by or paid to The
Times.
Sec.2.2 Schedule for Disbursements. (a) Subject to satisfaction of,
-----------------------------
and/or compliance with, the terms and conditions of this Sec.2.2 with respect to
each Segment, Construction Phase or Aggregated Construction Phase, EDC shall
disburse the Funding to The Times in accordance with the following schedule:
(1) With respect to the aggregate of all the Segments that
constitute Phase
-32-
<PAGE>
One Construction, provided that prior to or simultaneously
with the first request for disbursement therefor The Times
demonstrates to EDC's reasonable satisfaction through the
production of invoices, purchase orders, a purchase and sale
agreement, or other documentation reasonably satisfactory to
EDC, that The Times has purchased, or contracted to
purchase, four printing presses for delivery to the Premises
and use in connection with the Minimum Printing Facility,
EDC shall disburse to The Times, in accordance with Sec.2.3
hereof, a portion of the Funding in an aggregate amount
equal to,
(i) $3,000,000 if the Phase One Construction commences on
or prior to the fourth anniversary of the date on
which the Lease has been executed and delivered by the
parties thereto (the "Fourth Anniversary Date"), or
(ii) $4,000,000 if the Phase One Construction commences
after the Fourth Anniversary Date.
(2) With respect to the aggregate of all of the Segments that
constitute Phase Two Construction, provided that prior to or
simultaneously with the first request for disbursement in
connection therewith, The Times delivers to EDC a letter
from the Architect or the Engineer of Record stating that
the improvements contemplated by such Construction Phase or
Segment or Segments thereof (it being understood and agreed
that such improvements may consist, at a minimum, of only
the
-33-
<PAGE>
piles on which a foundation and facility might be
constructed at a later date), as described in the Plans and
Specifications therefor, if constructed in accordance with
the specifications set forth in such Plans and
Specifications, is designed, when aggregated with the
improvements contemplated by Phase One Construction, to
accommodate the installation therein or thereon of five
printing presses, EDC shall disburse to The Times, in
accordance with Sec.2.3 hereof, a portion of the Funding
(in addition to any amounts already disbursed in
accordance with Sec.2.2(a)(1) above) in an aggregate amount
equal to $2,250,000.
(3) With respect to the aggregate of all of the Segments that
constitute Phase Three Construction, provided that prior to
or simultaneously with the first request for disbursement in
connection therewith, The Times delivers to EDC a letter
from the Architect or the Engineer of Record stating that
the improvements contemplated by such Construction Phase or
Segment or Segments thereof (it being understood and agreed
that such improvements may consist, at a minimum, of only
the piles on which a foundation and facility might be
constructed at a later date), as described in the Plans and
Specifications therefor, if constructed in accordance with
the specifications set forth in such Plans and
Specifications, is designed, when aggregated with the
improvements contemplated by Phase One
-34-
<PAGE>
Construction and Phase Two Construction, to accommodate
the installation therein or thereon of six printing
presses, EDC shall disburse to The Times, in accordance
with Sec.2.3 hereof, a portion of the Funding (in addition
to any amounts already disbursed in accordance with
Sec.2.2(a)(1) and (2) above) in an aggregate amount equal to
$2,250,000.
(4) With respect to the aggregate of all of the Segments that
constitute Phase Four Construction, provided that prior to
or simultaneously with the first request for disbursement in
connection therewith, The Times delivers to EDC a letter
from the Architect or the Engineer of Record stating that
the improvements contemplated by such Construction Phase or
Segment or Segments thereof (it being understood and agreed
that such improvements may consist, at a minimum, of only
the piles on which a foundation and facility might be
constructed at a later date), as described in the Plans and
Specifications therefor, if constructed in accordance with
the specifications set forth in such Plans and
Specifications, is designed, when aggregated with the
improvements contemplated by Phase One Construction, Phase
Two Construction and Phase Three Construction, to
accommodate the installation therein or thereon of seven
printing presses, EDC shall disburse to The Times, in
accordance with Sec.2.3 hereof, a portion of the Funding (in
addition to any amounts already disbursed in
-35-
<PAGE>
accordance with Sec.2.2(a)(1), (2) and (3) above) in an
aggregate amount equal to $3,750,000.
(5) With respect to the aggregate of all of the Segments that
constitute Phase Five Construction, provided that prior to
or simultaneously with the first request for disbursement in
connection therewith, The Times delivers to EDC a letter
from the Architect or the Engineer of Record stating that
the improvements contemplated by such Construction Phase or
Segment or Segments thereof (it being understood and agreed
that such improvements may consist, at a minimum, of only
the piles on which a foundation and facility might be
constructed at a later date), as described in the Plans and
Specifications therefor, if constructed in accordance with
the specifications set forth in such Plans and
Specifications, is designed, when aggregated with the
improvements contemplated by Phase One Construction, Phase
Two Construction, Phase Three Construction and Phase Four
Construction, to accommodate the installation therein or
thereon of eight printing presses, EDC shall disburse to The
Times, in accordance with Sec.2.3 hereof, a portion of the
Funding (in addition to any amounts already disbursed in
accordance with Sec.2.2(a)(1), (2), (3) and (4) above) in an
aggregate amount equal to $3,750,000.
(b) If The Times elects to construct more than one Construction Phase
simultaneously and/or sequentially, and/or elects to construct only one or
more Segment
-36-
<PAGE>
or Segments of one or more Construction Phases, without regard to whether such
Segment or Segments are constructed in a sequence contemplated by Phase Two
Construction, Phase Three Construction, Phase Four Construction and Phase Five
Construction, then provided that (i) EDC has approved the Plans and
Specifications for each such Construction Phase (or the Plans and
Specifications for the Aggregated Construction Phase or Segment or Segments
thereof which is to be constructed) in accordance with Sec.1.1 hereof, (ii)
The Times has filed such Plans and Specifications with the Buildings
Department, (iii) with respect to the Funding allocable to Phase One Construc-
tion, The Times has demonstrated to EDC's reasonable satisfaction in accordance
with Sec.2.2(a)(1) hereof the purchase or contract to purchase of the printing
presses specified in Sec.2.2(a)(1) hereof and with respect to the Funding
allocable to Phase Two Construction, Phase Three Construction, Phase Four
Construction and Phase Five Construction or any Segment or Segments thereof,
The Times has delivered to EDC the letter from the Architect or Engineer of
Record specified in Sec.2.2(a)(2), (3), (4) and (5) hereof, and (iv) the
Segment to be constructed is related to a Construction Phase that is not more
than two subsequent construction phases away from the last Construction Phase
that is to be constructed in its entirety, EDC shall disburse to The Times,
in accordance with Sec.2.3 hereof, the portion of the Funding equal to the
aggregate of the amounts allocated to each Construction Phase as set forth in
Sec.2.2(a) hereof. Thus, for example, if The Times elected to perform all
of the Construction Work included in Phase One Construction, Phase Two
Construction, Phase Three Construction, Phase Four Construction and Phase
Five Construction at the time that it constructed the Minimum Printing
Facility, all of the Funding payable in connection with such Construction
Work
-37-
<PAGE>
would be disbursed to The Times in accordance with Sec.2.3 hereof as and when
such Construction Work was performed. If, however, The Times elects to
perform the Construction Work included in Phase One Construction and the
Segment of the Construction Work identified as the driving of piles for a
foundation and/or foundation work included in Phase Two Construction, Phase
Three Construction, Phase Four Construction and Phase Five Construction, only
the Funding payable in connection with the Construction Work included in Phase
One Construction and the Segment of the Phase Two Construction and Phase Three
Construction would be disbursed to The Times. Funding for the Construction
Work included in the Segments of the Phase Four Construction and Phase Five
Construction would be disbursed to The Times only at such time as The Times
completed all of the Construction Work included in Phase Two Construction with
respect to the Segments of Phase Four Construction, and in Phase Three
Construction with respect to the Segments of Phase Five Construction (e.g. The
Times would not be reimbursed for driving piles for a Seven Press Facility
unless either (i) it was at the same time constructing at least the entire
Five Press Facility or (ii) it constructed at least the entire Five Press
Facility at a later date, in which case The Times would be reimbursed for such
Construction Work at such later date on which the entire Five Press Facility
was constructed).
(c) (i) The Times acknowledges and agrees that, notwithstanding
anything to the contrary contained in Sec.2.2(a) or Sec.2.2(b) above, the amount
of Funding to be disbursed to The Times with respect to each Construction Phase
as described in Sec.2.2(a) above, is based on the expectation that in connection
with the construction of each Construction Phase, The Times will construct a
Printing Facility containing a certain target aggregate square footage
-38-
<PAGE>
for either (x) the footprint of such facility (the "Target Footprint") or (y)
the building size of such facility (the "Target Building Size"). The Target
Footprint and Target Building Size for each Construction Phase (on an
aggregated basis, as applicable) is as follows:
Printing Facility Target Footprint Target Building Size
- ----------------- ---------------- --------------------
Minimum Printing Facility 220,000 360,000
Five Press Facility 282,000 465,000
Six Press Facility 345,000 570,000
Seven Press Facility 392,000 645,000
Eight Press Facility 440,000 720,000
The Target Footprint for a Printing Facility shall be relevant only if
The Times seeks disbursement of Funding in connection with such Printing
Facility for piling and/or foundation work without simultaneously constructing
such Printing Facility. The Target Building Size for a Printing Facility
shall be relevant only if The Times seeks disbursement of Funding in
connection with such Printing Facility if it is constructing such Printing
Facility promptly following the driving of piles and construction of the
foundation in connection therewith.
If the actual footprint or the actual building size, whichever is
relevant pursuant to the immediately preceding paragraph, related to any
Construction Phase for any Segment of any Construction Phase is more than ten
percent (10%) less than the Target Footprint or the Target Building Size, as
the case may be, allocable to such Construction Phase, as evidenced by the
Plans and Specifications submitted by The Times to the Buildings Department
with respect to such Construction Phase or Segment thereof, the amount of the
Funding to be disbursed by EDC to The Times with respect to such Construction
Phase or Segment thereof
-39-
<PAGE>
will be reduced by an amount equal to (i) the total percentage amount by which
the square footage of the footprint of the Printing Facility or the size of the
Printing Facility related to such Construction Phase, whichever is relevant
pursuant to the terms hereof, is less than the Target Footprint or the
Target Building Size for such Construction Phase, as the case may be, minus
(ii) ten percent (10%). Thus, for example, if The Times constructs a
Minimum Printing Facility consisting of a building size of 324,000 square
feet or more, EDC will disburse to The Times for the Eligible Costs incurred
in connection therewith, up to the full $3,000,000 (or $4,000,000, if
applicable) in Funding as provided in Sec.2.2(a)(1) hereof. If, at the same
time that The Times constructs the Minimum Printing Facility, it also
drives piles for the Six Press Facility, but does not at the
same time construct the Six Press Facility, and the piles driven
for the Six Press Facility are sufficient to accommodate a footprint
which, when aggregated with the footprint for the Minimum Printing
Facility, is 317,400 square feet (eight percent (8%) less than the 345,000
Target Footprint for the Six Press Facility), EDC will disburse to The Times
in connection with Eligible Costs therefor, Funding in an amount equal to (i)
$3,000,000 (or $4,000,000, if applicable) for the construction of the Minimum
Printing Facility, and (ii) $4,500,000 (the sum of $2,250,000 allocated to the
Five Press Facility and $2,250,000 allocated to the Six Press Facility). If,
however, The Times drives piles for, and at the same time constructs, the Six
Press Facility and the total square footage of the Six Press Facility, when
aggregated with the square footage of the Minimum Printing Facility, is
484,000 square feet (fifteen percent (15%) less than the 570,000 Target
Building Size for the Six Press Facility), the $4,500,000 Funding allocable to
the Five Press Facility and the Six Press Facility will be reduced by five
-40-
<PAGE>
percent (5%) to $4,275,000.
(ii) The Parties further acknowledges and agrees that the portion of the
Funding allocated to any Construction Phase, once reduced in accordance with
Sec.2.2(c)(i) above, will never be increased or further reduced. Thus, if The
Times constructs a Minimum Printing Facility and at the same time drives piles
for the Six Press Facility sufficient to accommodate a footprint which, when
aggregated with the footprint for the Minimum Printing Facility, is 276,000
square feet (twenty percent (20%) less than the 345,000 Target Footprint for
the Six Press Facility), the $4,500,000 Funding allocable to the Five Press
Facility and the Six Press Facility will be reduced by ten percent (10%) to
$4,050,000. If, several years later, The Times constructs the Six Press
Facility and the total square footage of the Six Press Facility,
when aggregated with the square footage of the Minimum Printing
Facility, is 570,000 square feet (the Target Building Size for the
Six Press Facility), The Times will not be entitled to, and EDC will not be
required to disburse to The Times, the difference between the $4,500,000
originally allocated to The Times with respect to the Five Press Facility and
the Six Press Facility and the reduced amount of $4,050,000. If the Times
constructs a Minimum Printing Facility and at the same time drives piles for
the Six Press Facility sufficient to accommodate a footprint which, when
aggregated with the footprint for the Minimum Printing Facility, is 345,000
square feet (the Target Footprint for the Six Press Facility) and EDC
disbursed to The Times in connection therewith the $3,000,000 (or $4,000,000,
if applicable) Funding allocable to the Minimum Printing Facility and the
$4,500,000 Funding allocable to the Five Press Facility and the Six Press
Facility, and at a later date The Times constructs the Six Press Facility and
the total square footage of the Six
-41-
<PAGE>
Press Facility is less than the Target Building Size for the Six Press
Facility, The Times will not be required to refund any portion of the
$4,500,000 Funding allocable to the Five Press Facility and the Six Press
Facility.
(iii) Notwithstanding anything to the contrary contained herein, except
as set forth in Sec.2.4 herein with respect to an abandonment of the Project,
The Times shall not be in default of this Agreement or otherwise be required to
reimburse any portion of the Funding previously disbursed to The Times in
accordance herewith, if The Times drives piles for any Printing Facility
larger than the Minimum Printing Facility and does not subsequently construct
such Printing Facility.
(d) Notwithstanding anything to the contrary contained herein, the
Parties acknowledge and agree that in the event that The Times elects to
reconstruct the Whitestone Road as provided in Funding Agreement #4, that
certain portion of the Funding allocated pursuant to Sec.2.2(a)(5) herein to
Phase Five Construction may be reallocated to Funding Agreement #4 to pay for
the eligible costs incurred by The Times in connection with the reconstruction
of the Whitestone Road. The actual amount of such portion of the Funding to
be so reallocated will be equal to the Total Reimbursement Amount (as such
term is defined in Funding Agreement #4), determined in accordance with
Sec.2.1(a) of Funding Agreement #4, provided that in no event shall such amount
be more than the $3,750,000 allocated hereunder to Phase Five Construction.
The Times agrees that it shall not have right to seek the reallocation to
Funding Agreement #4 of any portion of the Funding other than the portion of
the Funding allocated hereunder to Phase Five Construction, and that once the
reallocation of the Funding has occurred; (i) The Times shall have no further
right to seek any additional reallocation and (ii) any portion of the
-42-
<PAGE>
$3,750,000 not reallocated to Funding Agreement #4 shall remain allocated to
Phase Five Construction.
Sec.2.3 Disbursements. (a) Subject to satisfaction of, and in accordance
--------------
with the terms and conditions of this Article Two, Article Four and Article
Five hereof, and provided that neither EDC nor the City shall have commenced
an action to terminate this Agreement or the Lease, as the case may be, due to
the existence of an uncured Event of Default under this Agreement or an
uncured "Event of Default" (as defined in the Lease) under the Lease, as the
case may be, EDC shall disburse the Funding to The Times after receipt by EDC
of all items required by Sec.4.2 hereof, in installments equal to, the amount of
the requested disbursement set forth in each Requisition, which amount shall
be equal to, as appropriate in each instance, either (A) the product of (i)
the schedule of values of the Eligible Costs for which disbursement is sought
and (ii) the percentage of the Construction Work indicated on such schedule of
values then completed (as certified by the Architect or the Engineer of
Record), less the sum of the following: (x) an amount equal to the retainage,
if any, retained by The Times or its Construction Manager or General
Contractor, as the case may be (the "Retainage"); (y) the total amount
previously disbursed by EDC hereunder with respect to such Eligible Costs, if
any; and (z) the total amount otherwise previously disbursed to The Times for
the Construction Work that at the time of the disbursement request was
ineligible for reimbursement with the Funding pursuant to any provision of
this Agreement, or (B) the product of (i) the quantities of materials
installed at the Premises and (ii) the unit price for such materials, less the
sum of the following: (x) an amount equal to the Retainage; (y) the total
amount previously disbursed by EDC hereunder with respect
-43-
<PAGE>
to such materials, if any, and (z) the total amount otherwise previously
disbursed to The Times for such materials that at the time of the disbursement
request was ineligible for reimbursement with the Funding pursuant to any
provision of this Agreement; provided, however, that any amounts requested for
the payment of Site Preparation Work shall be requisitioned and disbursed in
accordance with (B) above only.
(b) All disbursements shall be made by check at the principal office of
EDC, or at such other place within the City of New York as EDC may designate.
Disbursement requests shall be submitted within the time periods and in the
manner provided therefor in Article 4.
(c) No portion of the Funding shall be advanced for materials not
incorporated into the Premises.
(d) Disbursements of the Funding shall be no more frequent than once
every thirty (30) days and shall be made within ten (10) Business Days after
the date EDC receives from The Times a complete disbursement request,
reasonably satisfactory to EDC, together with the Requisition and all such
other documentation, as may be reasonably required or requested by EDC in
support of such Requisition. Notwithstanding anything to the contrary
contained herein, The Times shall not submit the first Requisition prior to
the Construction Commencement Date and shall not submit any Requisition for
the disbursement of funds related to a particular Construction Phase unless
The Times has commenced, or has caused the commencement of, the driving of
piles for the foundation related to such Construction Phase.
-44-
<PAGE>
Sec.2.4 The Times's Abandonment of the Project. (a) Notwithstanding
------------------------------------------
anything to the contrary contained herein, if, at any time during the Term,
The Times "abandons the Project" as such phrase is described in clauses (i)
through (iv) of Sec.2.4(c) hereof, EDC shall have the right to terminate this
Agreement and cease all further disbursements of the Funding, and The Times
shall reimburse EDC dollar for dollar for the Funding or any portion thereof
disbursed by EDC prior to the date of such abandonment substantially in
accordance with the illustration for such reimbursement set forth in the
"Reimbursement Schedule" attached hereto as Appendix C and hereby made a part
hereof, including interest thereon at the rate of the lesser of either (x)
nine percent (9%) per annum or (y) the City's cost of borrowing, from the date
on which EDC disbursed such funds to The Times until The Times fully
reimburses EDC for such funds (the amount of Funding to be reimbursed to EDC
in accordance with the foregoing sentence, together with the interest accrued
thereon, is referred to as the "Reimbursement Amount"). Notwithstanding
anything to the contrary contained herein, if The Times "abandons" the Project
as such phrase is described in clause (v) of Sec.2.4(c) hereof, EDC shall have
the right to terminate this Agreement and cease all further disbursements of
the Funding, and The Times shall reimburse EDC in an amount equal to the
Funding or any portion thereof disbursed by EDC prior to the date of such
abandonment amortized over time substantially in accordance with the
illustration for such amortization set forth in the "Amortized Reimbursement
Schedule" attached hereto as Appendix C-1 and hereby made a part hereof,
including interest thereon at the rate of (i) the lesser of either (x) nine
percent (9%) per annum or (y) the City's cost of borrowing, from the date on
which EDC disbursed such funds to The Times until The Times fully
-45-
<PAGE>
reimburses EDC for such funds (the amount of Funding to be reimbursed to EDC
in accordance with the foregoing sentence, together with the interest accrued
thereon, is referred to as the "Amortized Reimbursement Amount"). Unless The
Times elects to exercise its option to purchase the Premises in accordance
with Article 21 of the Lease (in which case The Times shall pay to EDC the
Reimbursement Amount or the Amortized Reimbursement Amount, as applicable,
prior to such purchase as more particularly set forth in Article 21 of the
Lease), The Times shall reimburse such funds to EDC (together with any
interest accrued thereon) in equal quarterly installments commencing on the
Abandonment Date and continuing thereafter for a period of five (5) years.
The Times shall have the right, at any time during such five (5) year period,
to prepay all or any portion of the Funding to be reimbursed (together with
any interest accrued thereon), without penalty or premium.
(b) Intentionally omitted.
(c) For purposes hereof, The Times shall be deemed to have "abandoned"
the Project upon the occurrence of any of the following:
(i) The Times notifies EDC, in writing, that it intends to abandon the
Project as of the date specified in such notice, or
(ii) at any time during the period between the Commencement Date and
the Operational Date, The Times permanently relocates
substantially all of the jobs and/or functions directly related to
the printing, collating, bundling and distribution of the New York
--------
Times newspaper located, on the date of this Agreement, at The
-----
Times's 43rd Street facility (the "43rd Street Facility"), to
-46-
<PAGE>
another facility outside of New York City, or
(iii) at any time after the Construction Commencement Date, The Times
fails to make reasonable and diligent efforts to construct the
Minimum Printing Facility to completion, and as a result of such
failure The Times shall not Substantially Complete construction of
the Minimum Printing Facility by the Scheduled Completion Date
(subject to Unavoidable Delays), and such failure continues for
thirty (30) days after written notice from the landlord under the
Lease and/or EDC, or
(iv) by the date (the "Outside Operation Date") which is five (5) years
after Substantial Completion of construction of the Minimum
Printing Facility, The Times shall have failed to equip such
Minimum Printing Facility with four printing presses and such
other equipment as is necessary to enable such Minimum Printing
Facility to be operational primarily for the printing, collating,
bundling and distribution of newspapers, magazines and other
periodicals or printed materials and to commence the operation of
such Minimum Printing Facility, or
(v) at any time after the date on which The Times commences the
operation of the Minimum Printing Facility for the printing,
collating, bundling and distribution of newspapers, magazines and
other periodicals or printed materials (the "Operational Date"),
The Times ceases such operation and, after a five (5) year period
(subject to Unavoidable Delays), fails to resume the operation of
such Minimum Printing Facility as a major printing facility
-47-
<PAGE>
serving the New York City metropolitan area and such failure
continues for thirty (30) days after written notice from the
landlord under the lease and/or EDC.
The "Abandonment Date" shall be either, (I) the date specified in the
notice described in clause (i) above, (II) the date on which The Times
permanently relocates substantially all of the jobs and/or functions directly
related to the printing, collating bundling and distribution of the New York
--------
Times newspaper located at the 43rd Street Facility to another facility
- -----
outside of New York City, (III) the date which is thirty (30) days after the
notice described in clause (iii) above (provided, that prior to the expiration
of such thirty (30) day period, The Times has not commenced to cure the
failure described in such notice), (IV) the Outside Operational Date, or (V)
the date which is thirty (30) days after the notice described in clause (v)
above (provided, that prior to the expiration of such thirty (30) day period,
The Times has not commenced to cure the failure described in such notice).
(d) Notwithstanding anything to the contrary contained in this Sec.2.4,
The Times shall not be deemed to have "abandoned" the Project as defined in
Sec.2.4(c) above, if it assigns its interest in the Lease in accordance with the
provisions of the Lease and the assignee of such interest in the Lease
performs, or continues to perform, the obligations of The Times set forth in
the Lease with respect to the construction, equipping and operation of the
Minimum Printing Facility.
(e) The provisions of this Sec.2.4 shall survive the expiration or
termination of this Agreement.
-48-
<PAGE>
ARTICLE THREE - TERM
--------------------
Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon
-----
the execution of this Agreement by both Parties and the unconditional delivery
of this Agreement by each Party to the other (the "Commencement Date") and
shall expire upon the earlier to occur of (i) the complete disbursement by EDC
of up to either (x) $15,000,000 of the Funding if The Times commenced the
Phase One Construction on or prior to the Fourth Anniversary Date or (y)
$16,000,000 of the Funding if The Times commenced the Phase One Construction
after the Fourth Anniversary Date, (ii) the Abandonment Date, (iii) the
expiration or earlier termination of the term of the Lease (including by
reason of The Times's exercise of its right to purchase the Premises in
accordance with Article 21 of the Lease), or (iv) the termination of this
Agreement as hereinafter provided.
-49-
<PAGE>
ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT
------------------------------------------
Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to
----------------------------------
disburse any of the Funding to The Times unless, at any time prior to or
simultaneously with the first request for disbursement of the Funding but no
later than ten (10) days prior to the date on which the first payment of the
Funding to be made pursuant to this Agreement with respect to each Segment,
Construction Phase or Aggregated Construction Phase is sought (except as
otherwise specified herein), EDC shall have received the following documents,
together with a cover sheet (a "Completed Cover Sheet") listing the items
submitted:
(a) if not previously submitted by The Times, certificates, in form
and substance reasonably satisfactory to EDC, evidencing the
insurance policies referred to in Appendix B, and in accordance
with the sections of Article 7 of the Lease that are in effect
during construction of any Segment, Construction Phase or
Aggregated Construction Phase, naming the City and EDC as
additional insureds, providing not less than thirty (30) days
notice of cancellation to the City and EDC; provided, however,
that EDC shall also have the right to review at the offices of The
Times, and make copies of, the originals of the policies evidenced
by such certificates, upon written request therefor;
(b) intentionally omitted;
(c) a legal opinion by counsel to, or general counsel of, The Times
(addressed to EDC), in the form annexed hereto as Exhibit A, to
the effect that (I) this Agreement is legal, valid and binding
upon and enforceable against The
-50-
<PAGE>
Times in accordance with its terms (subject, as to enforceability,
to principles of equity and applicable bankruptcy, insolvency and
other laws affecting the rights of creditors generally), and (II)
The Times has been duly authorized to execute and deliver this
Agreement;
(d) copies of any then executed Construction Contract(s) (and any then
executed first level subcontracts entered into between the
Construction Manager or the General Contractor and a contractor
with respect to which The Times is seeking reimbursement) for the
performance of the Construction Work, containing all the
provisions required pursuant to Sec.1.2(c) hereof and trade payment
breakdown's and/or a schedule of values of Eligible Costs with
respect to which The Times is then seeking reimbursement;
(e) if not previously submitted by The Times, a set of the Plans and
Specifications with respect to the Segment, Construction Phase or
Aggregated Construction Phase then being constructed bearing the
stamp of the Architect or Engineer of Record;
(f) a collateral assignment by The Times to EDC of The Times' right,
title and interest to the Plans and Specifications for the
Segment, Construction Phase or Aggregated Construction Phase then
being constructed, subject to any commercially reasonable rights
or reservations reserved by the Architect or Engineer of Record
(it being understood that if EDC exercises its rights under such
collateral assignment, EDC shall, as of the date of such
assignment, assume all of the future obligations and liabilities
of The Times with respect
-51-
<PAGE>
to such Plans and Specifications); and
(g) a certificate, in the form annexed hereto as Exhibit B, of an
authorized officer of The Times certifying the specimen signature
of each officer, director or agent of The Times authorized to
deliver Requisitions under this Agreement.
Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC
-------------------------------------------------------------
shall not be obligated to make the first disbursement of the Funding or any
subsequent disbursement with respect to each Segment, Construction Phase or
Aggregated Construction Phase unless, in addition to the conditions contained
in Sec.4.1, the following documents, in form and substance reasonably
satisfactory to EDC, together with a Completed Cover Sheet, shall, except to
the extent previously submitted by The Times, be delivered to EDC at least ten
(10) days in advance of the date on which each (except as otherwise indicated
in this Sec.4.2) payment is sought:
(i) copies of all Approvals necessary to lawfully perform the
Construction Work for which the Funding is being sought in
accordance with the Plans and Specifications;
(ii) a requisition executed and certified by an authorized
representative of The Times (and addressed to EDC), setting forth
(w) the amount of the requested disbursement, (x) a schedule of
values of the Eligible Costs for which the disbursement is sought
indicating the amount requested for each item for which
disbursement is sought, (y) a certification by such authorized
representative, that each item of Eligible Costs has not
previously been
-52-
<PAGE>
reimbursed under this Agreement, and (z) a list of Contractors, and
subcontractors and material suppliers of such Contractors whose work is
covered by the requisition and whose total contract price exceeds $50,000,
indicating the amount requested with respect to each such Construction
Contract or subcontract. The requisition shall be accompanied by the
certification described in Sec.6.1 hereof and copies of (I) all Construction
Contracts (and first level, direct subcontracts of the Construction Manager or
General Contractor) on account of which payment is being sought that have not
been previously delivered, containing all the provisions required pursuant to
Sec.1.2(c) hereof and trade payment breakdowns and/or a schedule of values of
Eligible Costs with respect to such contract (or for Construction Contracts
and subcontracts that have been previously delivered, a statement to that
effect and copies of any amendments thereof); (II) a copy of an "Application
and Certificate for Payment", substantially in the forms annexed hereto as
Exhibit C, completed and executed by the Construction Manager or the General
Contractor (as the case may be), with respect to all work performed by
Contractor(s), subcontractors and material suppliers covered by The Times's
requisition, together with a statement of the Architect, Engineer of Record or
Construction Manager addressed to EDC that, to the Architect's,
-53-
<PAGE>
Engineer of Record's or Construction Manager's knowledge, the Construction
Work performed by the Contractor, subcontractor and material suppliers covered
by the requisition (A) has been performed to the Architect's, Engineer of
Record's or Construction Manager's reasonable satisfaction substantially in
accordance with the Plans and Specifications and (B) has been performed in
accordance with the Requirements, and stipulating, in the Architect's,
Engineer of Record's or Construction Manager's professional opinion, the
percentage of the Construction Work that has been completed or, as the case
may be, the quantities of materials installed; (III) in connection with each
disbursement request other than the first disbursement request, partial
releases of liens from all Contractors (and first level, direct subcontractors
of the Construction Manager or General Contractor), in respect to Construction
Work completed under a Construction Contract or subcontract and for which the
Eligible Costs incurred in connection therewith have been reimbursed with the
Funding pursuant to a prior Requisition; and (IV) invoices from first level,
direct subcontractors of the Construction Manager or General Contractor in
support of the amount being requisitioned (the items described in this
paragraph (ii), collectively the "Requisition");
(iii) (A) in connection with the first such disbursement, a photostatic
copy of the current title report by a title insurer reasonably
satisfactory to EDC (EDC hereby acknowledging that Chicago Title
Insurance Company, First American Title Insurance Company, Ticor
Title Guarantee Company or any of their respective affiliates are
reasonably satisfactory title insurers) containing a description
of the Premises, and UCC, judgment and federal tax lien searches
against the Premises; (B) in connection with subsequent
disbursements, a
-54-
<PAGE>
photostatic copy of a certificate of title continuation
indicating no change in the state of title and no survey
exceptions or liens in excess of $250,000 not contemplated by the
development of the Premises pursuant to this Agreement or
previously approved by EDC;
(iv) such additional documents, data or information reasonably
requested by EDC within ten (10) days after EDC's receipt of the
Requisition with respect to the Premises and the Construction Work
or in support of the Requisition that are customarily requested by
EDC when funding or paying for work similar to the Construction
Work and without which EDC could not reasonably be expected to
disburse the Funding prior to the receipt thereof; provided
however, that in no event shall EDC withhold or delay any portion
of the Funding to which such additional documents, data or
information do not apply; and
(v) with respect to each Contractor and each first level, direct
subcontractor of the Construction Manager or General Contractor
performing Construction Work for which Funding is being
requisitioned, a written statement by DLS certifying that such
Contractor or subcontractor has complied with the City's equal
employment requirements under mayoral Executive Order No. 50
(April 25, 1980), as amended, if applicable, or evidence from The
Times or DLS that Executive Order No. 50 or its successor does not
apply; it being understood that such written statement or other
satisfaction by DLS for such Contractor or subcontractor only
needs to be submitted at the time of the submission of the first
requisition covering such Contractor's or subcontractor's work and
-55-
<PAGE>
that the noncompliance of any one such Contractor or subcontractor shall only
affect EDC's funding obligations relating to Construction Work performed by
such Contractor or subcontractor and shall not in any way affect EDC's funding
obligations with respect to Construction Work performed by other Contractors
or subcontractors in compliance, and it being further understood that,
notwithstanding anything to the contrary contained herein, for so long as New
York State Labor Law Sec.220 or any successor statute requires contractors
performing work on public works projects to pay journey-level wages to
trainees, the trainee requirements of Executive Order No. 50 shall not be
applicable to the Construction Work, the Contractors and the subcontractors
and the Contractors and the subcontractors shall in no event be deemed to be
in noncompliance with Executive Order No. 50 due to noncompliance with such
trainee requirements.
Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this
-------------------------
Article Four shall be directed to EDC's Vice President for Construction.
-56-
<PAGE>
ARTICLE FIVE
------------
REPRESENTATIONS, WARRANTIES AND GUARANTIES OF THE TIMES
-------------------------------------------------------
To induce EDC to disburse the Funding, The Times represents and warrants
as follows:
Sec.5.1 Organization; Standing. The Times is a corporation duly organized
-----------------------
and validly existing under the laws of the State of New York and has all
requisite power, authority and legal right to execute, deliver and perform its
obligations under this Agreement. A copy of The Times's certificate of good
standing from the Secretary of State of the State of New York is attached
hereto as Appendix D, and hereby made a part hereof.
Sec.5.2 Intentionally Omitted.
Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery
--------------------------------------
of this Agreement by The Times is not, and the performance of this Agreement
by The Times will not be, effectively prohibited or prevented by, or in breach
of (i) the certificate of incorporation or by-laws of The Times, (ii) to the
best of The Times's knowledge, any presently existing or effective law,
judgment, order, writ, injunction, decree, rule or regulation of any court or
Governmental Authority applicable to The Times, or (iii) any agreement,
instrument or undertaking which is binding on The Times.
-57-
<PAGE>
Sec.5.4 No Litigation. As of the date of this Agreement there are no
--------------
suits or proceedings pending or, to the best of The Times's knowledge,
threatened against The Times which would materially affect the development and
improvement of the Premises, the consummation of the transactions contemplated
by this Agreement, or the full performance of the obligations of The Times
under this Agreement.
-58-
<PAGE>
ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC
------------------------------------------------------
To induce The Times to enter into this Agreement and perform the
Construction Work, EDC represents and warrants as follows:
Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation,
------------------------
organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation
Laws and has all the requisite power, authority and legal right to execute,
deliver and perform its obligations under this Agreement.
Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has
--------------------------------------------
been duly authorized, executed and delivered by EDC and constitutes a legally
binding obligation of EDC enforceable in accordance with its terms. A legal
opinion by general counsel of EDC (addressed to The Times) providing that this
Agreement is legal, valid and binding upon and enforceable against EDC in
accordance with its terms (subject, as to enforceability, to principles of
equity and applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), is attached hereto as Appendix E and hereby
made a part hereof. A certificate of the Secretary of EDC, dated as of the
date of this Agreement, certifying to the adoption of resolutions by the Board
of Directors of EDC authorizing the execution and delivery of this Agreement
by EDC is attached hereto as Appendix F and hereby made a part hereof.
-59-
<PAGE>
ARTICLE SIX
-----------
COVENANTS
---------
Sec.6.1 Requisitions Update The Times's Representations. The Times
-------------------------------------------------
covenants that each Requisition presented to EDC under Article Four shall be
accompanied by a completed certification, in the form attached hereto as
Exhibit D.
Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the
-------------------------------------------------------
Term, The Times shall:
(a) comply with all of the terms, conditions and covenants now or in
the future binding upon or applicable to The Times under this Agreement; and
(b) do all things necessary to maintain and keep in full force and
effect its existence, rights and privileges under the laws of the State of New
York.
Sec.6.3 Maintenance of and Compliance with Insurance Requirements. If the
----------------------------------------------------------
Times elects to obtain and maintain commercial general liability insurance
written under a "wrap around" program for the entire Project, The Times shall
maintain or cause to be maintained at The Times's expense such insurance in
the amounts and in accordance with the applicable provisions, set forth in
Article 7 of the Lease. The Times shall comply with all of the applicable
provisions of such insurance policies. Nothing contained in this Sec.6.3 is
intended to confer any rights upon any third party.
-60-
<PAGE>
Sec.6.4 Maintenance of Office. The Times will maintain an office in the
----------------------
City of New York where notices with respect to this Agreement may be delivered
to it and inspections and audits in accordance with Sec.6.7 hereof may be
conducted.
Sec.6.5 Compliance with Applicable Law. (a) The Times shall include the
-------------------------------
following requirements, as applicable, in all Construction Contracts, and
shall require, or cause to be required, all subcontracts with respect to the
Construction Work to include the same requirements, so that the Contractor(s)
and any subcontractors and materials suppliers shall agree, in substance, with
respect to the Construction Work, the following:
(i) to comply with (1) the applicable provisions of City and New
York State equal employment and affirmative action laws
applicable to construction contractors, which are annexed to
and made a part of this Agreement as Appendix G (consisting
of "Construction Contract Rider" pursuant to mayoral
Executive Order No. 50, provided, however that the trainee
requirements set forth therein shall be inapplicable for so
long as New York State Labor Law Sec.220 or any successor
statute requires contractors performing work on public works
projects to pay journey-level wages to trainees), and the
filing of any required construction employment reports with
DLS on the forms annexed hereto as Appendix H, (2) New York
State Labor Law Sec.220-e, and (3) City Administrative Code
Sec.6-108;
(ii) to comply with the applicable provisions of the New York
City Noise
-61-
<PAGE>
Control Code (Administrative Code Sec.24-216, as amended, and
related regulations); and
(iii) to pay no less than prevailing wage rates and supplemental
benefits to laborers, workers and mechanics pursuant to
Sec.220(3) of the New York State Labor Law in accordance with
the currently scheduled rates, as amended from time to time.
(b) The Times shall use its good faith efforts to promptly, diligently
and continuously enforce the full and faithful compliance by the Contractors
with whom The Times enters into Construction Contracts with the provisions of
law referred to in Sec.6.5(a) hereof, and shall use its good faith efforts to
cause such Contractors to enforce such compliance by the subcontractors and
materials suppliers hired by such Contractors in connection with the
Construction Work.
Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall
-----------
not assign this Agreement, except that The Times may assign this Agreement
without EDC's prior written consent to an Affiliate or to any assignee to
which The Times is permitted to assign its interest in the Lease pursuant to
the terms thereof; provided that such assignee performs, or continues to
perform, the obligations of The Times set forth in the Lease with respect to
the construction, equipping and operation of the Minimum Printing Facility and
does not "abandon" the Project, and further provided that (i) such Affiliate
or assignee assumes all the rights and obligations of The Times under this
Agreement, (ii) all the representations, warranties and covenants made by The
Times in this Agreement shall be similarly made by
-62-
<PAGE>
such Affiliate or assignee, and (iii) The Times provides to EDC a copy of the
executed written agreement evidencing such assignment and assumption.
Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate,
-----------------------
readily auditable records and accounts with supporting documentation, in
accordance with sound accounting principles, of (i) all of the Eligible Costs,
(ii) all of its receipts and expenditures in connection with the Funding, and
(iii) all financial accounts and transactions maintained or undertaken in
connection with this Agreement as it relates to Eligible Costs. The Times
shall make such records available for inspection and audit at The Times's
place of business within New York City by EDC and the City at reasonable times
and upon reasonable advance notice. All such records and accounts shall be
maintained for a period of six years after the completion of the Construction
Phase to which such records and accounts apply. The provisions of this Sec.6.7
shall survive the expiration or earlier termination of this Agreement.
Sec.6.8 Intentionally omitted.
Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and
------------------------------------
hold the proceeds of the Funding (including any insurance proceeds arising out
of any casualty affecting property purchased with the Funding prior to
substantial completion of any Segment, Construction Phase or Aggregated
Construction Phase) as a trust fund to be applied exclusively for the payment
of Eligible Costs (or reimbursement to The Times for
-63-
<PAGE>
the payment of Eligible Costs) in accordance with the terms of this Agreement
and, except for such insurance proceeds which are in excess of the amount
necessary to pay for materials, equipment or other property purchased or
reimbursed with the Funding prior to substantial completion of any Segment,
Construction Phase or Aggregated Construction Phase, shall not use any part of
the same for any other purpose.
Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of
-----------------------------
the Funding shall not constitute a waiver of any default by The Times on
account of defective construction work in performance of the Construction Work
or deviation from the Plans and Specifications. No part of the Funding shall
be disbursed for the correction of non-conforming work.
Sec.6.11 Participation by Women and Minority Owned Businesses
----------------------------------------------------
(a) EDC is committed to maximizing meaningful participation by women-
owned business enterprises ("WBEs") and minority-owned business enterprises
("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its
contracting opportunities. In accordance therewith, The Times agrees to cause
to be awarded at least $4 million of the Project Work (the "Guaranteed W/MBE
Participation Dollar Value") to W/MBEs and to use its good faith efforts to
cause to be awarded an additional $6 million of the Project Work (the "Good
Faith W/MBE Participation Dollar Value") to W/MBEs. The Project Work with
respect to which the Guaranteed W/MBE Participation Dollar Value is fulfilled
and to which good faith efforts are used to fulfill the Good Faith W/MBE
Participation
-64-
<PAGE>
Dollar Value may or may not, in the sole discretion of The Times, include all
or any portion of the Construction Work.
(b) In order to achieve the Guaranteed W/MBE Participation Dollar
Value and to use good faith efforts to achieve the Good Faith W/MBE
Participation Dollar Value, The Times will (subject to its right described in
Sec.6.11(c)(iii) below to utilize alternative methods to achieve the Guaranteed
W/MBE Participation Dollar Value and to use good faith efforts to achieve the
Good Faith W/MBE Participation Dollars Value) instruct its Construction
Manager (or its Contractors, as the case may be) to identify, and cause its
subcontractors and material suppliers to the extent reasonably feasible to
identify, (i) those portions or aspects of the Project Work that such
Construction Manager (or Contractors, or their subcontractors or material
suppliers) intends to competitively bid and with respect to which the
Construction Manager (or Contractors, or their subcontractors or material
suppliers) believes there are available, locally, W/MBEs that are equally or
substantially equally qualified or acceptable to perform such portions or
aspects of the Project Work as are the non-W/MBE contractors, subcontractors
or material suppliers that such Construction Manager (or Contractor, or its
subcontractors or material suppliers) intends to include on its bid list for
such portions or aspects of the Project Work, and (ii) one or more W/MBEs that
the Construction Manager (or Contractors, or their subcontractors or material
suppliers) believe are available locally and that are equally or substantially
equally qualified or acceptable to perform the portions or aspects of the
Project Work that are identified in accordance with (i) above. The Times will
(subject to its right described in Sec.6.11(c)(iii) below to utilize alternative
methods to achieve the Guaranteed W/MBE Participation
-65-
<PAGE>
Dollar Value and to use good faith efforts to achieve the Good Faith W/MBE
Participation Dollar Value) further instruct its Construction Manager (or
Contractors) to include, or cause its subcontractors and material suppliers to
the extent reasonably feasible to include, at least one such W/MBE on each bid
list for each such portion or aspect of the Project Work that the Construction
Manager (or Contractors, or their subcontractors or material suppliers)
intends to competitively bid with respect to which there are such equally or
substantially equally qualified or acceptable W/MBEs. Once a quarter,
commencing with the three (3) month anniversary of the date The Times
commenced construction of any Segment, Construction Phase or Aggregated
Construction Phase of the Project and every three (3) months thereafter until
both the Guaranteed W/MBE Participation Dollar Value and the Good Faith W/MBE
Participation Dollar Value have been achieved, The Times shall provide EDC
with a status report (the "W/MBE Report") as to (x) the dollar value of
contracts with respect to the Project Work theretofore awarded to W/MBEs, the
identities of such W/MBEs with a trade breakdown, and a statement as to
whether each such W/MBE was the lowest bidder, and (y) the identities of all
W/MBEs theretofore included in bid lists with respect to the Project Work who
were not selected, with a trade breakdown, and a statement as to whether each
such W/MBE was the lowest bidder. Notwithstanding anything to the contrary
contained herein, The Times's failure to provide EDC with the W/MBE Report
shall not constitute a material default the occurrence of which would give EDC
the right to terminate this Agreement in accordance with Sec.7.1(c) hereof
unless such failure continues after receipt of written notice from EDC
requesting that The Times provide the W/MBE Report within ten (10) days of such
notice, in which event EDC may
-66-
<PAGE>
give the twenty (20) Business Day notice required by Sec.7.1(c) to establish
that an Event of Default has occurred.
(c) Nothing contained in this Sec.6.11 shall be construed to (i) require
The Times or its Construction Manager (or Contractors, or their subcontractors
or material suppliers) to select a W/MBE that is not the lowest bidder (except
to the extent that they may elect to do so, in their sole discretion, in order
to achieve the Guaranteed W/MBE Participation Dollar Value), (ii) require The
Times or its Construction Manager (or Contractors, or their subcontractors or
material suppliers) to solicit bids with respect to all portions or aspects of
the Project Work, (iii) prevent The Times from utilizing alternative methods
to achieve the Guaranteed W/MBE Participation Dollar Value and to use good
faith efforts to achieve the Good Faith W/MBE Participation Dollar Value;
provided, however, that The Times shall provide EDC with reasonable advance
notice of its decision to utilize alternative methods and a reasonable
opportunity to comment on, and/or consult with, The Times as to the
characteristics of such alternative methods, or (iv) require The Times or its
Construction Manager (or Contractors, or their subcontractors or material
suppliers) to continue to utilize any of the procedures set forth in Sec.6.11(b)
above, or any other procedure adopted by The Times in accordance with clause
(iii) above, to maximize participation by W/MBEs after such time as The Times
has achieved both the Guaranteed W/MBE Participation Dollar Value and the Good
Faith W/MBE Participation Dollar Value. In the event that the number of
W/MBEs submitting lowest bids are insufficient to achieve the Guaranteed W/MBE
Participation Dollar Value, The Times shall nonetheless achieve the
-67-
<PAGE>
Guaranteed W/MBE Participation Dollar Value by means selected by The Times in
its sole discretion, which means may, but shall not be required to, include
selecting W/MBEs that do not submit the lowest bids.
(d) In order to be considered W/MBEs for purposes hereof, WBEs and
MBEs must have received certification, as WBEs and/or MBEs, from the New York
City Department of Business Services ("DBS"). Businesses that have been
certified as being women or minority owned by the New York State Department of
Economic Development or the Port Authority of New York and New Jersey may be
eligible to receive expedited certification from DBS, after completing the DBS
"Expedited Certification Affidavit" in the form of Exhibit E attached hereto.
Each of these entities maintain current lists of certified W/MBEs. The Times
is encouraged to contact these entities in order to obtain copies of their
current lists of certified W/MBEs who may be qualified to participate, either
as Contractors, subcontractors or materials suppliers, in the Project Work.
In the event that EDC is unable to verify that one or more of the W/MBEs
included in the W/MBE Report has been certified as a WBE or MBE by DBS, The
Times shall submit verification acceptable to EDC showing that all W/MBEs
identified in the W/MBE Report are certified as WBEs and/or MBEs by DBS.
(e) The Times shall provide for the participation of W/MBEs in the
Project Work at a level at least equal to the Guaranteed W/MBE Participation
Dollar Value. Both the Guaranteed W/MBE Participation Dollar Value and the
Good Faith W/MBE Participation Dollar Value are a part of this Agreement. The
Times cannot reduce the Guaranteed W/MBE Participation Dollar Value or the
Good Faith W/MBE Participation Dollar Value.
-68-
<PAGE>
Sec.6.12 No Liens. The Times will cause the Project to be constructed
---------
free and clear of liens of mechanics, material persons and suppliers,
including public improvement liens, or claims for any such liens in excess of
$250,000 subject to The Times's right to cause any such lien to be removed or
bonded within sixty (60) days after the placement of such lien.
Sec.6.13 Intentionally omitted.
Sec.6.14 Intentionally omitted.
Sec.6.15 Intentionally omitted.
Sec.6.16 MacBride Principles. The Times hereby agrees that with respect
---------------------
to any Construction Contract entered into for the performance of the
Construction Work and for which The Times intends to, or does in fact, seek
reimbursement therefor with the Funding, The Times shall (i) include in such
Construction Contract the requirements of the MacBride Principles Rider,
attached hereto as Appendix J, and (ii) require its Contractors (A) to comply
with the applicable covenants and representations set forth in Appendix J, and
(B) to cause its contractors, subcontractors, and materials suppliers
performing work pursuant to Construction Contracts receiving Funding, to also
comply with the requirements of Appendix J. Notwithstanding anything to the
contrary contained herein, the provisions of this Sec.6.16 shall not apply to
any contractor, subcontractor or materials supplier with respect to which there
is not another contractor, subcontractor or materials supplier to perform
-69-
<PAGE>
work or supply materials of comparable quality at a comparable price.
Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion
------------------------
of the Funding to The Times shall not constitute a waiver of EDC's right to
require compliance with any of the covenants contained in this Article Six or
otherwise contained in this Agreement.
-70-
<PAGE>
ARTICLE SEVEN - DEFAULT
-----------------------
Sec.7.1 Events of Default. An "Event of Default" shall exist if any of
------------------
the following shall have occurred:
(a) intentionally omitted.
(b) if The Times shall have applied the Funding in violation of the
covenant set forth in Sec.6.9 and such misapplication was not corrected within
ten (10) Business Days after receipt of written notice thereof; or
(c) if The Times fails to duly observe or perform any of the material
covenants and agreements contained in this Agreement (other than the covenants
contained in Sec.6.9) and if such failure continues for twenty (20) Business
Days after receipt of written notice to The Times by EDC specifying with
particularity such material default and requiring such material default to be
remedied; provided, however, that if because of Unavoidable Delays or if the
nature of the default is such that The Times cannot reasonably be expected to
cure the same within such period, then such material default shall not be an
Event of Default if, within such period (subject to Unavoidable Delays), The
Times commences in good faith to cure such material default and (subject to
Unavoidable Delays) diligently prosecutes such cure to completion; or
(d) if an "Event of Default" (as defined in the Lease) has occurred
under the Lease and EDC has taken action to terminate the Lease in accordance
with the terms thereof; or
(e) if any representation or warranty by The Times contained in this
Agreement
-71-
<PAGE>
shall be materially false when made or reaffirmed and such representation or
warranty materially adversely affects The Times's ability to enter into this
Agreement and perform the Project Work in accordance with the terms hereof.
Sec.7.2 Default Remedies; Exculpation.
------------------------------
(a) Except as otherwise set forth in Sec.7.2(d)(ii) and Sec.9.11 hereof,
The Times Indemnitees shall not be liable for consequential damages under this
Agreement.
(b) Upon an Event of Default, EDC may exercise any right or remedy
permitted to it by law, in equity, or under this Agreement, including, without
limitation, the right to obtain restitution of any portion of the Funding
which is applied by The Times, The Times's employees, agents or contractors in
violation of Sec.6.9, with interest from the date of EDC's disbursement at the
Late Charge Rate. Without limiting the generality of the foregoing, upon an
Event of Default, EDC shall have the right to elect to terminate this
Agreement (reserving, however, all remedies provided in this Article Seven or
existing otherwise) or, with respect to an Event of Default described in
Sec.7.1(b) or (d) above, to make no further disbursements until such Event of
Default is remedied or determined not to be an Event of Default. With respect
to an Event of Default described in Sec.7.1(c) above, EDC shall have the right
to elect to terminate this Agreement or to make no further disbursements until
such Event of Default is remedied: provided, however, that in the event that
The Times disputes EDC's determination that an Event of Default described in
Sec.7.1(c) above has occurred, The Times shall have the right to submit such
dispute to arbitration in accordance
-72-
<PAGE>
with the provisions of Article 34 of the Lease and if the arbitrator decides
that no Event of Default as described in Sec.7.1(c) above has occurred, EDC
shall immediately disburse to The Times all of the Funding that, under the terms
of this Agreement, should have been disbursed to The Times during the period of
the dispute with interest at the Short Term Late Charge Rate and recommence
the further disbursement of the Funding, as appropriate.
(c) Subject to the provisions of Sec.7.2(d) hereof, the liability of The
Times under this Agreement for damages or otherwise shall be limited to (i)
The Times's interest in any sums advanced hereunder but not heretofore
expended by it and (ii) the proceeds of any insurance policies covering or
relating to the Construction Work or the Premises (to the extent of the
Funding advanced under this Agreement and actually received by The Times). In
no event shall EDC look to the property or assets of any of the individuals
who are the directors, officers, employees, shareholders, agents or servants
of The Times, and no property or assets of any of the aforesaid Persons shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of The Times's obligations under this Agreement, except in the
event such individual has misapplied the Funding as described in Sec.7.2(d)
hereof and then only to the extent of the actual dollar amount that such
individual has misapplied the Funding; provided, however, that if such
misapplication was the result of such individual's fraudulent conduct, such
individual's liability shall be as set forth in Sec.7.2(d)(i) below.
(d) (i) Each of the individuals described in Sec.7.2(b) above shall be
personally liable (as distinguished from collective liability), to the full
extent provided by law, in equity,
-73-
<PAGE>
and by this Agreement if any such relevant individual shall have applied the
Funding in violation of the covenant contained in Sec.6.9 of this Agreement and
such misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct, in which case such liability shall not be limited as
provided above.
(ii) The Times shall be liable, to the full extent provided by
law, in equity, and by this Agreement if The Times shall have applied the
Funding in violation of the covenant contained in Sec.6.9 of this Agreement and
such misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct on the part of The Times as opposed to the fraudulent
conduct of an individual not authorized by The Times to act in such a manner,
in which case such liability shall not be limited as provided above.
(e) No course of dealing on the part of EDC or any failure on the part
of EDC to exercise any right shall operate as a waiver of such right or
otherwise prejudice EDC's remedies. No right or remedy conferred upon or
reserved to EDC is intended to be exclusive of any other right or remedy.
Every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy contained in this Agreement or
existing at any time at law or in equity, or otherwise, and may be exercised
from time to time and as often and in such order as EDC may deem appropriate.
-74-
<PAGE>
The exercise of any right or remedy shall not be construed as an election or a
waiver of any other right or remedy. No delay or omission of EDC in
exercising any right or remedy occurring upon an Event of Default shall impair
any such right or remedy or constitute a waiver of or acquiescence in such
Event of Default.
(f) The provisions of this Sec.7.2 shall survive the expiration or
termination of the Term.
-75-
<PAGE>
ARTICLE EIGHT - NOTICES
-----------------------
Sec.8.1 Notices. All notices under this Agreement shall be in writing and
--------
shall be deemed to have been sufficiently given or served for all purposes as
of the date when sent by hand, or by national overnight courier service, or by
certified or registered mail, return receipt requested, addressed as follows
(or to such other addresses as may from time to time be designated by EDC or
The Times by notice delivered to the other in accordance with this Section):
(i) if to EDC:
New York City Economic Development Corporation
110 William Street
New York, N.Y. 10038
Attention: President
with a copy via ordinary mail to General Counsel, at the
same address
and to:
New York City Law Department
100 Church Street
New York, New York 10007
Attention: Chief, Economic Development Division;
(ii) if to The Times:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Solomon B. Watson, IV, Esq.
General Counsel
-76-
<PAGE>
with a copy via ordinary mail to David Thurm, Executive
Director of Project Development, at the same address
and with a copy in the same manner sent to The Times to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin Polevoy, Esq.
Sec.8.2 Disbursement Submissions. All Requisitions and other submissions
-------------------------
for disbursements required to be made pursuant to Article Four of this
Agreement shall be addressed as directed in Sec.4.3 hereof.
-77-
<PAGE>
ARTICLE NINE - GENERAL CONDITIONS AND COVENANTS
-----------------------------------------------
The following covenants and conditions shall be applicable throughout
the Term:
Sec.9.1 Conflict of Interests. No member, officer, director or employee
----------------------
of EDC or the City, or their designees, consultants or agents; no member of
the governing body of the City and no public official of the City who
exercises or exercised any functions or responsibilities with respect to the
subject matter of this Agreement during his/her tenure, if known to The Times,
shall have any interest, direct or indirect, in any contract or subcontract,
or the proceeds thereof, for work to be performed in connection with the
Construction Work or in any activity or benefit arising out of or in
connection with the performance of the Construction Work. Upon receiving
actual notice or knowledge of any of the circumstances specified in the
preceding sentence, The Times shall deliver notice to EDC of the circumstances
and immediately shall use good faith efforts to cause the Persons affected to
terminate their interest in the prohibited contract or property. The Times
shall require the Construction Manager or General Contractor (as the case may
be) and the Contractors, subcontractors and materials suppliers to make
appropriate representations in writing that they, their employees and
principals do not have any conflict of interest prohibited under this Sec.9.1,
and to covenant to use good faith efforts to cause the prohibited persons to
terminate their interest in the relevant contract or property upon demand by
The Times.
-78-
<PAGE>
Sec.9.2 No Liability of Individuals. No officer, employee, director,
-----------------------------
member, agent or other person authorized to act on behalf of EDC or the City
shall have any personal liability in connection with this Agreement or any
default by EDC or the City.
Sec.9.3 Anti-Boycott Provisions.
------------------------
The Times hereby covenants and agrees that, to the extent applicable to
the Construction Work:
(a) The Times is not participating, nor shall it participate during the
Term, in an international boycott in violation of the provisions of the Export
Administration Act of 1979, as amended, or the regulations promulgated
thereunder,
(b) upon the final determination by the United States Department of
Commerce or any other agency of the United States as to conviction of The
Times for participation in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder, EDC may, at its option, declare a default
under this Agreement (which default is subject to cure by The Times in
accordance with the terms of this Agreement), and
(c) The Times shall comply in all respects with the provisions of
Sec.6-114 of the Administrative Code of the City and the rules and regulations
issued by the Comptroller of the City thereunder.
-79-
<PAGE>
Sec.9.4 Governing Law. The provisions of this Agreement shall be governed
--------------
and interpreted in accordance with the laws of the State of New York.
Sec.9.5 Liability of EDC. (a) Except as otherwise set forth in Sec.9.11(b)
-----------------
hereof, EDC shall not be liable for consequential damages under this Agreement
to The Times or to any other Person in any matter arising out of the
financing, development and construction of the Project.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, if (i) EDC defaults in the disbursement of the Funding for which it
is obligated, pursuant to the terms of this Agreement, to disburse to The
Times or in the payment of any other monetary amount owed to The Times
pursuant to the provisions of this Agreement and fails to cure such default
within thirty (30) days after The Times delivers notice (the "EDC Default
Notice") to EDC of such default, or (ii) the Funding shall not be made
available to EDC by the City, in whole or in part for any reason, then,
provided that The Times proceeds with the construction of the Project or any
Construction Phase thereof, for each dollar not so disbursed or paid by EDC or
made available to EDC by the City, The Times shall have the right to (y)
offset against future Rental (other than Impositions) due under the Lease and
against College Point Improvement Fund Payments due under the Lease in an
amount equal to the Funding not so disbursed by EDC, and (z) offset against
future Rental (other than Impositions and College Point Improvement Fund
Payments) due under the Lease in an amount equal to any other monetary amount
which EDC is obligated to pay
-80-
<PAGE>
under this Agreement and has not so paid, until such time as EDC recommences
the disbursement of the Funding or pays such other monetary amount. The Times
agrees that the right to an offset against Rental (other than Impositions) and
College Point Improvement Fund Payments as hereinabove described is The
Times's sole remedy against EDC arising out of the failure of EDC to receive
the Funding from the City, except as otherwise provided in this Agreement.
(c) In the event that (i) EDC has defaulted in the performance of any
obligation on EDC's part to perform under this Agreement other than the
disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of
the Funding and continues to be in default thereof after the receipt of the
EDC Default Notice and expiration of the thirty (30) day cure period provided
therein, The Times shall have all of its rights at law and in equity against
EDC.
(d) Except as otherwise provided in this Agreement; (i) no course of
dealing on the part of The Times or any failure on the part of The Times to
exercise any right shall operate as a waiver of such right or otherwise
prejudice The Times's remedies, (ii) no right or remedy conferred upon or
reserved to The Times is intended to be exclusive of any other right or
remedy, (iii) every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy contained in this
Agreement or existing at any time at law or in equity, or otherwise, and may
be exercised from time to time and as often and in such order as The Times may
deem appropriate, and (iv) the exercise of any right or remedy shall not be
construed as an election or a waiver of any
-81-
<PAGE>
other right or remedy. No delay or omission of The Times in exercising any
right or remedy occurring upon EDC's failure to disburse the Funding in
accordance with this Agreement or to otherwise perform its obligations in
accordance with the terms of this Agreement shall impair any such right or
remedy or constitute a waiver of or acquiescence in any such failure.
Sec.9.6 Amendments. This Agreement may not be amended, waived or
-----------
terminated orally, but only by an instrument in writing signed by both
parties.
Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be
-----------------------
binding upon and shall inure to the benefit of EDC and The Times and their
respective successors and permitted assigns.
Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1
--------------------
hereof, The Times acknowledges that the City capital budget dollars which form
the Funding are not, and shall not be deemed to be, an assignment of any funds
received by EDC from the City. The Times confirms that any right to the
Funding arises exclusively under this Agreement.
Sec.9.9 Counterparts. This Agreement may be executed in one or more
-------------
counterparts which, when taken together, shall constitute one and the same
document.
-82-
<PAGE>
Sec.9.10 Interpretation. The provisions of the Lease incorporated by
---------------
reference into this Agreement are intended to supplement the other provisions
of this Agreement. In the event of any conflict between the Lease provisions
and the other provisions of this Agreement relating to the performance of the
Project Work, the provisions of the Lease shall control.
Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their
----------
respective departments, offices, officers, members, directors, employees and
agents shall collectively be referred to as "the Public Parties". The Times
shall defend, indemnify and hold harmless the Public Parties, from and against
any and all claims, damages (including consequential damages awarded to third
parties against the Public Parties), judgments, liabilities and causes of
action whatsoever to which they may be subject arising out of the acts or
omissions of The Times, its contractors, subcontractors, agents, employees or
material suppliers, and any and all Persons, in connection with the
performance of the Project Work, or because of any negligence, fault or
default of The Times, its contractors, subcontractors, agents, employees or
material suppliers. The obligation of The Times to indemnify and hold
harmless the Public Parties shall include but not be limited to the payment of
any and all costs and reasonable legal fees as may be actually incurred by the
Public Parties. The termination of this Agreement shall not release The Times
from any liability to the Public Parties arising out of any act or omission of
The Times in connection with this Agreement.
(b) In this Sec.9.11(b), The Times and its officers, members, directors,
employees and agents shall collectively be referred to as "The Times
Indemnitees". EDC shall
-83-
<PAGE>
indemnify and hold harmless The Times Indemnitees from and against any and all
claims, damages (including consequential damages awarded to third parties
against The Times Indemnitees), judgments, liabilities and causes of action
whatsoever to which they may be subject to the extent caused as a result of
the negligence or misconduct of EDC or its agents or professional consultants
arising out of or in connection with EDC's or its agents' or professional
consultants' inspections of the Premises or uncovering of work in accordance
with Sec.1.1(e) hereof. The obligation of EDC to indemnify and hold harmless The
Times Indemnitees pursuant to this Sec.9.11(b) shall include, but not be limited
to, the payment of any and all costs and reasonable legal fees as may be
actually incurred by The Times Indemnitees in connection with any such claim,
damage, judgment, liability or causes of action. The termination of this
Agreement shall not release EDC from any liability to The Times Indemnitees
described in this Sec.9.11(b).
Sec.9.12 No Agency. Neither The Times nor any of its employees,
-----------
contractors or subcontractors is, shall be or shall represent that he, she or
it is an agent, servant or employee of EDC or the City by virtue of this
Agreement or by virtue of any approval, permit, license, grant, right or
authorization given by the EDC or the City or any of their officers, agents or
employees. The Times shall be solely responsible for the work, direction,
compensation and personal conduct of its officers, agents, employees and
subcontractors.
-84-
<PAGE>
Sec.9.13 Venue
-----
(a) Any and all claims asserted by or against EDC or by or against The
Times arising under this Agreement or related hereto shall be heard and
determined either in the courts of the United States ("Federal Courts")
located in the City or in the courts of the State of New York ("New York State
Courts") located in the City of New York. To effect this agreement and
intent, EDC and The Times agree and, where appropriate, shall require each
Contractor to agree, as follows:
(i) If either Party initiates any action against the other Party
in Federal Court or in New York State Court, service of
process may be made on The Times either in person, or by
registered or certified mail (return receipt requested)
addressed to the office of the General Counsel of The Times
at the address set forth in Article Eight of this Agreement,
or to such other address as The Times may provide to EDC in
writing, and service of process may be made on EDC, either
in person, or by registered or certified mail (return
receipt requested) addressed to EDC at its address as set
forth in Article Eight of this Agreement, or to such other
address as EDC may provide to The Times in writing.
(ii) With respect to any action between EDC and The Times in New
York State Court, each Party hereby expressly waives and
relinquishes any rights it might otherwise have (A) to move
to dismiss on grounds of forum non conveniens, (B) to remove
to Federal Court wholly outside
-85-
<PAGE>
New York City, and (C) to move for a change of venue to New
York State Court outside New York City.
(iii) With respect to any action between EDC and the Times in
Federal Court located in New York City, each Party expressly
waives and relinquishes any right it might otherwise have to
move to transfer the action to a Federal Court outside the
City of New York.
(iv) If either Party commences any action against the other Party
in a court located other than in the City and State of New
York, then, upon request of the Party against whom the
action is brought, the Party bringing the action, shall
either consent to a transfer of the action to a court of
competent jurisdiction located in the City and State of New
York or, if the court where the action is initially brought
will not or cannot transfer the action, then to dismiss such
action without prejudice, and may thereafter reinstitute the
action in a court of competent jurisdiction in New York
City.
Sec.9.14. Investigations; Cooperation.
----------------------------
(a) Definitions. As used in this Sec.9.14:
------------
(i) "Investigation" shall mean any investigation, audit or
inquiry conducted by the Department of Investigation with respect
to the obtaining and/or performance of Transaction Documents or
any of them,
-86-
<PAGE>
(ii) "Department of Investigation" shall mean the Department of
Investigation of the City or any City department or agency
succeeding to the functions thereof,
(iii) "Commissioner" shall mean the Commissioner or Acting
Commissioner of the Department of Investigation,
(iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and
Economic Development of the City (or the officer of the City
succeeding to the functions of that office),
(v) "Entity" shall mean any firm, partnership, corporation,
association or Person that receives monies, benefits, licenses,
leases or permits from or through the City or otherwise transacts
business with EDC or the City,
(vi) "Member" shall mean any Person associated with another
Person or entity as a partner, director, officer, principal or
employee, and
(vii) "Transaction Documents" shall mean the Lease, this
Agreement, Funding Agreement #2, Funding Agreement #3 and Funding
Agreement #4.
(b) Cooperation with Investigations. Subject to the exclusions set
---------------------------------
forth in paragraph (c) of this Sec.9.14, The Times shall during the term of this
Agreement:
(i) cooperate fully and faithfully, and utilize good faith
efforts to cause its Members to cooperate fully and
faithfully, with any Investigation; and
(ii) report, and utilize its good faith efforts to cause its
Members to report, in writing to the Commissioner, any
solicitation of which The Times
-87-
<PAGE>
has actual knowledge of money, goods, requests for future
employment or other benefit or thing of value, by or on
behalf of any employee of the City or any other Person, for
any purpose relating to the procurement or obtaining and/or
performance of any Transaction Document by The Times.
(c) Exclusions. The provisions of Sec.9.14(b) above shall not apply:
-----------
(i) to any information or document known, prepared or obtained
by The Times or its Members (and the sources of such
information or documents), that is protected from compelled
disclosure by any present or future "Shield Law" or any
other statute, constitutional provision, rule, regulation or
case law related to the rights of reporters and/or news
organizations;
(ii) to any Person who refuses to testify based on his or her
privilege against self-incrimination after having been given
assurances that his or her statement, and any information
from such statement, will not be used against such Person in
any subsequent criminal proceeding in any forum (provided,
however, that any Person given such assurances shall have
the right to have the legal sufficiency of such assurances
adjudicated by a court of competent jurisdiction as a
precondition of the applicability of Sec.9.14(b) to such
Person); and
(iii) to any construction contract or other agreement (or the
obtaining or
-88-
<PAGE>
performance thereof) with parties other than the City or
EDC, including without limitation, any contract or agreement
being funded through any Transaction Document.
(d) Hearing. If The Times or any Member of The Times refuses to
--------
testify in an Investigation and, in connection with such failure to testify,
the Commissioner determines that The Times has failed to cooperate in the
Investigation in violation of the provisions of Sec.9.14(b) hereof, then the
Commissioner may request the Deputy Mayor to convene a hearing (the
"Hearing"), upon not less than five (5) days written notice to The Times, to
determine if any penalties should be imposed for The Times's failure to so
cooperate in accordance with this Sec.9.14.
(e) Adjournments of Hearing
-----------------------
(i) The Times shall have the right to require that the Hearing
be adjourned for a period of not more than thirty (30) days.
(ii) The Deputy Mayor may grant other adjournments of the
Hearing, in the exercise of his or her reasonable
discretion; provided however, that in the case of an
adjournment occasioned by The Times's failure to appear, the
Deputy Mayor may, if he or she determines that there was no
reasonable cause for the requested adjournment or failure to
appear, impose an Interim Penalty.
(iii) The City shall not incur any penalty or damages for delay or
otherwise occasioned by an adjournment of the Hearing.
-89-
<PAGE>
(f) Penalties.
----------
(i) The Deputy Mayor may impose a penalty during an adjournment
due to The Times's failure to appear or proceed with the
scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim
Penalty") of not more than $1,000 per day for each day of
such adjournment, provided, however, that such daily
penalties shall cease to accrue from and after the date that
The Times makes itself available to appear at or proceed
with the scheduled Hearing or gives written notice to the
Deputy Mayor that it does not intend to appear at or proceed
with the scheduled Hearing, in which event the Deputy Mayor
shall have the right to continue the Hearing and reach a
determination without The Times's participation.
(ii) If, after the Hearing, the Deputy Mayor determines that The
Times failed to cooperate in the Investigation in violation
of this Sec.9.14, and The Times fails to commence to cooperate
fully in such Investigation within five (5) Business Days
following its receipt of written notice of such
determination, the Deputy Mayor may:
(A) impose a penalty ("Final Penalty") which may not, in
conjunction with any Interim Penalty or Final Penalty
imposed during the term of this Agreement under this
Agreement and/or during the term of the Lease with
respect to any other
-90-
<PAGE>
Transaction Document, exceed $500,000 in the aggregate
during the term of the Lease; and/or
(B) disqualify The Times, for a period not to exceed five
(5) years, from submitting bids for, or transacting
business with, or entering into or obtaining any
contract, lease, permit or license with or from EDC or
the City, other than as contemplated in the
Transaction Documents.
Notwithstanding anything to the contrary contained herein, in the event
that The Times is found after the Hearing to have failed to cooperate in the
Investigation, but nonetheless is not subjected to a Final Penalty because The
Times commences to cooperate fully in such Investigation within five (5)
Business Days following its receipt of written notice of such determination,
The Times shall be liable for the cost of conducting such Hearing in an amount
not to exceed $5,000.
(g) Criteria for Determination. The Deputy Mayor shall consider and
---------------------------
address in reaching his or her determination and in assessing an appropriate
Interim Penalty, Final Penalty, and/or disqualification, the factors in
clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if
relevant and appropriate, the criteria established in clauses (iii) and (iv)
of this Sec.9.14(g), in addition to any other information which may be relevant
and appropriate:
(i) The Times's good faith endeavors or lack thereof to cooperate
fully and faithfully with the Investigation, including but not
limited to the discipline,
-91-
<PAGE>
discharge or disassociation of any Person failing to testify, the
production of accurate and complete books and records, and the
forthcoming testimony of all other Members, agents, assignees or
fiduciaries whose testimony is sought (the Deputy Mayor shall take
into account whether the discipline, discharge or disassociation
of any Persons failing to testify would violate any union or other
contract),
(ii) the relationship of the Person who refused to testify to The
Times, including, but not limited to, whether the Person whose
testimony is sought has an ownership interest in The Times and/or
the degree of authority and responsibility the Person has within
The Times,
(iii) The nexus of the testimony sought to The Times and the
Transaction Documents, and/or
(iv) the effect a penalty may have on an unaffiliated and
unrelated party or Entity that has a significant interest in The
Times, provided that (x) such unrelated party or Entity has given
actual notice to the Commissioner or EDC upon the acquisition of
the interest, or (y) at the Hearing such unrelated party or Entity
gives notice and proves that such significant interest was
previously acquired; under either circumstance, such unrelated
party or Entity must present evidence at the Hearing demonstrating
the potential adverse impact a penalty will have on such party or
Entity.
-92-
<PAGE>
(h) Payment of Penalties. Any Interim or Final Penalty hereunder
----------------------
shall, upon imposition thereof, be applied to reduce the aggregate of Offset
Amounts (as such term is defined in the Lease) then available to The Times
under Article 4 of the Lease and the balance, if any, shall be paid promptly
as additional Rental, or at the landlord under the Lease's option, such
balance shall be applied to reduce EDC's obligations with respect to any
undisbursed Funding.
(i) Exclusive Remedy. Notwithstanding anything to the contrary
------------------
contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall
be the sole and exclusive remedies available to EDC in the event that The
Times breaches any of its obligations under this Sec.9.14, and no other
remedies, including, without limitation, the remedies set forth elsewhere in
this Agreement for defaults by The Times in the performance of its obligations
under this Agreement, shall be applicable to a breach by The Times of any of
its obligations under this Sec.9.14.
(j) Right to Dispute Determinations of Deputy Mayor. Nothing
-------------------------------------------------------
contained herein shall be construed to limit in any manner whatsoever The
Times's right or ability to challenge or seek to enjoin, overturn, set aside
or modify any action taken, determination made or penalty imposed by the
Deputy Mayor pursuant to the provisions of this Sec.9.14.
(k) Concurrent Lease Obligation. The obligations of The Times under
-----------------------------
this Sec.9.14 constitute a portion of the obligations of The Times under Article
40A of the Lease, and nothing contained herein shall be construed as
expanding, enlarging or increasing in any way, or as being separate from or in
addition to, the obligations and liabilities of The Times
-93-
<PAGE>
pursuant to Article 40A of the Lease.
Sec.9.15. Intentionally omitted.
Sec.9.16 Maximum Interest Rate
---------------------
In the event that any interest payable under this Agreement shall be
deemed to exceed the maximum rate permitted by law, then the amount of
interest to be paid shall be the maximum rate so permitted.
Sec.9.17 Captions
--------
The captions in this Agreement are inserted for convenience of reference
only and in no way define, describe or limit the scope or intent of this
Agreement or any of the provisions hereof.
Sec.9.18 Gender, Etc.
------------
The gender used in this Agreement shall be deemed to refer to the
masculine, feminine, or neuter gender, as the identity of the contracting
parties may require. The singular shall include the plural and vice versa as
the context may dictate.
-94-
<PAGE>
Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without
------------------
the prior written consent of The Times, except that EDC shall have the right,
upon ten (10) Business Days prior written notice, to assign this Agreement
and/or EDC's rights under this Agreement, without any further consent on the
part of The Times, to the City.
Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees
-----------------------------------
that all non-monetary obligations set forth in this Agreement as being
obligations of The Times shall apply only to, and be performed by, The New
York Times Newspaper Division of The New York Times Company (the "Newspaper
Division") and its employees and agents, and EDC shall look solely to the
Newspaper Division for the performance of such non-monetary obligations;
provided, however, that any default by the Newspaper Division in the
performance of such non-monetary obligations shall be treated with the same
force and effect pursuant to the applicable provisions of this Agreement as if
such default had been committed by The Times.
-95-
<PAGE>
ARTICLE TEN - AGREEMENT OF THE CITY
-----------------------------------
Sec.10.1 City's Agreement to Fund EDC. The City, by executing this
--------------------------------
Agreement as it effects this Article Ten only, (i) acknowledges that it is
becoming a signatory to this Agreement as a material inducement to The Times
to enter into this Agreement, (ii) warrants and represents that the
Consolidated Contract is in full force and effect and legally binding upon the
City; and (iii) covenants and agrees to provide EDC with City capital budget
funds in such amounts and at such times as will permit EDC to comply with its
obligations to disburse the Funding pursuant to the provisions of this
Agreement, without regard to whether the Consolidated Contract is then in full
force and effect or whether EDC is in compliance with the terms thereof.
Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation
----------------------------
Counsel (addressed to The Times) to the effect that this Agreement is legal,
valid and binding upon the City with respect to the provisions of this Article
Ten in the form attached hereto as Appendix L, is hereby being delivered to
The Times concurrently herewith.
Sec.10.3 The Times's Rights Against the City. In the event that the City
------------------------------------
has defaulted in the performance of any obligation of the City pursuant to
this Article Ten and continues to be in default thereof after notice from The
Times and a thirty (30) day cure period, the Times shall have all of its
rights at law and in equity against the City.
-96-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By: /s/ Carl Weisbrod
--------------------------
Carl Weisbrod
Title: President
THE NEW YORK TIMES COMPANY
By: /s/ Katharine P. Darrow
--------------------------
Katharine P. Darrow
Title: Senior Vice President
THE CITY, BY SIGNING IN THE
PLACE PROVIDED BELOW,
AGREES TO BE BOUND BY THE
PROVISIONS OF ARTICLE TEN HEREOF:
THE CITY OF NEW YORK
By: /s/ Barry F. Sullivan
------------------------------
APPROVED AS TO FORM:
By: /s/
------------------------------
Acting Corporation Counsel
-97-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came
Carl Weisbrod, to me known, who, being by me duly sworn, did depose and
say that s/he resides at c/o 110 William St. NY NY; that s/he is
the President of New York City Economic Development Corporation, the
corporation described in and which executed the foregoing instrument; and that
s/he signed her/his name thereto by authority of the board of directors of
such corporation.
Frieda L. Dweck
-------------------------------
Notary Public
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17thday of December, 1993,before me personally came
Katharine P. Darrow, to me known, who, being by me duly sworn, did depose
and say that s/he resides at 16 Garden Place, Brooklyn, NY; that s/he is
the Senior V.P. of The New York Times Company, the corporation described
in and which executed the foregoing instrument; and that s/he signed her/his
name thereto by authority of the board of directors of such corporation on
behalf of such corporation.
Beverly Sturr
------------------------------
Notary Public
-98-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993, before me personally came
Barry F. Sullivan, to me known, who, being by me duly sworn, did depose
and say that s/he resides at c/o City Hall, NY, NY; that s/he is
the Deputy Mayor of The City of New York and the same person who executed the
foregoing instrument; and that s/he acknowledged that s/he signed her/his name
thereto on behalf of The City of New York and pursuant to the authority vested
in her/him.
Frieda L. Dweck
-----------------------------
Notary Public
-99-
<PAGE>
Appendix C: NEW YORK TIMES FUNDING AGREEMENT #1 As a result of an
Abandonment as described in Section 2.4(c)(i-iv) of Funding Agreement #1.
<TABLE> <CAPTION>
Assumptions
Funding Amount (per press)*: Repayment Assumptions:
---------------------------- -----------------------
<S> <C> <C> <C>
Phase One (4 presses) $3,000,000 Term of Lease 25
Phase Two (5 presses) $2,250,000 Lesser of: 9.00%
Phase Three (6 presses) $2,250,000 or City's borrowing 9.00%
cost(25 yr bonds)
Phase Four (7 presses) $3,750,000 Interest Calculation: Annual
Phase Five (8 presses) $3,750,000
----------
Total $15,000,000
</TABLE>
Examples
Example #1:
NYT commences Phases One/Two and Three in Year 3, and does not diligently
pursue completion and
Abandonment of the Project occurs pursuant to all of the terms and conditions
of Funding Agreement #1.
Phases One/Two/Three $7,500,000
Grant:
Example #2:
NYT commences and substantially completes Phase One Construction in Year 1
and receives capital grant of $3 million. NYT commences Phases Two and Three
Construction in Year 3 and receives capital grant of $4.5 million. In
Year 6, either NYT does not equip the facility or relocates substantially
all employees to Stamford and Abandonment of the Project occurs pursuant to
all of the terms and conditions of Funding Agreement #1.
<TABLE>
<S> <C> <C> <C>
Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
</TABLE>
<PAGE>
ILLUSTRATIVE REIMBURSEMENT SCHEDULES
<TABLE> <CAPTION>
Example #1 Example #2
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Year Project Status Principal I Year Project Status Principal I Principal II
---- -------------- ----------- ---- -------------- ----------- ------------
End Year 1 Vacant 0 End Year 1 Const/Disbursmnt 3,000,000
2 Vacant 0 2 Const 3,000,000
3 Const/Disbursmnt 7,500,000 3 Const/Disbursmnt 3,000,000 4,500,000
4 Const 7,500,000 4 Construction 3,000,000 4,500,000
5 Const Ceases 7,500,000 5 Construction 3,000,000 4,500,000
6 Const 7,500,000 6 Relocation/Abdmn 3,000,000 4,500,000
Cease/Abdmnt
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
Reimbursement Amount**:
-----------------------
Example #1
----------
Phase One/Two/Three Grant
($7.5 million) + (7.5 X 9% X
4 Yrs) = $10,200,000
Example #2
----------
Phase One Grant ($3 million)
+ (3.0 X 9% X 6 Yrs)
+ Phase Two/Three Grant ($4.5 million) + ($4.5 X 9% X 4 yrs) = $10,740,000
Notes:
*Assumes full building size. Grant will be reduced in accordance with
Section 2.2(c) of Funding Agreement #1 if building size is reduced.
** Assumes repayment to EDC in one payment; interest for multi-year
repayment not included.
(nytpay4)
</TABLE>
<PAGE>
Appendix C-1: NEW YORK TIMES FUNDING AGREEMENT #1
<TABLE><CAPTION>
As a result of an Abandonment as described in Section 2.4(c)(v) of Funding Agreement #1.
Assumptions
- -----------
Funding Amount (per press)*: Repayment Assumptions:
- ---------------------------- ----------------------
<S> <C> <C> <C>
Phase One (4 presses) $3,000,000 Term of Lease 25
Phase Two (5 presses) $2,250,000 # Yrs before Abandonment: 5
Phase Three (6 presses) $2,250,000 Lesser of: 9.00%
Phase Four (7 presses) $3,750,000 or City's 9.00%
borrowing cost(25
yr bonds)
Phase Five (8 presses) $3,750,000 Interest Annual
----------
Calculation:
Total $15,000,000
</TABLE>
Examples:
- ---------
Example #1 :
- ------------
NYT commences Phase One Construction in Year 1 and receives capital grant of
$3 million. NYT commences Phases Two and Three Construction in Year 10 and
receives capital grant of $4.5 million. NYT ceases operation in Year 14 and
does not resume within 5 years and an Abandonment of the Project occurs
pursuant to all the terms and conditions of Funding Agreement #1.
Phase One Grant: $3,000,000 Phase Two/Three Grant: $4,500,000
Amortization Period: 25 Years Amortization Period: 15 Years
Amount Amortized Annually: 120,000 Amount Amortized Annually: 300,000
Example #2 :
- ------------
NYT commences Phase One, Two and Three Construction in Year 1 and receives
capital grant of $7.5 million. NYT operates for 5 years and ceases operation
for 4 years before commencing construction of Phases Four/Five in Year 13.
NYT commences operation but ceases operation in Year 19 and does not resume
within 5 years and an Abandonment of the Project occurs pursuant to all the
terms and conditions of Funding Agreement #1.
Phase One Grant: $7,500,000 Phase Four/Five Grant: $7,500,000
Amortization Period: 25 Years Amortization Period: 13 Years
Amount Amortized Annually: 300,000 Amount Amortized Annually: 576,923
<PAGE>
ILLUSTRATIVE AMORTIZATION REIMBURSEMENT SCHEDULES
<TABLE><CAPTION>
Example #1 Example #2
- ---------- ----------
Year Project Status Principal I Principal II Year Project Status Principal I Principal II
---- -------------- ----------- ------------ ---- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
End Year 1 Const/Disbursmnt 3,000,000 End Year 1 Const/Disbursmnt 7,500,000
2 Const 2,880,000 2 Const 7,200,000
3 Const 2,760,000 3 Const 6,900,000
4 Operation 2,640,000 4 Operation 6,600,000
5 Operation 2,520,000 5 Operation 6,300,000
6 Operation 2,400,000 6 Operation 6,000,000
7 Operation 2,280,000 7 Operation 5,700,000
8 Operation 2,160,000 8 Operation 5,400,000
9 Operation 2,040,000 9 Cease Op-Yr 1 5,100,000
10 Operation/Cont 1,920,000 4,500,000 10 Cease Op-Yr 2 5,100,000
11 Operation/Cont 1,800,000 4,200,000 11 Cease Op-Yr 3 5,100,000
12 Operation 1,680,000 3,900,000 12 Cease Op-Yr 4 5,100,000
13 Operation 1,560,000 3,600,000 13 Const/Operation 4,800,000 7,500,000
14 Cease Op-Yr 1 1,440,000 3,300,000 14 Operation 4,500,000 6,923,077
15 Cease Op-Yr 2 1,440,000 3,300,000 15 Operation 4,200,000 6,346,154
16 Cease Op-Yr 3 1,440,000 3,300,000 16 Operation 3,900,000 5,769,231
17 Cease Op-Yr 4 1,440,000 3,300,000 17 Operation 3,600,000 5,192,308
18 Abndnmnt-Yr 5 1,440,000 3,300,000 18 Operation 3,300,000 4,615,385
19 19 Cease Op-Yr 1 3,000,000 4,038,462
20 20 Cease Op-Yr 2 3,000,000 4,038,462
21 21 Cease Op-Yr 3 3,000,000 4,038,462
22 22 Cease Op-Yr 4 3,000,000 4,038,462
23 23 Abndnmnt-Yr 5 3,000,000 4,038,462
24 24
25 25
</TABLE>
Reimbursement Amount**:
- -----------------------
Example #1
----------
Amortized Reimbursement Amount =
Phase One: $1,440,000+(($1,440,000 X 9%) X 18 Yrs) = $3,772,800
+ Phase Two/Three:$3,300,000+(($3,300,000 X 9%) X 9 Yrs) = $5,973,000
----------
TOTAL = $9,745,800
Example #2
----------
Amortized Reimbursement Amount=
Phase One/Two/Three:$3,000,000+($3,000,000 X 9%)X 23 Yrs = $9,210,000
+ Phase Four/Five:$4,038,462+(($4,038,462 X 9%) X 11 Yrs) = $8,036,538
----------
TOTAL = $17,246,538
Notes:
* Assumes full building or footprint size. Grant will be reduced in accordance
with Section 2.2(c) of Funding Agreement #1 if building or footprint size,
as the case may be, is reduced.
** Assumes repayment to EDC in one payment; no interest for multi-year repayment
included.
FUNDING AGREEMENT #2
between
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION
and
THE NEW YORK TIMES COMPANY
Dated as of December 15, 1993
Relative to the construction of
a City sanitary sewer system along the
Whitestone Expressway Service Road
in the College Point Industrial Park
in the Borough of Queens
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
DEFINITIONS 3
ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT
- ----------- AND CONTRACT REQUIREMENTS
Sec.1.1 General Provisions and Provisions Regarding
Design and Construction 16
Sec.1.2 Procurement of Bids, Services and Goods 24
Sec.1.3 Liaison to EDC 35
ARTICLE TWO THE FUNDING
- -----------
Sec.2.1 Agreement to Fund 36
Sec.2.2 Disbursements 36
Sec.2.3 Funding of Costs of Changes 39
ARTICLE THREE THE TERM
- -------------
Sec.3.1 Term 44
ARTICLE FOUR CONDITIONS FOR DISBURSEMENT
- ------------
Sec.4.1 Initial Submissions by The Times 45
Sec.4.2 Documentation for Disbursements on Account
of Eligible Costs 46
Sec.4.3 Direction of Submissions 49
ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND
- ------------ GUARANTIES OF THE TIMES
Sec.5.1 Organization; Standing 50
Sec.5.2 Intentionally Omitted 50
-i-
<PAGE>
Page
Sec.5.3 Conflict, etc. under Other Documents 50
Sec.5.4 No Litigation 51
Sec.5.5 Intentionally Omitted 51
Sec.5.6 Intentionally Omitted 51
Sec.5.7 Quality of Work; Guaranties and Warranties 51
ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC
- --------------
Sec.5A.1 Organization; Standing 57
Sec.5A.2 Due Authorization; Enforceable Obligations 57
ARTICLE SIX COVENANTS
- -----------
Sec.6.1 Requisitions Update The Time's Representations 58
Sec.6.2 Compliance with Other Agreements and Law;
Legal Status 58
Sec.6.3 Maintenance of and Compliance with Insurance
Requirements 58
Sec.6.4 Maintenance of Office 59
Sec.6.5 Compliance with Applicable Law 59
Sec.6.6 Assignment 60
Sec.6.7 Maintenance of Records 61
Sec.6.8 Intentionally Omitted 61
Sec.6.9 Due Application of Funding Proceeds 61
Sec.6.10 Defects; Non-Conforming Work 62
Sec.6.11 Participation by Women and Minority Owned
Businesses 62
Sec.6.12 No Liens 65
Sec.6.13 Intentionally Omitted 65
Sec.6.14 Intentionally Omitted 65
Sec.6.15 Intentionally Omitted 65
Sec.6.16 MacBride Principles 65
Sec.6.17 No Waiver of Compliance 66
-ii-
<PAGE>
Page
ARTICLE SEVEN DEFAULT AND TERMINATION
- -------------
Sec.7.1 Events of Default 67
Sec.7.2 Default Remedies; Exculpation 68
Sec.7.3 Termination 71
Sec.7.4 Right to Reinstate Agreement 73
ARTICLE EIGHT NOTICES
- -------------
Sec.8.1 Notice 74
Sec.8.2 Disbursement Submissions 75
ARTICLE NINE GENERAL CONDITIONS AND COVENANTS
- ------------
Sec.9.1 Conflict of Interests 76
Sec.9.2 No Liability of Individuals 77
Sec.9.3 Anti-Boycott Provisions 77
Sec.9.4 Governing Law 78
Sec.9.5 Liability of EDC 78
Sec.9.6 Amendments 80
Sec.9.7 Successors and Assigns 80
Sec.9.8 Assignment of Funds 80
Sec.9.9 Counterparts 81
Sec.9.10 Interpretation 81
Sec.9.11 Indemnity 81
Sec.9.12 No Agency 83
Sec.9.13 Venue 83
Sec.9.14 Investigations; Cooperation 85
Sec.9.15 Intentionally Omitted 92
Sec.9.16 Maximum Interest Rate 92
Sec.9.17 Captions 92
Sec.9.18 Gender, Etc. 92
Sec.9.19 Assignment by EDC 93
Sec.9.20 Obligations of Newspaper Division 93
-iii-
<PAGE>
Page
ARTICLE TEN AGREEMENT OF THE CITY
- -----------
Sec.10.1 City's Agreement to Fund EDC 94
Sec.10.2 Valid Agreement of the City 94
Sec.10.3 The Times's Rights Against the City 94
Appendix A - Premises
Appendix B - Sanitary Sewer System
Appendix C - Insurance Requirements
Appendix D - The Times's Certificate of Good Standing
Appendix E - EDC's Legal Opinion
Appendix F - EDC's Secretary's Certificate
Appendix G - Equal Employment Requirements
Appendix H - Employment Report
Appendix I - Intentionally Omitted
Appendix J - MacBride Principles Rider
Appendix K - Corporation Counsel's Legal Opinion
Exhibit A - Intentionally Omitted
Exhibit B - Form List of Contractors
Exhibit C - Investigation Forms
Exhibit D - Change Order Form
Exhibit E - Form Legal Opinion
Exhibit F - Form Certificate of Specimen Signature
Exhibit G - AIA Forms
Exhibit H - W\MBE Plan
Exhibit H-1 - Form Expedited Certification Affidavit
Exhibit I - Form Certification to be Attached to Requisition
-iv-
<PAGE>
FUNDING AGREEMENT #2 dated as of December 15, 1993 between NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation
formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the
State of New York, having its principal office at 110 William Street, New
York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York
State corporation, having its principal office at 229 West 43rd Street, New
York, New York 10036.
PREAMBLE:
WITNESSETH
----------
WHEREAS:
A: The City of New York (the "City"), a municipal corporation of the
State of New York, is the owner in fee of certain real property identified, as
of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block
4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot
1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44,
Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot
32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76,
Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th
Street and 139th Street, on the Tax Map for the Borough of Queens, in the
County of Queens, City and State of New York, and assigned new tentative tax
block and lot numbers Block 4282, Lot 100 for future identification, as such
property is more particularly described in Appendix A attached hereto and made
a part hereof (the "Premises); and
-1-
<PAGE>
B: The City, as landlord, and EDC, as tenant, entered into a lease
dated as of the date hereof, which lease was assigned by EDC to The Times
pursuant to an Assignment and Assumption of Lease with Consent dated as of
the date hereof (the lease as so assigned, and as the same may hereafter be
amended, is hereinafter referred to as the "Lease"), demising the Premises for
the Project (as hereinafter defined), and for which Lease EDC will act as the
City's managing agent pursuant to Article 42 of the Lease; and
C: In connection with the Lease, The Times has the option to
construct on behalf of the City a City sanitary sewer system designed by EDC,
to run along the westerly side of the Whitestone Expressway Service Road
adjacent to the Premises (the "Construction Site"), as such sanitary sewer
system is more particularly depicted in Appendix B attached hereto (the
"Sanitary Sewer System" or the "Improvements"); and
D: The construction of the Improvements is a necessary prerequisite
element to the Project without which The Times has determined it could not
proceed with the construction of the Project; and
E: If The Times elects to construct the Improvements in accordance
with its option, EDC and the City will make available to The Times City
capital budget funds sufficient to fully reimburse The Times for its
construction of the Improvements and the performance of the Work (as
hereinafter defined); and
F: The City and EDC have entered into an Amended and Restated
Contract dated as of June 30, 1993, as amended (the "Consolidated Contract")
pursuant to which the City will provide EDC with the necessary City capital
budget funds, which is currently
-2-
<PAGE>
estimated by EDC to be approximately $3.6 million, for use in connection with
the construction of the Improvements and pursuant to which EDC is authorized
to contract with The Times to perform the Work; and
G: The Times, independently, and not as agent of the City or EDC, has
agreed that if it exercises its option to construct the Improvements it will
perform, or cause the performance of, the Work in consideration of the
payments to it by EDC of funds in an amount necessary to fully reimburse The
Times for the Eligible Costs (as hereinafter defined) incurred in connection
with the construction of the Improvements (the "Funding") pursuant to this
Agreement;
H: In furtherance of its obligations under the Consolidated Contract
and its corporate purpose of fostering economic development in the City, EDC
has agreed to disburse the Funding to The Times for the purpose of financing
the Eligible Costs of the Work.
NOW, THEREFORE, EDC and The Times covenant and agree as follows:
DEFINITIONS
-----------
As used in this Funding Agreement, the following initially capitalized
terms shall have the respective meanings indicated opposite each of them:
"Affiliate" Any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or
is under common control with, The Times. For purposes
hereof, the
-3-
<PAGE>
term "control" means the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of The Times
through the ownership of voting securities, by
contract, or otherwise. Ownership of or by The Times
includes beneficial ownership effected by ownership of
intermediate entities. An "Affiliate" of a Person
other than The Times shall be determined using the
same standard of control and ownership set forth
herein with respect to The Times. Unless the context
otherwise requires, any reference to an "Affiliate" in
this Agreement shall be deemed to refer to an
Affiliate of The Times.
"Agreement" This Funding Agreement and any amendments thereto.
"Approvals" Contractor's Approvals (as hereinafter defined) and
Owner's Approvals (as hereinafter defined),
collectively.
"Business Day" Any day other than a Saturday, Sunday, legal holiday,
or a day on which banking institutions in New York
City are authorized by law or executive order to
close.
"City" As defined in Recital A of the Preamble.
"College Point
Improvement Fund
Payments" As defined in Section 3.09(b)(iii) of the Lease.
"Commissioner" As defined in Sec.9.14(a).
"Completed Cover
Sheet" As defined in Sec.4.1.
"Consolidated
Contract" As defined in Recital F of the Preamble.
"Construction
Contract" (A) Any agreement executed by The Times and the
Resident Engineer (as hereinafter defined), if any,
with respect to construction management and
supervision services and engineering services; or (B)
any contract between The Times and the General
Contractor (as hereinafter defined), if any,
-4-
<PAGE>
under which the General Contractor is obligated to
perform the Construction Work; or (C) any contract
with a contractor for performance of all or any part
of the Construction Work, whether entered into by The
Times, the General Contractor, the Resident Engineer,
or the Construction Manager (as hereinafter defined).
"Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction
manager selected by The Times, reasonably approved by
EDC, responsible solely for the performance of
construction management services and/or construction
contract administration services and supervision
services relative to the Construction Work.
"Construction Site" As defined in Recital C of the Preamble.
"Construction
Work" The portion of the Work the costs of which are
considered hard costs of construction under normal
industry standards, excluding the services of the
Resident Engineer and the services of the Construction
Manager, if any.
"Contractor" Any contractor under a Construction Contract.
"Contractor's
Approvals" As defined in Sec.1.1(c)(3).
"DBS" As defined in Sec.6.11(b).
"Department of
Investigation" As defined in Sec.9.14(a).
"Deputy Mayor" As defined in Sec.9.14(a).
"DLS" The Division of Labor Services of the City's
Department of Business Services, or its successor in
function.
"EDC" As defined in the first paragraph of this Agreement.
"EDC Default Notice" As defined in Sec.9.5(b).
-5-
<PAGE>
"Eligible
Costs" (i) The costs of the Work paid or payable by The Times
to Contractors (other than the Resident Engineer),
subcontractors, suppliers and material persons for (A)
labor and materials utilized in connection with the
Work, and (B) for labor, services, facilities or
equipment customarily considered as "general
conditions" items which are reasonably required by or
consequent upon the Construction Work, including (x)
all costs of contract bonds and of insurance that may
be required or necessary during the period of and for
performance of the Work, (y) all costs of obtaining
and maintaining the guaranties required by this
Agreement and/or the Final Plans and Specifications
(as hereinafter defined), and (z) all costs of
obtaining and maintaining the security services
required by Sec.1.1(e)(ii) of this Agreement that are
obtained by Contractors and subcontractors (other than
the Resident Engineer) and are included in their
respective contract prices together with those costs
described in (i)(A) above, and (ii) the costs paid or
payable by The Times to the Resident Engineer,
including those costs incurred by the Resident
Engineer for the performance of construction
management and supervision services and/or engineering
services, including without limitation, the
performance of tests necessary to determine the
efficiency of the Sanitary Sewer System, (x) in an
amount not to exceed ten percent (10%) of the Hard
Costs (as hereinafter defined) with respect to all
"general condition" items and other reimbursable
expenses, and (y) in an amount not to exceed three
percent (3%) of the Hard Costs with respect to the
Resident Engineer's fee. In no event shall Eligible
Costs include the costs or fees paid or payable by The
Times to the Construction Manager.
"Engineer's Estimate" An engineer's estimate or estimates, prepared by EDC
or its professional consultants with respect to the
construction of the Improvements, of all Eligible
Costs expected to be incurred in connection with such
construction and a projection of the amounts that EDC
expects The Times to requisition over the term of this
Agreement in connection with the Improvements. The
Engineer's Estimate may be amended from time to time
to reflect inflation change order work or other
changes to the Plans and Specifications, until such
Plans and Specifications become the Final Plans and
Specifications. The Engineer's Estimate shall not be
construed to limit in any way the amounts to be paid
to The Times in full reimbursement of the cost to
-6-
<PAGE>
perform the Work pursuant to the provisions of this
Agreement.
"Entity" As defined in Sec.9.14(a).
"Events of
Default" Those events set forth in Sec.7.1.
"Federal Courts" As defined in Sec.9.13.
"Final Acceptance Date" Means the date on which all of the following shall
have occurred: (i) the Resident Engineer or the
Construction Manager shall have certified to EDC that
the Work (including all Substantial Completion Punch
List (as hereinafter defined) items) is complete
(except to an immaterial extent) in accordance with
the Final Plans and Specifications, and the
Requirements, and (ii) EDC and/or its professional
consultants shall have inspected the Construction
Site, within thirty (30) days after EDC's receipt from
the Resident Engineer or the Construction Manager of
the certification described in clause (i) above, and
certified, by the later to occur of the expiration of
such thirty (30) day period or five (5) days after
such inspection was completed, to The Times that, in
its opinion, the Improvements are complete (except to
an immaterial extent) in accordance with the Final
Plans and Specifications, which certification shall
not be unreasonably withheld; provided, however, that
if EDC and/or its professional consultants shall have
failed to inspect the Construction Site within the
thirty (30) day period described above and to give the
certification within the time period described above,
EDC shall be deemed to have inspected the Construction
Site and certified to The Times that the Improvements
are complete.
"Final
Completion" Means that each of the following shall have occurred:
(A) the Resident Engineer or the Construction
Manager shall have issued to EDC a "Certificate
of Payment", or certified its approval of a
"Certificate of Payment" issued to EDC, in
either case stating that it has examined the
Final Plans and Specifications and, in its best
professional judgment, after diligent inquiry,
and on the basis of its observations and
inspections, the Construction Work has been
completed (except to an
-7-
<PAGE>
immaterial extent) in accordance with the Final
Plans and Specifications and all Requirements
and that the final payment is due to The Times;
(B) the Reviewing Parties (i) shall have made a
final inspection of the Construction Site upon
receipt of notice from The Times that the Work
is Substantially Completed (as hereinafter
defined) and (ii) shall have certified the Work,
including all items on the Final Punch List, as
being acceptable and complete;
(C) The Times shall have submitted to EDC a final
accounting, containing an affidavit that all
payrolls, bills for materials and equipment, and
other indebtedness connected with the Work for
which The Times may in any way be responsible
(other than items, if any, disputed in good
faith by The Times that are not being paid for
by the Funding including, without limitation,
the Construction Manager's costs and fees),
either have been paid or otherwise satisfied or
will be paid simultaneously with or immediately
after the receipt of the proceeds of any
disbursement of the Funding for which Final
Completion is required;
(D) The Times shall have submitted to EDC receipts,
releases and waivers of liens, or such other
documentation establishing payment or
satisfaction of all obligations arising out of
the Work (other than items, if any, disputed in
good faith by The Times that are not being paid
for by the Funding including, without
limitation, the Construction Manager's costs and
fees), to the extent and in such form as may be
reasonably designated by EDC. If any lien for
any work done by or on behalf of The Times has
attached to the funds forming a part of the
Funding, The Times shall have either removed or
bonded such lien;
(E) The Times shall have delivered to EDC two sets
of the "as-built" drawings for the Improvements,
as the same may have been amended, modified or
supplemented, and such other documentation as
may be required by the Reviewing Parties
(including without limitation, videotape
documentation required by the City's
-8-
<PAGE>
Department of Environmental Protection, Division
of Sewers in connection with the construction of
a sanitary sewer system) or as may be necessary
to evidence that the Work was completed in
accordance with the Requirements. These
drawings shall accurately show any deviations
from the Final Plans and Specifications and the
exact locations of any underground or otherwise
concealed utilities and appurtenances as
referenced to permanent surface improvements;
and
(F) receipt by EDC of notification from DLS that all
labor requirements applicable to the Work have
been fulfilled.
"Final Penalty" As defined in Sec.9.14(f)(ii).
"Final Plans and
Specifications" The completed final drawings and plans and
specifications for the construction of the Sanitary
Sewer System, as developed by EDC and delivered by EDC
to The Times in accordance with Sec.1.1(c)(2) hereof,
and as such drawings and plans and specifications may
be modified or amended from time to time in accordance
with Sec.1.1(c) or Sec.2.3 of this Agreement.
"Final Punch
List" A statement by the Resident Engineer or the
Construction Manager issued after Substantial
Completion, setting forth a description in
reasonable detail of any items to be remedied,
corrected or completed in accordance with the
Final Plans and Specifications or any observable
defects and deficiencies, and any other defects
or deficiencies of which the Resident Engineer
or the Construction Manager have knowledge or of
which the Reviewing Parties shall have observed
and notified The Times or its Contractors, with
respect to the Improvements or at or on the
Construction Site including, but not limited to,
deficiencies due to non-compliance with
Requirements.
"Funding" As defined in Recital G of the Preamble.
"Funding Agreement #1" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for certain site preparation and foundation
work required in connection with the construction of
the Project, as such agreement may be
-9-
<PAGE>
amended from time to time.
"Funding Agreement #3" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of funds necessary to pay for the
construction of an interim New York City Police
Department evidence vehicle facility, as such
agreement may be amended from time to time.
"Funding Agreement #4" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for certain reconstruction of the Whitestone
Expressway Service Road from 20th Avenue to Linden
Place, a City street running adjacent to the Premises,
as such agreement may be amended from time to time.
"General
Contractor" The Times's general contractor, if any,
reasonably approved by EDC, engaged to perform
and manage the Construction Work.
"Governmental
Authorities" The United States of America, the State of New
York, the City and any agency, department,
legislative body, commission, board, bureau,
instrumentality or political subdivision of any
of the foregoing, now existing or hereafter
created, having legal jurisdiction over the
Improvements or the Construction Site or any
portion thereof or any street, road, avenue,
sidewalk or water comprising a part of or
immediately adjacent to the Construction Site.
"Guaranty
Periods" (i) A period of twelve (12) months after the Final
Acceptance Date, and (ii) such other longer guaranty
period as may be generally available within the
relevant industry with respect to materials or
equipment used in connection with the construction of,
or incorporated in, the Sanitary Sewer System, and
specified in the Final Plans and Specifications
(provided such guaranty period is commercially
available).
"Hard Costs" The aggregate of the costs set forth in clauses
(i)(A) and (i)(B) of the definition of Eligible
Costs.
"Impositions" As defined in Section 3.09(b)(i) of the Lease.
-10-
<PAGE>
"Improvements" As defined in Recital C of the Preamble.
"Initial Termination" As defined in Sec.7.4.
"Interim Penalty" As defined in Sec.9.14(f)(i).
"Investigation" As defined in Sec.9.14(a).
"Investigation Forms" As defined in Sec.1.2(c).
"Late Charge
Rate" The Prime Rate (as hereinafter defined) plus one
percent (1%).
"Lease" As defined in Recital B of the Preamble.
"Material Change" A change to the Final Plans and Specifications which
either (i) individually or in the aggregate with all
other changes increases the cost of the Construction
Work by $100,000 or more, (ii) materially changes the
quality or nature of the Construction Work, type of
materials, workmanship or construction means, methods
or techniques, or materially affects the layout or
design of the Improvements, or (iii) is of such a
nature that, in order to perform the work associated
with such change, The Times will be required to obtain
additional permits or approval.
"Members" As defined in Sec.9.14(a).
"MBEs" As defined in Sec.6.11(a).
"New York State
Courts" As defined in Sec.9.13.
"Newspaper Division" As defined in Sec.9.20.
"90 Day
Election Period" As defined in Sec.1.1(b).
"Owner's Approvals" As defined in Sec.1.1(c)(2).
"Owner's
Representative" Any person selected by The Times, reasonably
approved by EDC, to act as The Times's
representative at the Construction Site and
responsible for the supervision of the Work
performed by the General Contractor and the
other Contractors, subcontractors and material
suppliers.
-11-
<PAGE>
"Parties" EDC and The Times.
"Person" An individual, corporation, partnership, joint
venture, estate, trust, unincorporated association;
any federal, state, county or municipal government or
any bureau, department or agency thereof; and any
fiduciary acting in such capacity on behalf of any of
the foregoing.
"Plans and
Specifications" The drawings and plans and specifications for
the construction of the Sanitary Sewer System,
as developed by EDC. The Plans and
Specifications shall be complete and final
except with respect to those changes which may
be necessary or required as a result of changes
to the design or changes in the Requirements
which occur between the time the Plans and
Specifications are delivered to The Times in
accordance with Sec.1.1(c)(1) hereof and the time
that The Times is prepared to commence
construction of the Sanitary Sewer System.
"Premises" As defined in Recital A of the Preamble.
"Prime Rate" The base or prime rate of interest from time to
time charged by Chemical Bank, as such rate is
published by The New York Times newspaper or by
------------------
The Wall Street Journal if such rate is not
------------------------
published by The New York Times at the time in
------------------
question.
"Project" The construction on the Premises of a facility of no
less than approximately 360,000 square feet for the
printing, production and distribution of newspapers
and, at the sole discretion of The Times, other such
buildings and improvements on the Premises as are
permitted pursuant to the terms and provisions of the
Lease, including without limiting the generality of
the foregoing, the expansion of the printing facility
to a size greater than 360,000 square feet.
"Project Commencement
Date" As defined in Sec.1.1(b).
"Prohibited Person" As defined in Sec.1.2(b)(5).
"Proposed Bidders List" As defined in Sec.1.2(b)(1).
"Public Parties" As defined in Sec.9.11(a).
"Rental" As defined in Article 1 of the Lease.
-12-
<PAGE>
"Requirements" Any and all laws, rules, regulations, orders,
ordinances, statutes, codes, executive orders,
resolutions and requirements of all Governmental
Authorities currently in force or hereafter adopted
applicable to the Construction Site and/or the Work.
"Requisition" As defined in Sec.4.2(a)(ii).
"Resident Engineer" The professional consultant engaged by EDC to prepare
the Plans and Specifications and/or the Final Plans
and Specifications (identified by EDC in its notice to
The Times described in Sec.1.2(b)(4) hereof), or any
other professional engineer, engineering firm,
architectural firm with engineering expertise,
combined practice or association licensed in the State
of New York selected by The Times, reasonably approved
by EDC as to the acceptability of such Resident
Engineer and as to the scope of work proposed to be
performed by such Resident Engineer, to act as
resident engineer on behalf of The Times and to
perform engineering services and/or construction
contract administration and supervision services
relative to the Work. The Resident Engineer, if any,
shall act on behalf of The Times and shall be separate
and apart from any engineer acting on behalf of EDC or
the City for any reasons, including, without,
limitation, the preparation of the Engineer's
Estimate.
"Resident Engineer
Costs" The costs paid or payable by The Times to the
Resident Engineer for the performance of
construction management and supervision services
and engineering services relative to the Work,
as set forth in clause (ii) of the definition of
Eligible Costs.
"Retainage" As defined in Sec.2.2(a)(1).
"Reviewing
Parties" EDC, the City's Department of Environmental
Protection, or their respective designees, including
without limitation, their hired consultants, and any
other Governmental Authority with jurisdiction over
the Work, the Improvements or the Construction Site
and responsible for (i) the issuing of permits or
approvals with respect to the Improvements, or (ii)
ensuring compliance with the Requirements.
"Sanitary Sewer System" As defined in Recital C of the Preamble.
-13-
<PAGE>
"Sewer Delay Offset
Amount" As defined in Section 27.04 of the Lease.
"Sewer System Election
Notice" As defined in Sec.1.1(b).
"Substantial
Completion" or
"Substantially
Complete(d)" Means that the Work shall have been 95% completed in
accordance with the Final Plans and Specifications and
all Requirements, and the Reviewing Parties are able
to inspect the Work and prepare a Final Punch List.
"Substantial
Completion Date" The date on which the Work shall have been
Substantially Completed.
"Substantial Completion
Punch List" The statement by EDC, issued after inspection of
the Construction Site, setting forth a
description in reasonable detail of any items to
be remedied, corrected or completed in
accordance with the Final Plans and
Specifications or any defects or deficiencies
which EDC shall have noted with respect to the
Improvements, including but not limited to,
defects or deficiencies due to non-compliance
with the Requirements.
"Term" As defined in Sec.3.1.
"The Times" As defined in the first paragraph of this Agreement.
"The Times Indemnitees" As defined in Sec.1.1(c)(5).
"Transaction Documents" As defined in Sec.9.14(a).
"Unavoidable
Delays" Delays caused by (i) strikes, slowdowns, walkouts,
lockouts or other labor troubles, (ii) acts of God,
(iii) catastrophic weather conditions, (iv) inability
to obtain labor or materials due to labor disputes,
(v) court orders enjoining commencement or
continuation of the Work, (vi) enemy action, (vii)
civil commotion, (viii) shortage of fuel, supplies or
labor resulting from governmental declared priorities
in connection with a public emergency, (ix) failure or
defect in the supply of
-14-
<PAGE>
electricity, oil, gas or water to the Construction
Site provided that such failure or defect is not due
to the action or inaction of The Times or its
Contractors or subcontractors, (x) fire, (xi)
casualty, (xii) the failure of EDC to disburse the
Funding or any portion thereof in accordance with the
provisions of this Agreement, (xiii) the failure of
EDC to obtain the Owner's Approvals, (xiv) the failure
of EDC to make changes to the Final Plans and
Specifications in accordance with Sec.1.1(c)(4) hereof
required by reason of the Requirements, changes to the
Requirements, field conditions or other unexpected
conditions arising during the course of the
Construction Work that may affect the design of the
Improvements, (xv) defects in the Final Plans and
Specifications that cause the Plans and Specifications
to be not in compliance with the Requirements or
incorrect or inappropriate, (xvi) EDC's unreasonable
delay in granting any approvals required under this
Agreement, or (xvii) other causes not within The
Times's control that is causing a delay in The Times's
performance of its construction obligations hereunder.
The Times shall use its good faith efforts to notify
EDC in writing, stating when such delay commenced, not
later than ten (10) Business Days after The Times has
first received knowledge of the occurrence of any of
the foregoing conditions; provided, however, that The
Times's failure to notify EDC of the occurrence of an
event constituting an Unavoidable Delay shall not
affect the commencement of such delay or otherwise
result in the loss of any benefit or right granted to
The Times under this Agreement.
"WBEs" As defined in Sec.6.11(a).
"W/MBEs" As defined in Sec.6.11(a).
"W/MBE Participation
Dollar Value" As defined in Sec.6.11(c).
"W/MBE Percentage" As defined in Sec.6.11(c).
"W/MBE Plan" As defined in Sec.6.11(a)-14.
"Work" Work undertaken by or on behalf of The Times for the
purpose of constructing the Improvements all in
accordance with this Agreement and the Final Plans and
Specifications.
-15-
<PAGE>
ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND
----------------------------------------------------
CONTRACT REQUIREMENTS
----------------------
Sec.1.1 General Provisions and Provisions Regarding Design and
---------------------------------------------------------------
Construction.
- -------------
(a) The Times's Option to Perform the Work. Pursuant to Article 27 of
---------------------------------------
the Lease, The Times shall, in its sole discretion, have the right (but not
the obligation), subject to such conditions set forth in paragraph (b) below,
to elect to construct, on behalf of the City, the Sanitary Sewer System. If
The Times elects to construct the Sanitary Sewer System, The Times shall
notify EDC of such election in accordance with the notice provisions set forth
in Sec.1.1(b) hereof, and thereafter The Times shall perform the Work related
to such construction, and EDC shall disburse to The Times the Funding or any
portion thereof allocable to the Work being performed by The Times, on the
terms and conditions contained in this Agreement.
(b) Notice of Election to Proceed. If The Times elects to exercise its
------------------------------
right to construct the Sanitary Sewer System on behalf of the City in
accordance with Sec.1.1(a) hereof, The Times shall make such election by giving
written notice thereof (the "Sewer System Election Notice") to EDC no earlier
than the date (the "Project Commencement Date") on which The Times "Commences
Construction of the Project" (as such term is defined in Article 13 of the
Lease) on the Premises, but in no event later than ninety (90) days after the
Project Commencement Date (the "90 Day Election Period"); provided, however,
that The Times shall have the right to revoke such election if The Times
notifies EDC of its
-16-
<PAGE>
intention to construct the Sanitary Sewer System at any time within the 90 Day
Election Period, but has not commenced the Work prior to the date which is one
hundred and eighty (180) days after the Project Commencement Date. If The
Times elects to revoke its election in accordance with the foregoing sentence,
The Times shall effect such revocation by giving EDC written notice of such
election and upon EDC's receipt of such notification of election to revoke,
this Agreement shall terminate and thereafter neither Party shall have any
rights against or obligations to the other Party by reason of this Agreement
except as otherwise specifically set forth in this Agreement. The Sewer
System Election Notice shall specify (i) the approximate date on which The
Times intends to commence construction of the Sanitary Sewer System (which
date shall be no later than nine (9) months after the Project Commencement
Date), (ii) the Resident Engineer, Construction Manager, or Owner's
Representative that The Times intends to select with respect to the
construction of the Sanitary Sewer System, and (iii) the Person or Persons on
The Times's staff selected by The Times to be responsible for communicating
with EDC regarding the performance and completion of the Work in connection
with the construction of the Sanitary Sewer System.
(c) Plans and Specifications. (1) EDC shall deliver to The Times
-------------------------
copies of the Plans and Specifications for the construction of the Sanitary
Sewer System as soon as such plans have been completed, but in no event later
than the date which is six (6) months after the date of this Agreement. The
Plans and Specifications shall be submitted together with an Engineer's
Estimate, as of the date of such submission.
-17-
<PAGE>
(2) EDC shall deliver to The Times copies of the Final Plans and
Specifications for the construction of the Sanitary Sewer System within six
(6) months after EDC's receipt of the Sewer System Election Notice, but in no
event earlier than three (3) months prior to the date specified in such notice
on which The Times intends to commence construction. The Final Plans and
Specifications shall be accompanied by (i) an updated Engineer's Estimate, if
necessary, and (ii) all appropriate permits, consents, certificates, licenses,
authorizations and approvals necessary for the construction of the
Improvements generally considered in the construction industry to be the
responsibility of the owner of a construction site to obtain ("Owner's
Approvals"). If necessary, The Times shall assist EDC, at no cost to The
Times, in obtaining such Owner's Approvals.
(3) The Times shall obtain, or shall cause its Contractors to
obtain, all appropriate permits, consents, certificates, licenses,
authorizations and approvals necessary for the construction of the
Improvements generally considered in the construction industry to be the
responsibility of the "contractor" of a construction project to obtain (the
"Contractor's Approvals"). If necessary, EDC shall assist The Times or its
Contractors in obtaining such Contractor's Approvals. The cost of obtaining
such permits, consents, certificates, licenses, authorizations and approvals
shall be considered Eligible Costs payable with the Funding if such costs are
included in The Times's Contractors' contract price.
(4) Any changes required to be made to the Final Plans and
Specifications shall be made in accordance with the terms and conditions set
forth in Sec.2.3 hereof; provided, however, that any changes required to be
made by reason of the Requirements,
-18-
<PAGE>
changes to the Requirements, field conditions or other unexpected conditions
arising during the course of the Construction Work that may affect the design
or construction of the Improvements shall be made solely by EDC and/or its
professional consultants, at EDC's cost and expense. The Times shall perform
the Construction Work in accordance with all such changes. In addition, EDC
may request that The Times construct the Improvements in conformity with any
other changes to the Final Plans and Specifications reasonably proposed by EDC
or the City which shall not cause "Substantial Completion" (as such term is
defined in the Lease) of the Project to be delayed by virtue of the inability
to hook up the Project to the Sanitary Sewer System. In either such case,
any increased cost of the Work associated with any such changes to the Final
Plans and Specifications in accordance with this Sec.1.1(c)(4) shall be paid as
provided in Sec.2.3(d) hereof.
(5) EDC shall indemnify and hold harmless The Times and its
officers, members, directors, employees and agents (collectively "The Times
Indemnitees") from and against any and all claims, damages, judgments,
liabilities and causes of action whatsoever to which they may be subject
arising out of (i) the negligence or misconduct of EDC, its employees, agents
or consultants in connection with the preparation of the Final Plans and
Specifications and any modification or changes thereto and the obtaining of
the Owner's Approvals, or (ii) the fact that the Final Plans and
Specifications are not in compliance with the Requirements or are incorrect or
inappropriate. The obligation of EDC to indemnify and hold harmless The Times
Indemnitees shall include but not be limited to the payment of any and all
costs and reasonable fees (including reasonable legal fees) as may be actually
-19-
<PAGE>
incurred by The Times Indemnitees as a direct result of the negligence or
misconduct of EDC, its employees, agents or consultants.
(6) If, as a result of (i) the negligence or misconduct of EDC,
its employees, agents or consultants in connection with the preparation of the
Final Plans and Specifications and any modifications or changes thereto, or
(ii) the fact that the Final Plans and Specifications are not in compliance
with the Requirements or are incorrect or inappropriate, The Times is delayed
in completing construction of the Sanitary Sewer System in accordance with
this Agreement and such delay in completing the Sanitary Sewer System causes
"Substantial Completion" (as such term is defined in the Lease) of the Project
to be delayed by virtue of the inability to hook up the Project to the
Sanitary Sewer System, The Times shall have the right to offset against future
Rental (other than Impositions and College Point Improvement Fund Payments) an
amount equal to the Sewer Delay Offset Amount, as more particularly set forth
in Section 4.01 and Article 27 of the Lease.
(d) Right to Proceed. The Times may only proceed with the
-------------------
Construction Work if and only if (i) all Approvals necessary for the
construction of the Improvements have been obtained, (ii) certificates, in
form and substance reasonably satisfactory to EDC, evidencing the insurance
policies referred to in Appendix C, naming the City and EDC as additional
insureds, providing not less than thirty (30) days notice of cancellation to
the City and EDC and, if the certificates of insurance described above do not
indicate thereon the receipt of due and payable premiums, proof of payment of
such premiums, shall have been obtained and delivered to EDC, and (iii) all
other Requirements have been complied with, it being
-20-
<PAGE>
expressly agreed that The Times shall bear the entire risk of constructing the
Improvements in variance with the Final Plans and Specifications and that EDC
will not be obligated to disburse any of the Funding before all Approvals have
been obtained and all conditions to disbursement under this Agreement have
been satisfied. The fact that EDC has provided The Times with the Final Plans
and Specifications and the Owner's Approvals, or any other action or failure
to act by the Reviewing Parties, shall in no way constitute a representation
that all applicable Requirements have been complied with or, subject to the
provisions of Sec.1.1(c)(5) hereof, relieve The Times of its obligations to
abide by the terms of this Agreement.
(e) Performance of the Work. (i) Subject to Unavoidable Delays, The
-------------------------
Times shall commence construction of the Improvements not later than nine (9)
months after the Project Commencement Date. The Times covenants and agrees to
cause the Improvements to be constructed in accordance with the requirements
of this Agreement and with the Final Plans and Specifications and all
applicable Requirements. The Times shall obtain all final acceptances from
the appropriate Reviewing Parties as necessary to complete the Improvements.
(ii) At all times during the performance of the Construction
Work, The Times shall maintain, or cause to be maintained, the Construction
Site in a neat and orderly condition and shall protect the Construction Site
against deterioration, loss, damage or theft.
(f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof,
-----------------
The Times shall permit EDC and the Reviewing Parties, their agents, employees
and/or professional
-21-
<PAGE>
consultants to make inspections of the Construction Site during normal
business hours or otherwise when Construction Work is in progress, at
reasonable times and upon reasonable notice to The Times and in accordance
with applicable safety standards, (i) with respect to EDC, as it deems
necessary to observe compliance with and performance under this Agreement, and
(ii) with respect to the Reviewing Parties, as are normally made by the City
and its agencies in the course of a project or projects of similar nature and
magnitude to the Work. Such inspection shall not require the uncovering of
any work unless specifically requested in writing by EDC or the Reviewing
Parties. If EDC requested the uncovering of the work and the work that has
been uncovered is determined to have been performed in accordance with the
Final Plans and Specifications and the Requirements, EDC shall pay the costs
associated with the uncovering requested by EDC and, if such uncovering caused
"Substantial Completion" (as such term is defined in the Lease) of the Project
to be delayed by virtue of the inability to hook up the Project to the
Sanitary Sewer System, The Times shall have the right to offset against future
Rental (other than Impositions and College Point Improvement Fund Payments) an
amount equal to the Sewer Delay Offset Amount, as more particularly set forth
in Section 4.01 and Article 27 of the Lease; if the work that has been
uncovered is determined to be unacceptable because it was not performed in
accordance with the Final Plans and Specifications or the Requirements, The
Times shall pay the costs associated with the uncovering. EDC shall use its
good faith efforts to cause such inspection to be made in a manner that will
not interfere with the progress of the Work. A representative of The Times
shall, if available, accompany the person or persons making
-22-
<PAGE>
such inspection on behalf of EDC or the Reviewing Parties, unless The Times
elects to forego such right. The Times shall cause a complete set of the
Final Plans and Specifications, as then in effect, and shop drawings to be
maintained at the Construction Site or at the Premises for inspection by EDC,
the Reviewing Parties and each of their respective employees, consultants and
agents. The omission or failure of EDC or the Reviewing Parties or any
representative thereof to make such inspections, to identify any defects or to
notify The Times of any observable defects or any non-compliance with the
terms of this Agreement or the Final Plans and Specifications, shall in no way
relieve The Times of its obligations under this Agreement or impose any
liability upon EDC, the Reviewing Parties, or any of their respective
employees, consultants and agents.
(g) Completion.
-----------
(1) Subject to Unavoidable Delays, The Times shall cause Substantial
Completion of the Sanitary Sewer System to occur not later than twenty-four
(24) months after The Times commences construction of such Sanitary Sewer
System.
(2) The Times shall notify EDC of the date the Work shall have been
Substantially Completed. EDC shall have thirty (30) Business Days after the
giving of the notice referred to in the preceding sentence to inspect the
Improvements and notify The Times in writing of its acceptance of The Times's
determination of Substantial Completion or to notify The Times in writing of
specific objections which it believes renders the Work not Substantially
Completed and prepare the Substantial Completion Punch List, if necessary, and
deliver the same to The Times within such thirty (30) Business Day period.
The Times shall
-23-
<PAGE>
Substantially Complete those items of the Work, if any, specified in EDC's
notice as not Substantially Complete or otherwise in the Substantial
Completion Punch List.
(3) After EDC's acceptance of The Times's determination of Substantial
Completion, The Times shall cause the Resident Engineer or the Construction
Manager to prepare a Final Punch List. Such Final Punch List shall be
prepared after inspection of the substantially completed Improvements by the
Reviewing Parties and shall incorporate those items determined by such
Reviewing Parties to be necessary for Final Completion of the Work.
(4) The Times shall use its good faith efforts to cause Final
Completion to occur as soon as reasonably possible after Substantial
Completion and, to the extent reasonably achievable, shall complete all items
on the Final Punch List within ninety (90) days after the Substantial
Completion Date.
Sec.1.2 Procurement of Bids, Services and Goods
---------------------------------------
(a)(1) If The Times elects to construct the Sanitary Sewer System as
provided in Sec.1.1(a) hereof, The Times shall enter into a Construction
Contract or Construction Contracts independently and not as agent of the City
or EDC for the performance of the Construction Work in accordance with the Final
Plans and Specifications so as to facilitate the construction of the
Improvements.
(2) Any Construction Contract entered into by The Times (and any bid
packages prepared by The Times for the bid of the Construction Work) shall
instruct the Contractors
-24-
<PAGE>
(or bidders, as appropriate) as follows: title to the Construction Site and
the Improvements shall be and vest in the City. Materials to be incorporated
into the Construction Site shall, effective upon their purchase and at all
times thereafter, constitute the property of the City and upon incorporation
of such materials into the Construction Site title thereto shall be and
continue in the City. In accordance therewith, purchases of tangible personal
property by the Contractors arising in connection with the construction of the
Improvements are exempt from the payment of certain sales and compensating use
taxes to the extent that such property (i) is used to alter, maintain or
improve, and becomes an integral component part of, the Construction Site, or
(ii) remains tangible personal property and is installed on the Construction
Site. This exemption does not apply to tools, machinery, equipment or other
property leased by The Times or its Contractors, or to supplies, materials or
other property which are consumed in the course of construction or for any
other reason not incorporated into the Construction Site.
(b)(1) Prior to letting any Construction Contract to be entered into
directly by The Times or by The Times's Construction Manager, if any, The
Times shall submit to EDC a list of proposed bidders and, to the extent known
to The Times, identify the principals of the bidders (the "Proposed Bidders
List"). EDC shall advise The Times in writing within fifteen (15) Business
Days after receipt of the Proposed Bidders List, as to which bidders on the
Proposed Bidders List are acceptable or unacceptable and, if any bidders are
unacceptable, the specific reasons therefor. EDC may also advise The Times,
within such fifteen (15) Business Day Period, of additional bidders that it
proposes that The Times
-25-
<PAGE>
include on the Proposed Bidders List. If EDC fails to provide such advice
within such fifteen (15) Business Day Period, all of the bidders on the
Proposed Bidders List shall be deemed approved. For purposes hereof, any
bidder other than a bidder that is a Prohibited Person or has received a
negative contractor evaluation from EDC or the City within the five (5) years
prior to the date of the Proposed Bidders List, shall be deemed acceptable to
EDC. The Times shall obtain proposals from at least six (6) qualified bidders
from the list of acceptable bidders and if EDC has proposed additional bidders
to be included on the Proposed Bidders List as provided above, at least three
(3) of such six (6) qualified bidders shall be bidders proposed by EDC (or if
EDC has proposed less than three (3) bidders, then the qualified bidders shall
include all the bidders proposed by EDC). The Times shall submit to EDC by
hand delivery, registered or certified mail, or national overnight courier
service, a bid summary, analysis and statement as to which bidder The Times
intends to select, which statement shall be certified by The Times and give
specific reasons for The Times's preference. The Times shall not accept a bid
which is not the lowest bid without EDC's prior written approval. EDC, in its
sole discretion, may (but is not obligated to) either accept a bid which is
not the lowest bid if necessary to enable The Times to achieve the total W/MBE
Participation Dollar Value and the total W/MBE Percentage or, in the
alternative, reduce the W/MBE Participation Dollar Value and the W/MBE
Percentage in an amount equal to the portion of the W/MBE Participation Dollar
Value and the W/MBE Percentage that would have been achieved by accepting such
bid. The Times shall not accept a bid which exceeds the Engineer's Estimate
by more than ten percent (10%) without
-26-
<PAGE>
EDC's prior written approval (it being understood, however, that if EDC
approves any such bid, all Eligible Costs included in such bidder's contract
price shall be paid for with the Funding notwithstanding the fact that such
Eligible Costs may exceed the Engineer's Estimate by ten percent (10%) or
more). EDC's approval of a bid which is not the lowest bid or a bid which
exceeds the Engineer's Estimate by more than ten percent (10%) shall be deemed
given if not denied in writing within ten (10) Business Days of The Times's
written request therefor. If EDC refuses to approve a bid which exceeds the
Engineer's Estimate by more than ten percent (10%), then EDC shall have a
period of six (6) months following such refusal to either revise the Plans and
Specifications such that the anticipated cost of constructing the Improvements
is reduced to an amount not to exceed the Engineer's Estimate or seek and
obtain the appropriation of additional funds from the City to pay for the
additional expense, or take such other action as EDC may deem necessary in
order to enable The Times to rebid the Construction Work and cause the
construction of the Improvements. If, as a result of EDC's refusal to approve
a bid which exceeds the Engineer's Estimate by more than ten percent (10%),
The Times is delayed in completing construction of the Sanitary Sewer System
and such delay causes "Substantial Completion" (as such term is defined in the
Lease) of the Project to be delayed by virtue of the inability to hook up the
Project to the Sanitary Sewer System, The Times shall have the right to offset
against future Rental (other than Impositions and College Point Improvement
Fund Payments) an amount equal to the Sewer Delay Offset Amount, as more
particularly set forth in Section 4.01 and Article 27 of the Lease.
-27-
<PAGE>
(2) EDC reserves the right, at any time prior to The Times's
acceptance of a bid in accordance with Sec.1.2(b)(1) above, to withdraw its
prior approval of the bidder chosen in the event that EDC shall learn that the
bidder shall have committed any act, or if the bidder shall become the subject
of any investigation or legal proceeding, either or both of which would have
disqualified the bidder from receiving EDC's original approval. Nothing
contained in Sec.1.2(b)(1) or this Sec.1.2(b)(2) shall limit The Times's right
to reject all bids in its sole discretion.
(3) Notwithstanding anything to the contrary contained herein, in the
event that EDC (A) does not approve any bidder selected by The Times, (B)
withdraws its prior approval of any bidder chosen in accordance with
Sec.1.2(b)(1) above, or (C) refuses to approve a bid which exceeds the
Engineer's Estimate by more than ten percent (10%) and is unable, after the six
(6) month period described in Sec.1.2(b)(1) above, to either reduce the cost of
the Construction Work to an amount not to exceed the Engineer's Estimate or
obtain an additional appropriation of funds sufficient to pay for the additional
expense, or otherwise take such other action as would, in the reasonable
opinion of The Times, enable The Times to rebid the Construction Work and
cause the construction of the Improvements, then The Times shall have the
right to revoke its election to construct the Improvements, provided that,
with respect to (A) and (B) above, The Times reimburses EDC for any Funding
already disbursed by EDC to The Times to pay for Resident Engineer Costs.
Upon The Times's revocation of its election and reimbursement to EDC of the
Funding previously disbursed as provided in the foregoing sentence, this
Agreement shall terminate and
-28-
<PAGE>
thereafter neither Party shall have any rights against or obligations to the
other Party by reason of this Agreement, except as otherwise specifically set
forth in this Agreement.
(4) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1)
or Sec.1.2(b)(2) above, at any time after the date hereof The Times shall have
the right, without following the bidding procedure outlined in Sec.1.2(b)(1)
above, to enter into a Construction Contract with respect to the construction
of the Sanitary Sewer System with a Resident Engineer if such Resident
Engineer is the professional consultant engaged by EDC to prepare the Plans
and Specifications and/or the Final Plans and Specifications. Upon execution
of a consultant contract therefor, EDC shall notify The Times in writing of
the professional consultant so engaged by it to prepare the Plans and
Specifications and/or the Final Plans and Specifications.
(5) For purposes hereof, the term "Prohibited Person" shall mean:
(i) Any Person (A) that is in default or in breach, beyond any
applicable grace period, of its obligations under any
material written agreement with EDC or Landlord, or (B) that
directly or indirectly controls, is controlled by, or is
under common control with a Person that is in default or in
breach, beyond any applicable grace period, of its
obligations under any material written agreement with EDC or
Landlord, unless, such default or breach has been waived in
writing by EDC or Landlord, as the case may be.
-29-
<PAGE>
(ii) Any Person (A) that has been convicted in a criminal
proceeding for a felony or any crime involving moral
turpitude or that is an organized crime figure or is reputed
to have substantial business or other affiliations with an
organized crime figure, or (B) that directly or indirectly
controls, is controlled by, or is under common control with
a Person that has been convicted in a criminal proceeding
for a felony or any crime involving moral turpitude or that
is an organized crime figure or is reputed to have
substantial business or other affiliations with an organized
crime figure.
(iii) Any government, or any Person that is directly or indirectly
controlled (rather than only regulated) by a government,
that is finally determined to be in violation of (including,
but not limited to, any participant in an international
boycott in violation of) the Export Administration Act of
1979, as amended, or any successor statute, or the
regulations issued pursuant thereto, or any government that
is, or any Person that, directly or indirectly, is
controlled (rather than only regulated) by a government that
is subject to the regulations or controls thereof.
(iv) Any government, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a government,
the effects or the activities of which are regulated or
controlled pursuant to regulations of the United States
Treasury Department or executive orders of the
-30-
<PAGE>
President of the United States of America issued pursuant to
the Trading with the Enemy Act of 1917, as amended.
(v) Any Person that is in default in the payment to the City of
any real estate taxes, sewer rents or water charges
totalling more than $10,000, (or any person that directly
controls, is controlled by, or is under common control with
a Person in such default), unless such default is then being
contested in good faith in accordance with the law.
(vi) Any Person (A) that has owned at any time during the three
(3) years immediately preceding a determination of whether
such Person is a Prohibited Person any property which, while
in the ownership of such Person, was acquired by the City by
in rem tax foreclosure, other than a property in which the
------
City has released or is in the process of releasing its
interest pursuant to the Administrative Code of the City or
(B) that, directly or indirectly controls, is controlled by,
or is under common control with such a Person.
(c) The Times shall provide EDC with a list of all Contractors, other
than suppliers, whose Contract amount totals more than $100,000, on the form
attached hereto as Exhibit B. The Times will furnish each Contractor, other
than a supplier, whose Contract amount totals more than $100,000, with a
subcontractor questionnaire in the form attached hereto as Exhibit C and/or
such other qualification and background investigation form(s) as may be used
by the City at such time ( collectively, "Investigation Forms") provided by
-31-
<PAGE>
EDC to The Times, and shall use its good faith efforts to cause each such
Contractor to fill out and complete the Investigation Forms in a timely
fashion but in no event later than the completion of the work performed by
such Contractor pursuant to its Contract.
(d) All Construction Contracts, in order to be eligible for
disbursement under this Agreement, shall provide, in substance:
(1) that the Contractor shall obtain and maintain comprehensive
general liability insurance and other insurance in the amounts and
in accordance with the applicable provisions set forth in Appendix
C;
(2) that neither the Contractor nor any of its employees or
subcontractors is or shall be deemed to be an agent, servant,
employee or contractor of the City or EDC by virtue of this
Agreement or by virtue of any approval, permit, license, grant,
right or other authorization given the City, EDC or any of their
respective officers, officials, directors, members, agents or
employees; and that the Contractor shall not commence any legal
proceeding against the City or EDC to recover any compensation
which may be payable under the Construction Contract;
(3) that the Contractor is solely responsible for the work, direction,
compensation and personal conduct of its employees and
subcontractors;
(4) that the Contractor shall indemnify and hold harmless the City,
EDC and their respective agents, officers, directors, officials,
members and employees from any and all claims, judgments or
liabilities to which they may be subject
-32-
<PAGE>
because of any act or omission of the Contractor or its respective
agents, officers, directors, employees or subcontractors arising
out of or in connection with the pertinent Construction Contract
or because of any negligence, fault or default of the Contractor
or its respective agents, employees, officers, directors or
subcontractors (as the case may be);
(5) that the Contractor shall maintain accurate, readily auditable
records and accounts with supporting documentation, in accordance
with Accounting Principles, of all work performed, and receipts
and expenditures made, in connection with the pertinent
Construction Contract, and that the Contractor shall make such
records and accounts available to EDC, the City and each of their
respective agents and employees, for inspection and audit at
reasonable times and upon reasonable written notice for a period
of six (6) years after completion of the pertinent Construction
Contract;
(6) provisions incorporating the requirements of Sec.6.5(a) (Compliance
with Applicable Law) and Sec.9.1 (Conflict of Interests); and
(7) that the Contractor represents and warrants, and shall cause its
subcontractors and material suppliers to represent and warrant,
that state and local sales tax has been excluded from the contract
price, to the extent applicable; provided, however, that the
Contractor and its subcontractors and material suppliers shall be
responsible for and pay any and all applicable taxes, including
sales and use taxes, imposed upon leased tools, machinery,
equipment, and upon
-33-
<PAGE>
all supplies and materials and other property which are consumed in the course
of construction or for any other reasons not incorporated into the
Construction Site.
(e) Any proposed changes or amendments to a Construction Contract, the
effect of which would be to increase the amount of the Funding, shall be made
in accordance with the provisions of Sec.2.3 hereof. Any proposed changes or
amendments to a Construction Contract which affect the provisions to be
included in such Construction Contract pursuant to Sec.1.2(d) hereof shall not
be made unless approved in writing by EDC, which approval shall not be
unreasonably withheld and shall be deemed given unless denied in writing
within five (5) Business Days after EDC's receipt of The Times's written
request for such approval, and no Funding shall be disbursed in respect of any
Work affected by any such change or amendment unless approved in writing or
deemed approved by EDC.
(f) In addition to the provisions required to be included in the
Construction Contracts pursuant to Sec.1.2(d) hereof, The Times may include in
the Construction Contracts (and the bid packages therefor) such other
provisions as The Times deems necessary to incorporate the requirements of
this Agreement therein, including without limitation, that the Contractor
shall not receive payment under its Construction Contract until all the
conditions for disbursement described in Article 4 hereof have been satisfied
and The Times has received payment of the Funding from EDC under this
Agreement.
-34-
<PAGE>
Sec.1.3 Liaison to EDC
--------------
The Times agrees that it will cause the Person or Persons on The Times's
staff, described in the Sewer System Election Notice as the Person or Persons
primarily responsible to communicate with EDC regarding the performance of the
Work, to be available to the extent reasonably required by EDC in connection
with this Agreement. The Times further agrees to use its good faith efforts
to notify EDC in writing of any intended substitution of said Person or
Persons at least five (5) days prior to the date such substitution will take
effect but in any event will notify EDC in writing of any such substitutions
on the day such substitution will take effect.
-35-
<PAGE>
ARTICLE TWO - THE FUNDING
-------------------------
Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions,
--------------------
representations and warranties contained in this Agreement, EDC agrees to
disburse the Funding and The Times agrees to accept the Funding and all other
agreements and obligations of EDC and the City set forth herein as full
consideration for performance by The Times of the Work. Subject to EDC's
remedies upon an Event of Default and except as otherwise provided herein, the
Funding, once disbursed under this Agreement, shall not be subject to any
reimbursement whatsoever to EDC.
(b) The amount of the Funding shall be consideration for any and all
costs, fees and/or expenses of The Times in any way connected with the
performance of the Work and, subject to the receipt of such Funding, The Times
will be solely responsible for completion of the Improvements in accordance
with the Final Plans and Specifications. The Times acknowledges that the
Funding is not a fee or other compensation earned by or paid to The Times.
Sec.2.2 Disbursements. (a) The Times agrees to accept the Funding and to
-------------
utilize the proceeds thereof solely in connection with the Work. Except as
otherwise specifically set forth herein, in no event shall The Times be
required to expend any of its own funds to pay for the performance of the Work
and the construction of the Improvements. After the completion of the portion
of the Work to which the portion of the payment being disbursed
-36-
<PAGE>
applies, disbursements shall be made by EDC to The Times as follows:
(1) With respect to Hard Costs, after receipt by EDC of all items
required by Sec.4.2 below, in installments equal to (A) the product of (i) the
measurements of the quantities of items attributable to the Construction Work
(as certified by the Resident Engineer or the Construction Manager) and (ii)
the unit price for each such item, (B) less ten percent (10%) retainage, until
fifty percent (50%) completion of the Construction Work, and upon fifty
percent (50%) completion of the Construction Work such lesser retainage as The
Times may, in its sole discretion, require in its Construction Contracts to be
retained (the "Retainage"), subject to disbursement as set forth in (3) below;
(2) With respect to Resident Engineer Costs, in monthly installments
equal to the Resident Engineer Costs for the previous month, calculated based
on the Resident Engineer's fee schedule attached to the Construction Contract
with respect to the Resident Engineer;
(3) With respect to the Retainage, within twenty (20) days after the
Final Acceptance Date; provided, however, such portion of the Retainage equal
to one percent (1%) of the total cost of performing the Work shall not be
disbursed upon the Final Acceptance Date but shall be disbursed within twenty
(20) days after Final Completion.
(b) Intentionally omitted.
(c) All disbursements shall be made by check at the principal office
of EDC, or at such other place within the City of New York as EDC may
designate. Disbursement requests shall be submitted within the time periods
and in the manner provided therefor in Article 4.
-37-
<PAGE>
(d) No portion of the Funding shall be advanced for materials not
incorporated into the Construction Site.
(e) Disbursements of the Funding shall be no more frequent than every
thirty (30) days and shall be made by EDC within ten (10) Business Days after
the date EDC receives from The Times a complete disbursement request,
reasonably satisfactory to EDC, together with the Requisition and all such
other documentation as may be required or reasonably requested by EDC.
(f) If EDC fails to disburse the Funding in accordance with the terms
and conditions of this Agreement, and as a result of such failure any one or
more of the Contractors cease performing the Construction Work, then provided
that The Times gives EDC thirty (30) days prior written notice and an
opportunity to cure such failure, The Times shall have the right, but not the
obligation, to pay such Contractor or Contractors from its own funds for the
performance of the Construction Work and, in accordance with Sec.9.5(b) hereof,
receive an offset against future Rental (other than Impositions) due under the
Lease and against College Point Improvement Payments due under the Lease, in
an aggregate amount equal to the funds so disbursed by The Times to such
Contractor or Contractors, from the date that The Times paid such funds to
such Contractor or Contractors until the earlier to occur of the date on which
EDC recommences the disbursement of the portion of the Funding allocable to
the Construction Work performed by such Contractor or Contractors or the date
of such offset.
(g) If any one or more of the Contractors cease performing the
Construction Work as a result of EDC's failure to disburse the Funding to The
Times in accordance with
-38-
<PAGE>
the terms and conditions hereof, then, notwithstanding anything to the
contrary contained herein, EDC shall indemnify and hold harmless The Times
Indemnitees from and against any and all claims, judgments, liabilities and
causes of action whatsoever instituted and/or obtained by such Contractor or
Contractors as a result of such failure to fund. The obligation of EDC to
indemnify and hold harmless The Times Indemnitees shall include but not be
limited to the payment of any and all costs and reasonable fees (including
reasonable legal fees) as may be actually incurred by The Times Indemnitees as
a direct result of EDC's failure to fund.
Sec.2.3 Funding of Costs of Changes
---------------------------
(a) Notwithstanding any provision to the contrary contained in this
Agreement, EDC shall not disburse increased Funding on account of Eligible
Costs covered by changes to the Final Plans and Specifications except as
expressly provided in this Sec.2.3. In no event will the amount of the Funding
be increased on account of such changes made other than pursuant to
Sec.2.3(b)(i), Sec.2.3(b)(ii) or Sec.2.3(d) hereof. The Eligible Costs incurred
in connection with all changes made in accordance with Sec.2.3(b)(ii) or
Sec.2.3(d) hereof shall be paid for with the Funding.
(b) Changes Initiated by The Times
------------------------------
(i) Material Changes. In no event shall The Times have the
------------------
right to initiate Material Changes to the Final Plans and Specifications and
EDC shall not be obligated to disburse the Funding on account of Eligible
Costs increased by any such Material Change initiated by The Times. If, in
the course of the Construction of the
-39-
<PAGE>
Improvements, The Times or its Contractors determines that a Material Change
to the Plans and Specifications will be required to complete the Improvements,
The Times shall notify EDC of such determination. Within ten (10) days after
EDC's receipt of such notification, EDC shall either inform The Times that it
believes no Material Change is required or it shall instruct the professional
consultant engaged by EDC to prepare the Plans and Specifications (or the
Resident Engineer if such Resident Engineer is the same Person as the
professional consultant engaged by EDC) to make the appropriate changes to the
Plans and Specifications. If EDC fails to respond to The Times within the ten
(10) day period described above and if the Resident Engineer is the same
person as the professional consultant engaged by EDC to prepare the Plans and
Specifications, the Material Changes requested by The Times shall be deemed
approved by EDC and the Resident Engineer shall have the right to make the
appropriate changes to the Plans and Specifications. If EDC instructs its
professional consultant to make changes to the Plans and Specifications, EDC
shall cause such professional consultant to complete such changes within
thirty (30) days after the date of EDC's instruction.
(ii) Non-Material Changes. The Times shall have the right to
----------------------
initiate changes to the Final Plans and Specifications which result only in a
change in the quantity of materials to be supplied under a Construction
Contract (even if such change results in an increase of the cost of such
Construction Contract). EDC shall disburse the Funding on account of each
such change to the Final Plans and Specifications described above, provided
that EDC is notified of such change prior to The Times's submission of a
Requisition pursuant to Article 4 for funds relating to the Work covered by
the change, and further
-40-
<PAGE>
provided that the need for such change does not result from or arise out of an
error or omission on the part of The Times or an Affiliate, any Contractor or
subcontractor.
(c) Intentionally Omitted.
(d) Changes Initiated by EDC
------------------------
(i) Changes in the Work. EDC shall have the right and
----------------------
authority, on behalf of itself and the Reviewing Parties, to make
interpretations of the Final Plans and Specifications and/or to order minor
changes in the Construction Work that do not increase the price of a
Construction Contract or that do not cause "Substantial Completion" (as such
term is defined in the Lease) of the Project to be delayed by virtue of the
inability to hook up the Project to the Sanitary Sewer System. The Times
shall promptly cause the affected Contractor(s) to comply with any such order.
(ii) Change Orders. In addition to the changes requested
---------------
pursuant to clause (i) above and changes requested by The Times pursuant to
Sec.2.3(b)(i) hereof, from time to time during the course of the Work, changes
in the Requirements governing the construction of the Improvements, field
conditions or other unexpected conditions may require changed, deleted and/or
additional work to be performed. For purposes of this Sec.2.3(d), said changed,
deleted or additional work shall be referred to as "change order work". Only
EDC, on behalf of itself and the Reviewing Parties, shall have the right to
require change order work to be performed. All change order work must be
performed only if ordered by a written directive from EDC (for purposes of
this Sec.2.3(d), the "change order"). Neither oral directives nor any writing
not designated by EDC as a change order will constitute change orders. Upon
receipt of a change order from EDC, the Times shall cause its Contractors
-41-
<PAGE>
to promptly comply with it by performing all necessary work in accordance
therewith. If work is added or deleted by a change order, then the amount of
the increase (in the event the change order work would involve any adjustment
in the price of a Construction Contract that would bring the aggregate price
of the Work to an amount greater than the amount of the Funding) or decrease
in the Funding shall be determined in one or more of the following ways as may
be applicable:
(A) If The Times and the Contractor shall agree upon a lump sum value
or a unit price value to increase or decrease the amount of the Funding
for the work specified, The Times shall notify EDC of such agreed upon
lump sum value or unit price value and EDC shall, or shall cause, such
value to be stated in writing in the change order, and the amount of the
Funding shall be changed by such value; and/or
(B) If the Construction Contract and/or the bid proposal of the
affected Contractor is based upon or shall contain unit prices which are
to be applicable to the type of work involved in the proposed change
order work, then said unit prices shall be used to set the value of the
increase or decrease to the amount of the Funding for the change order
work; and/or
(C) If The Times and the affected Contractor cannot agree upon a lump
sum value or unit price value, and no unit price is specified in the
Construction Contract and/or the bid proposal of such Contractor, then
the increase or decrease to the amount of the Funding shall be
determined on a time and materials basis.
(iii) Payment for Change Order Work. Payments for change order
-------------------------------
work shall become due and shall be made by EDC to The Times after the
Contractor has performed
-42-
<PAGE>
the change order work and after the Contractor submits a fully signed copy of
said change order (or the portion thereof covered by a Requisition) on the
form annexed hereto as Exhibit D, with The Times's next requisition for
payment, noting on said change order that the Contractor agrees to and accepts
said change order. In the event that the change order is a credit change
order, EDC shall make the deduction for said change order immediately upon the
issuance of said change order against any funds due or to become due under
this Agreement and/or any other change orders with respect to the relevant
Contractor, subcontractor or material supplier.
-43-
<PAGE>
ARTICLE THREE - TERM
--------------------
Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon
-----
the execution of this Agreement by both Parties and the unconditional delivery
of this Agreement by each Party to the other and shall expire upon the
occurrence of any of the following events: (i) the expiration of the 90 Day
Election Period if The Times fails to deliver to EDC a Sewer System Election
Notice within such period, (ii) the date, prior to the date which is one
hundred and eighty (180) days after the Project Commencement Date, on which
EDC receives notice from The Times, in accordance with Sec.1.1(b)(1) hereof, of
The Times's revocation of its election to construct the Sanitary Sewer System,
or (iii) if The Times has delivered to EDC a Sewer System Election Notice and
has not revoked such election on or prior to the date which is one hundred and
eighty (180) days after the Project Commencement Date and has in fact
commenced the Construction Work, then the later to occur of either (x) one
month after Final Completion of the Work, or (y) the complete disbursement by
EDC to The Times of all amounts payable to The Times pursuant to the terms of
this Agreement, unless sooner terminated by EDC in accordance with this
Agreement. All rights, remedies and liabilities arising prior to the
termination or expiration of the Term shall survive the date of termination or
expiration, as the case may be.
-44-
<PAGE>
ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT
------------------------------------------
Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to
---------------------------------
disburse any of the Funding to The Times unless, at any time prior to the
first request for disbursement of the Funding but no later than ten (10) days
prior to the date on which the first payment of the Funding to be made
pursuant to this Agreement is sought, EDC shall have received the following
documents, together with a cover sheet (a "Completed Cover Sheet") listing the
items submitted:
(a) a legal opinion by counsel to, or general counsel of, The Times
(addressed to EDC) in the form annexed hereto as Exhibit E, to the
effect that (I) this Agreement is legal, valid and binding upon
and enforceable against The Times in accordance with its terms
(subject, as to enforceability, to principles of equity and
applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), and (II) The Times has been duly
authorized to execute and deliver this Agreement;
(b) a certificate, in the form annexed hereto as Exhibit F, of an
authorized officer of The Times certifying the specimen signature
of each officer, director or agent of The Times authorized to
deliver Requisitions under this Agreement;
(c) copies of any then executed Construction Contract(s), containing
all the provisions required pursuant to Sec.1.2(d) hereof; and
(d) a collateral assignment by The Times to EDC of The Times's right,
title and
-45-
<PAGE>
interest to the Construction Contracts, which collateral assignment shall be
effective only upon an Event of Default and the termination of this Agreement.
Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC
-------------------------------------------------------------
shall not be obligated to make the first disbursement of the Funding or any
subsequent disbursement with respect to the Work unless the following
conditions, in addition to the conditions described in Sec.4.1, shall have been
satisfied:
(a) The following documents, in form and substance reasonably
satisfactory to EDC, together with a Completed Cover Sheet, shall, except to
the extent previously submitted by The Times, be delivered to EDC at least ten
(10) days in advance of the date on which each (except as otherwise indicated
in this Sec.4.2) payment is sought:
(i) copies of all Contractor's Approvals necessary to lawfully perform
the Construction Work for which the Funding is being sought in
accordance with the Final Plans and Specifications;
(ii) a requisition executed and certified by an authorized
representative of The Times (and addressed to EDC), setting forth:
(x) the amount of the requested disbursement, (y) an itemization
of the Eligible Costs for which the disbursement is sought, and
(z) a list of Contractors whose work is covered by the
requisition, indicating the amount requested with respect to each
such Construction Contract, with a certification by such
authorized representative
-46-
<PAGE>
that such Eligible Costs have not previously been reimbursed under
this Agreement. The requisition shall be accompanied by the
certification described in Sec.6.1 hereof and copies of (I) all
Construction Contracts on account of which payment is being sought
that have not been previously delivered, containing all the
provisions required pursuant to Sec.1.2(d) hereof (or for
Construction Contracts that have been previously delivered, a
statement to that effect and copies of any amendments thereof);
(II) as applicable, requisitions or applications for payment by
the Resident Engineer or the Construction Manager to The Times;
(III) as applicable, a copy of an "Application and Certificate for
Payment", substantially in the forms annexed hereto as Exhibit G,
completed and executed by the Resident Engineer or the
Construction Manager with respect to all work performed by
Contractor(s) and covered by The Times's requisition, together
with a statement of the Resident Engineer or the Construction
Manager addressed to EDC stating the quantities of materials
installed with respect to the Construction Work completed as of
the date of the requisition and that, to the Resident Engineer's
or the Construction Manager's knowledge, the Construction Work
performed by the Contractor(s) and covered by the requisition has
been performed to the Resident Engineer's or the Construction
Manager's reasonable satisfaction substantially in accordance with
the Final Plans and Specifications; and (IV) in connection with
each disbursement request other
-47-
<PAGE>
than the first disbursement request, partial releases of liens
from all Contractors, subcontractors and suppliers in respect to
Construction Work performed under a Construction Contract or
subcontract and for which the Eligible Costs in connection
therewith have been reimbursed with the Funding pursuant to a
prior Requisition (the items described in this paragraph (ii),
collectively, the "Requisition");
(iii) such additional documents, data or information reasonably
requested by EDC with respect to the Construction Site and the
Work or in support of the Requisition, including without
limitation, documents as would customarily be required by City
agencies engaged in projects similar in scope to the Work such as
trade payment breakdowns in support of all subcontractors'
requisitions to the Resident Engineer, Construction Manager or
General Contractor (as the case may be), if any, invoices, and
receipts;
(iv) a written statement by DLS certifying that each Contractor
performing Work has complied with the City's equal employment
requirements under mayoral Executive Order No. 50 (April 25,
1980), as amended, if applicable, or evidence from The Times or
DLS that Executive Order No. 50 or its successor does not apply,
it being understood that such written statement or other
satisfaction by DLS for each Contractor only needs to be submitted
at the time of the submission of the first requisition covering
such Contractor's work and it being further understood that,
notwithstanding anything to the
-48-
<PAGE>
contrary contained herein, for so long as New York State Labor Law
Sec.220 or any successor statute requires contractors performing
work on public works projects to pay journey-level wages to
trainees, the trainee requirements of Executive Order No. 50 shall
not be applicable to the Construction Work, the Contractors and
the subcontractors and the Contractors and the subcontractors shall
in no event be deemed to be in noncompliance with Executive Order
No. 50 due to noncompliance with such trainee requirements; and
(v) in connection with the first disbursement request, as described in
Sec.6.12, a completed and duly executed W/MBE Plan in the form
annexed hereto as Exhibit H.
(b) As of the date of the disbursement, (i) the representations and
warranties made in Article Five shall be correct and complete and (ii) there
shall exist no unbonded public improvement lien relating to the Funding;
provided, however, that in the event there exists an unbonded public
improvement lien relating to the Funding, EDC shall continue to disburse to
The Times those portions of the Funding which are otherwise payable hereunder
reduced only by the amount of such unbounded lien.
Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this
-------------------------
Article Four shall be directed to EDC's Vice President for Construction.
-49-
<PAGE>
ARTICLE FIVE - REPRESENTATIONS, WARRANTIES AND
----------------------------------------------
GUARANTIES OF THE TIMES
-----------------------
To induce EDC to disburse the Funding, The Times represents and warrants
as follows:
Sec.5.1 Organization; Standing. The Times is a corporation duly organized
-----------------------
and validly existing under the laws of the State of New York and has all
requisite power, authority and legal right to execute, deliver and perform its
obligations under this Agreement. A copy of The Times's certificate of good
standing from the Secretary of State of the State of New York is attached
hereto as Appendix D, and hereby made a part hereof.
Sec.5.2 Intentionally omitted.
Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery
--------------------------------------
of this Agreement by The Times is not, and the performance of this Agreement
by The Times will not be, effectively prohibited or prevented by, or in breach
of (i) the certificate of incorporation or by-laws of The Times, or (ii) to
the best of The Times's knowledge, any presently existing or effective law,
judgment, order, writ, injunction, decree, rule or regulation of any court or
Governmental Authority applicable to The Times, or (iii) any agreement,
instrument or undertaking which is binding on The Times.
-50-
<PAGE>
Sec.5.4 No Litigation. As of the date of this Agreement there are no
--------------
suits or proceedings pending or, to the best of The Times's knowledge,
threatened against The Times which would materially affect the construction of
the Improvements, the consummation of the transactions contemplated by this
Agreement, or the full performance of the obligations of The Times under this
Agreement.
Sec.5.5 Intentionally omitted.
Sec.5.6 Intentionally omitted.
Sec.5.7 Quality of Work; Guaranties and Warranties.
-------------------------------------------
(a) The Times shall cause the Construction Work to be performed in a
good and workmanlike manner, and all materials and equipment and workmanship
utilized or furnished in connection with the Construction Work shall be in new
(unless otherwise specified in the Final Plans and Specifications) and good
condition, fully operational, without defects (except to an immaterial
extent), substantially in accordance with the Final Plans and Specifications.
The Times shall, in connection with the Construction Work, obtain the maximum
guaranties and warranties on labor, materials and equipment as are generally
available within the relevant industry. The costs of obtaining such
guaranties and warranties shall be considered Eligible Costs and are payable
with the Funding.
(b) (i) The Times shall repair, replace, restore, remedy or correct,
or cause to be
-51-
<PAGE>
repaired, replaced, restored, remedied or corrected, any defects, faults or
deficiencies (including any damage arising out of such defects, faults or
deficiencies) in workmanship or materials which exist, occur, or are
discovered within or affecting the Construction Site and are covered by the
guarantees and warranties required to be obtained pursuant to this Sec.5.7,
within ten (10) Business Days after notice of such defect, fault or deficiency
from EDC or the City to The Times (provided that The Times receives such
notice at least ten (10) days prior to the one year anniversary of the
relevant guaranty or warranty). If the nature of the correction or remedy is
such that The Times cannot reasonably be expected to complete such remedy or
correction or cause such remedy or correction to be completed within ten (10)
Business Days of said notice, The Times shall commence, or cause the
commencement of, such remedy or correction within such ten (10) Business Day
period and diligently and in good faith prosecute such remedy or correction to
completion.
(ii) Notwithstanding anything to the contrary contained in clause
(i) above, if any guaranty or warranty extends for a period longer than twelve
(12) months after the Final Acceptance Date, The Times shall assign its rights
and interests therein to EDC and the City, which assignment shall be in form
and substance reasonably acceptable to EDC, and executed by The Times, the
Construction Manager or the General Contractor (as the case may be).
Thereafter, The Times shall have no further obligation under this Agreement to
repair, replace, restore or correct, or cause the repair, replacement,
restoration or correction of, any defects, faults or deficiencies (including
any damage arising out of such defects, faults or deficiencies) in workmanship
which The Times is notified of on or after
-52-
<PAGE>
the date of the assignment of such guaranties and warranties and EDC and the
City will not prosecute claims against The Times but rather will seek
compensation or services from the party or parties giving the pertinent
guaranty or warranty. The Times will cooperate with EDC and the City, at no
cost or expense to The Times, in the prosecution of any claims against such
parties after the expiration of the above described twelve (12) month Guaranty
Period.
(c) Intentionally Omitted.
(d) If The Times fails to repair, replace, restore, remedy or correct,
or cause to be repaired, replaced, restored, remedied or corrected, any
defect, fault or deficiency within ten (10) Business Days after notice thereof
as provided in Sec.5.7(b), or, if the nature of such correction or remedy is
such that The Times cannot reasonably be expected to complete such repair,
replacement, restoration, remedy or correction, or cause such repair,
replacement, restoration, remedy or correction to be completed, within ten
(10) Business Days after said notice, The Times has not promptly commenced, or
caused to be commenced, within said ten (10) Business Days or diligently and
in good faith prosecuted, or caused to be prosecuted, such repair,
replacement, restoration, remedy or correction to completion, then EDC or the
City may (but is not obligated to) provide The Times with written notice that,
if such remedy or correction is not completed or commenced and diligently and
in good faith prosecuted, as the case may be, within ten (10) Business Days
following delivery of said notice, EDC or the City shall perform the required
corrective or remedial work. The Times shall then cause the following to
happen: (i) repair, replace,
-53-
<PAGE>
restore, remedy or correct, or cause to be repaired, replaced, restored,
remedied or corrected, the item within ten (10) Business Days following such
notice except as provided in clause (ii) below, or (ii) if the nature of the
repair, replacement, restoration, remedy or correction is such that The Times
cannot reasonably be expected to complete, or cause to be completed, such
repair, replacement, restoration, remedy or correction within said ten (10)
Business Days following such notice, then The Times shall be required to
commence, or cause to be commenced, within ten (10) Business Days such repair,
replacement, restoration, remedy or correction, and diligently and in good
faith prosecute, or cause to be prosecuted, such repair, replacement,
restoration, remedy or correction to completion. If in the event of item (i)
of the preceding sentence, such repair, replacement, restoration, remedy or
correction is not completed or caused to be completed within ten (10) Business
Days, or, in the event of item (ii) of the preceding sentence, such repair,
replacement, restoration, remedy or correction is not commenced or caused to
be commenced within ten (10) Business Days and diligently completed or caused
to be completed, then EDC or the City may (but is not obligated to) perform
the required corrective work itself or engage independent contractors and
subcontractors to perform such corrective work, and shall be entitled to
reimbursement for the reasonable cost of such work, plus an amount equal to
interest at the Late Charge Rate on, and the out-of-pocket costs of collection
of, any reimbursement due EDC or the City from The Times hereunder, including
but not limited to reasonable attorneys' fees. If The Times disputes the need
for such repairs, the obligation of The Times pursuant to this Agreement to
repair or cause such repairs to be
-54-
<PAGE>
made, or the cost of such repair, such dispute shall be resolved by
arbitration in accordance with the procedure for arbitration set forth in
Article 34 of the Lease and the time periods set forth in this Sec.5.7(d) shall
be tolled during the pendency of such arbitration. The costs of such
arbitration (including, but not limited to, legal fees) shall be paid as set
forth in Section 34.02(b) of the Lease.
(e) Intentionally omitted.
(f) Any warranties or guaranties relating to the construction and
completion of the Construction Work or materials in connection therewith that
are required to be obtained hereunder shall, to the extent reasonably
obtainable by The Times, the Resident Engineer, the Construction Manager or
the General Contractor (as the case may be), expressly be made for the benefit
of The Times, the Resident Engineer, the Construction Manager or the General
Contractor (as the case may be), EDC and the City, and, to the extent that EDC
or the City are not expressly named in any such warranty or guaranty, The
Times, the Resident Engineer, the Construction Manager or the General
Contractor (as the case may be), shall assign its rights and interest therein
to EDC and the City in accordance with Sec.5.7(b)(ii) hereof.
(g) The provisions of this Sec.5.7 shall survive the completion of
disbursement of the Funding and the termination of this Agreement until the
expiration of the respective Guaranty Periods or such period of time
thereafter necessary to remedy or correct any default, fault or deficiency
discovered within such Guaranty Periods which is required to be remedied or
corrected hereunder.
-55-
<PAGE>
(h) Notwithstanding anything to the contrary contained in this
Agreement, if any Person other than The Times connects into the Sanitary Sewer
System, then the provisions of this Sec.5.7 shall be deemed null and void and of
no further effect and thereafter The Times shall have no responsibilities or
obligations with respect to the workmanship and operation of the Sanitary
Sewer System as set forth in this Sec.5.7.
-56-
<PAGE>
ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC
------------------------------------------------------
To induce The Times to enter into this Agreement and perform the Work,
EDC represents and warrants as follows:
Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation,
------------------------
organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation
Laws and has all the requisite power, authority and legal right to execute,
deliver and perform its obligations under this Agreement.
Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has
--------------------------------------------
been duly authorized, executed and delivered by EDC and constitutes a legally
binding obligation of EDC enforceable in accordance with its terms. A legal
opinion by general counsel of EDC (addressed to The Times) providing that this
Agreement is legal, valid and binding upon and enforceable against EDC in
accordance with its terms (subject, as to enforceability, to principles of
equity and applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), is attached hereto as Appendix E and hereby
made a part hereof. A certificate of the Secretary of EDC, dated as of the
date of this Agreement, certifying to the adoption of resolutions by the Board
of Directors of EDC authorizing the execution and delivery of this Agreement
by EDC is attached hereto as Appendix F and hereby made a part hereof.
-57-
<PAGE>
ARTICLE SIX
-----------
COVENANTS
---------
Sec.6.1 Requisitions Update The Times's Representations. The Times
---------------------------------------------------
covenants that each Requisition presented to EDC under Article Four shall be
accompanied by a completed certification, in the form attached hereto as
Exhibit I.
Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the
-------------------------------------------------------
Term, The Times shall:
(a) comply with all of the terms, conditions and covenants now or in
the future binding upon or applicable to The Times under this Agreement;
(b) do all things necessary to maintain and keep in full force and
effect its existence, rights and privileges under the laws of the State of New
York; and
(c) comply with, and do all things reasonably necessary to cause the
Work to be performed in compliance with all Requirements applicable to the
Work and/or the Construction Site, it being understood that The Times shall
not be held responsible for failure to comply with the Requirements to the
extent that such failure arises out of The Times's performance of the Work in
accordance with the Final Plans and Specifications.
Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The
------------------------------------------------------------
Times shall maintain or cause to be maintained the insurance coverage
described in Appendix C
-58-
<PAGE>
attached hereto. The Times shall comply with all of the applicable provisions
of such insurance policies. Nothing contained in this Sec.6.3 is intended to
confer any rights upon any third party.
Sec.6.4 Maintenance of Office. The Times will maintain an office in the
-----------------------
City of New York where notices with respect to this Agreement may be delivered
to it and inspections and audits in accordance with Sec.6.7 may be conducted.
Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or
-------------------------------
cause to be included, the following requirements, as applicable, in all
Construction Contracts, and shall require, or cause to be required, all
subcontracts with respect to the Construction Work to include the same
requirements, so that the Contractor(s) and any subcontractors shall agree, in
substance:
(i) to comply with (1) the applicable provisions of City and New
York State equal employment and affirmative action laws applicable
to construction contractors and non-construction contractors which
are annexed to and made a part of this Agreement as Appendix G
(consisting of "Construction Contract Rider" pursuant to mayoral
Executive Order No. 50, provided, however that the trainee
requirements set forth therein shall be inapplicable for so long
as New York State Labor Law Sec.220 or any successor statute
requires contractors performing work on public works projects to
pay journey-level wages to trainees), and the filing of any required
construction employment reports with
-59-
<PAGE>
the City's Bureau of Labor Services on the forms annexed hereto as
Appendix H; (2) New York State Labor Law Sec.220e, and (3) City
Administrative Code Sec.6-108;
(ii) to comply with the applicable provisions of the New York
City Noise Control Code (Administrative Code Sec.24-216, as amended,
and related regulations); and
(iii) to pay no less than prevailing wage rates and supplemental
benefits to laborers, workers and mechanics pursuant to Sec.220(3)
of the New York State Labor Law in accordance with the currently
scheduled rates, as amended from time to time.
(b) The Times shall use its good faith efforts to promptly, diligently
and continuously enforce the full and faithful performance by the Contractors
with whom The Times enters into Construction Contracts hereof with the
provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith
efforts to cause such Contractors to enforce such compliance by the
subcontractors and materials suppliers hired by such Contractors in connection
with the Construction Work.
Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall
-----------
not assign this Agreement except that The Times may assign this Agreement to
an Affiliate without EDC's prior written consent, provided that such Affiliate
assumes all the rights and obligations of The Times under this Agreement, and
that all the representations, warranties and covenants made by The Times in
this Agreement shall be similarly made by such
-60-
<PAGE>
Affiliate, and further provided that The Times provides to EDC a copy of the
executed written agreement evidencing such assignment and assumption.
Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate,
-----------------------
readily auditable records and accounts with supporting documentation, of (i)
all of the costs related to the construction of the Improvements, (ii) all of
its receipts and expenditures in connection with the Funding and with the
Work, and (iii) all financial accounts and transactions maintained or
undertaken in connection with this Agreement. The Times shall make such
records available for inspection and audit at The Times's place of business
within New York City by EDC and the City at reasonable times and upon
reasonable advance notice. All such records and accounts shall be maintained
for a period of six years after termination of this Agreement. The provisions
of this Sec.6.7 shall survive the expiration or earlier termination of this
Agreement.
Sec.6.8 Intentionally omitted.
Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and
------------------------------------
hold the proceeds of the Funding (including any insurance proceeds arising out
of any casualty affecting property purchased with the Funding) as a trust fund
to be applied exclusively for the payment of Eligible Costs (or reimbursement
to The Times for the payment of Eligible Costs) in accordance with the terms
of this Agreement and shall not use any part of the same for any other
purpose.
-61-
<PAGE>
Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of
-----------------------------
the Funding shall not constitute a waiver of any default by The Times on
account of defective construction work in performance of the Work or deviation
from the Final Plans and Specifications. No part of the Funding shall be
disbursed for the correction of such non-conforming work unless either (i)
such defective work was performed in accordance with the Final Plans and
Specifications, or (ii) such deviation from the Final Plans and Specifications
was necessitated as a result of unexpected field conditions and was performed
in accordance with good construction practices and EDC approved (which
approval shall not be unreasonably withheld or delayed), in writing, the
performance of such work.
Sec.6.11 Participation by Women and Minority Owned Businesses
----------------------------------------------------
(a) EDC is committed to maximizing meaningful participation by women-
owned business enterprises ("WBEs") and minority-owned business enterprises
("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its
contracting opportunities. Based on its review of the scope of the Work and
the lists of certified W/MBEs maintained by the interested government entities
identified below, EDC estimates that a total aggregate W/MBE percentage of
twenty-five percent (25%) can be attained by The Times for the Work.
Accordingly, prior to receipt of any disbursements hereunder, The Times shall
complete a utilization plan (the "W/MBE Plan"), in the form of Exhibit H
attached hereto, describing The Times's plan for participation of W/MBEs in
the Work.
(b) In order to be considered W/MBEs for purposes of inclusion in the
W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE
Plan must
-62-
<PAGE>
have received certification, as WBEs and/or MBEs, from the New York City
Department of Business Services ("DBS"). Businesses that have been certified
as being women or minority owned by the New York State Department of Economic
Development or the Port Authority of New York and New Jersey may be eligible
to receive expedited certification from DBS, after completing the DBS
"Expedited Certification Affidavit" in the form of Exhibit H-1 attached
hereto. Each of these entities maintain current lists of certified W/MBEs;
The Times is encouraged to contact these entities in order to obtain copies of
their current lists of certified W/MBEs who may be qualified to participate,
either as Contractors, subcontractors or materials suppliers, in the Work.
Together with submission of the W/MBE Plan, The Times shall submit
verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan
are certified as WBEs and/or MBEs by DBS prior to the award of the contract
with respect to such Contractor, subcontractor or material supplier.
(c) The Times should use the W/MBE Plan to identify potential W/MBEs
that The Times, the Resident Engineer, the Construction Manager or the General
Contractor intends to employ as Contractors, subcontractors or materials
suppliers. The W/MBE Plan requires the identification of the specific trade
and/or the specific material to be supplied by such W/MBEs. The W/MBE Plan
requires that the level of participation by W/MBEs be described based on (i) a
dollar value estimate of participation by W/MBEs (the "W/MBE Participation
Dollar Value") and (ii) the percentage of the total Funding that will be
passed on to W/MBEs (the "W/MBE Percentage").
(d) The Times shall not be required to utilize the specific W/MBEs
listed in the
-63-
<PAGE>
W/MBE Plan and substitutions may be made; however, The Times shall provide for
the participation of W/MBEs in the Work at a level equal to or greater than
the total aggregate W/MBE Participation Dollar Value and the total aggregate
W/MBE Percentage as each are set forth in the W/MBE Plan. The W/MBE
Participation Dollar Value and the W/MBE Percentage recorded on the W/MBE Plan
are a part of this Agreement. The Times cannot reduce the W/MBE Participation
Dollar Value or the W/MBE Percentage.
(e) If The Times breaches the foregoing obligation relating to the
participation of W/MBEs in the Work, then, as its sole and exclusive remedy
against The Times with respect to such breach, EDC shall be entitled to
withhold from disbursement to The Times a portion of the Funding in the amount
equal to the difference between (i) the W/MBE Participation Dollar Value set
forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value
achieved by, and in fact paid to participating W/MBEs by or on behalf of, The
Times in respect of the completed Work. No portion whatsoever of any of the
Funding that is withheld pursuant to this Sec.6.11(e) shall be charged to the
account of any W/MBEs employed in respect of the Work.
(f) The Times may substitute other certified W/MBEs for those
identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which
approval shall not be unreasonably withheld) before being employed, either as
Contractors, subcontractors, or as materials suppliers, in respect of the
Work. The Times may also add additional W/MBEs to the W/MBE Plan provided
that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage
falls below that identified in the W/MBE Plan.
-64-
<PAGE>
Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times
---------
shall not create, permit or suffer to exist any mortgage, encumbrance, lien,
security interest, claim or charge against the Construction Site, other than
those portions of the Construction Site, if any, that constitute a part of the
Premises (in which case, the creation of, or the permission or sufferance to
exist of, any mortgage encumbrance, lien, security interest, claim or charge
shall be made in accordance with the terms of the Lease).
(b) The Times will cause the Improvements to be constructed free and
clear of liens of mechanics, material persons and suppliers, including public
improvement liens, or claims for any such liens subject to The Times's right
to cause any such lien to be removed or bonded within sixty (60) days after
the placement of such lien. The costs of removing or bonding such lien shall
be paid by The Times except if such lien was placed solely as a result of
EDC's failure to disburse to The Times the Funding in accordance with this
Agreement, in which case EDC shall pay for the costs of removing or bonding
such lien.
Sec.6.13 Intentionally omitted.
Sec.6.14 Intentionally omitted.
Sec.6.15 Intentionally omitted.
Sec.6.16 MacBride Principles. The Times hereby agrees that with respect
--------------------
to any Construction Contract entered into for the performance of the Work, The
Times shall (i)
-65-
<PAGE>
include in such Construction Contract the requirements of the MacBride
Principles Rider, attached hereto as Appendix J, and shall (ii) require its
Contractors (A) to comply with applicable covenants and representations set
forth in Appendix J, and (B) to cause its contractors, subcontractors, and
materials suppliers performing the Work to also comply with the requirements
of Appendix J. Notwithstanding anything to the contrary contained herein, the
provisions of this Sec.6.16 shall not apply to any contractor, subcontractor or
materials supplier with respect to which there is not another contractor,
subcontractor or materials supplier to perform work or supply materials of
comparable quality at a comparable price.
Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion
------------------------
of the Funding to The Times shall not constitute a waiver of EDC's right to
require compliance with any of the covenants contained in this Article Six or
otherwise contained in this Agreement.
-66-
<PAGE>
ARTICLE SEVEN - DEFAULT AND TERMINATION
---------------------------------------
Sec.7.1 Events of Default. An "Event of Default" shall exist if any of
------------------
the following shall have occurred:
(a) if The Times shall have applied the Funding in violation of the
covenant set forth in Sec.6.9 and such misapplication was not corrected within
ten (10) Business Days after receipt of written notice thereof; or
(b) if The Times fails to duly observe or perform any of the material
covenants and agreements contained in this Agreement (other than the covenants
contained in Sec.6.9) and if such failure continues for twenty (20) Business
Days after receipt of written notice to The Times by EDC specifying with
particularity such material default and requiring such material default to be
remedied; provided, however, that if because of Unavoidable Delays or if the
nature of the default is such that The Times cannot reasonably be expected to
cure the same within such period, then such material default shall not be an
Event of Default if, within such period (subject to Unavoidable Delays), The
Times commences in good faith to cure such material default and (subject to
Unavoidable Delays) diligently prosecutes such cure to completion; or
(c) if an "Event of Default" (as defined in the Lease) has occurred
under the Lease and EDC has taken action to terminate the Lease in accordance
with the terms thereof; or
(d) if there is any cessation of the Construction Work for any period
in excess of ninety (90) successive calendar days after the date upon which
the Construction Work shall
-67-
<PAGE>
commence, unless the cessation of the Construction Work shall have been caused
by Unavoidable Delays and construction or construction-related activities
shall have resumed promptly after the cause of the Unavoidable Delay shall
have been removed and shall be diligently pursued (it being understood that
during any such cessation of the Construction Work, EDC shall have the right,
upon three (3) days prior written notice to The Times, to enter upon the
Construction Site for the purpose of protecting the Construction Site against
deterioration, loss, damage or theft if the Contractor or Contractors
required, pursuant to its respective Construction Contract(s), to provide such
services has ceased providing the services); or
(e) if any representation or warranty by The Times contained in this
Agreement shall be materially false when made or reaffirmed and such
materially false representation or warranty materially adversely affects The
Times's ability to enter into this Agreement and perform the Work in
accordance with the terms hereof.
Sec.7.2 Default Remedies; Exculpation.
------------------------------
(a) Upon an Event of Default, EDC may exercise any right or remedy
permitted to it by law, in equity, or under this Agreement, including, without
limitation, the right to obtain restitution of any portion of the Funding
which is applied by The Times, The Times's employees, agents or contractors in
violation of Sec.6.9, with interest from the date of EDC's disbursement at the
Late Charge Rate. Without limiting the generality of the foregoing, upon an
Event of Default, EDC shall have the right to elect to terminate this
Agreement
-68-
<PAGE>
(reserving, however, all remedies provided in this Article Seven or existing
otherwise) or to make no further disbursements until such default is remedied
or determined not to be an Event of Default.
(b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof, the
liability of The Times and its Affiliates under this Agreement for damages or
otherwise shall be limited to (i) any sums advanced hereunder to The Times but
not heretofore expended by it, (ii) the proceeds (to the extent actually
received by The Times) of any insurance policies covering or relating to the
Work or the Construction Site, (iii) the obligations of The Times set forth in
Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the period
prior to their assignment to EDC. In no event shall EDC look to the property
or assets of any of the individuals who are the directors, officers,
employees, shareholders, agents or servants of The Times, and no property or
assets of any of the aforesaid Persons shall be subject to levy, execution or
other enforcement procedure for the satisfaction of The Times's obligations
under this Agreement, except in the event such individual has misapplied the
Funding as described in Sec.7.2(c) below and then only to the extent of the
actual dollar amount that such individual has misapplied the Funding;
provided, however, that if such misapplication was the result of such
individual's fraudulent conduct, such individual's liability shall be as set
forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no
event shall The Times Indemnitees be liable for consequential damages under
this Agreement.
(c)(i) Each of the individuals described in Sec.7.2(b) above shall be
personally liable (as distinguished from collective liability), to the full
extent provided by law, in equity, and
-69-
<PAGE>
by this Agreement if any such relevant individual shall have applied the
Funding in violation of the covenant contained in Sec.6.9 of this Agreement and
such misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct, in which case such liability shall not be limited as
provided above.
(ii) The Times shall be liable to the full extent provided by law, in
equity, and by this Agreement if The Times shall have applied the Funding in
violation of the covenant contained in Sec.6.9 of this Agreement and such
misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct on the part of The Times as opposed to the fraudulent
conduct of an individual not authorized by The Times to act in such a manner,
in which case such liability shall not be limited as provided above.
(d) No course of dealing on the part of EDC or any failure on the part
of EDC to exercise any right shall operate as a waiver of such right or
otherwise prejudice EDC's remedies. No right or remedy conferred upon or
reserved to EDC is intended to be exclusive of any other right or remedy.
Every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy contained in this Agreement or
existing at any time at law or in equity, or otherwise, and may be exercised
from time to time and as often and in such order as EDC may deem appropriate.
-70-
<PAGE>
The exercise of any right or remedy shall not be construed as an election or a
waiver of any other right or remedy. No delay or omission of EDC in
exercising any right or remedy occurring upon an Event of Default shall impair
any such right or remedy or constitute a waiver of or acquiescence in such
Event of Default.
(e) The provisions of this Sec.7.2 shall survive the expiration or
termination of the Term.
Sec.7.3 Termination. If, upon the occurrence of an Event of Default
------------
described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this
Agreement, or for any other reason provided for under this Agreement, this
Agreement is terminated, EDC agrees that, provided that the Lease remains in
full force and effect and no "Event of Default" (as defined in the Lease)
shall have occurred and be continuing thereunder, EDC shall undertake the
construction of the Sanitary Sewer System in accordance with the Final Plans
and Specifications with such reasonable changes therein as EDC may from time
to time and in its reasonable discretion, deem appropriate; provided that, in
no event shall such changes diminish the ability of the Sanitary Sewer System
to adequately serve the Premises and the Project, and further provided that in
no event shall such discretionary changes (i.e. changes which are not required
by the Requirements, field conditions or other unexpected conditions, or are
not necessitated by reason of The Times's default under this Agreement) cause
"Substantial Completion" (as such term is defined in the Lease) of the Project
to be delayed by virtue of the inability to hook up the Project to the
Sanitary Sewer System. In such circumstances, EDC shall have the right (but
shall not be obligated) to assume any
-71-
<PAGE>
Construction Contract made by or on behalf of The Times in any way relating to
the Work and to take over and use all or any part or parts of the labor,
materials, supplies and equipment contracted for, by, or on behalf of The
Times, whether or not previously incorporated into the Construction Site, all
in EDC's discretion. To effectuate the provisions of this paragraph, The
Times hereby collaterally assigns to EDC all such Construction Contracts,
whether presently existing or made in the future, as more particularly set
forth in Sec.4.1(d) hereof, and, if EDC exercises its rights under such
collateral assignment, EDC shall assume all of the obligations and liabilities
of The Times under such Construction Contracts. In connection with any
demolition or construction undertaken by EDC pursuant to the provisions of
this Sec.7.3, EDC may (i) engage builders, contractors, architects, engineers
and others for the purpose of furnishing labor, materials and equipment, (ii)
reasonably pay, settle or compromise all bills or claims which may become
liens against the Construction Site, or which have been or may be properly
incurred, or for the discharge of liens, encumbrances or defects in the title
of the Construction Site, and (iii) take such other reasonable action
(including the employment of watchmen) to protect the Construction Site. Any
costs incurred by EDC in connection with the performance of the above-
described work which are in excess of the amount of the Funding and which are
necessitated as a result of the earlier termination of this Agreement by
reason of The Times's default or The Times's failure to perform its
obligations with respect to the construction of the Improvements in accordance
with this Agreement and the Final Plans and Specifications shall be paid by
The Times. The provisions of this Sec.7.3 shall survive the expiration or
termination of the Term.
-72-
<PAGE>
Sec.7.4 Right to Reinstate Agreement. If, after termination of this
-------------------------------
Agreement (the "Initial Termination"), EDC fails, in accordance with Sec.7.3
above, to either (i) commence the construction of the Sanitary Sewer System,
or (ii) if The Times had already commenced the construction of the Sanitary
Sewer System pursuant to the terms of this Agreement but such construction was
stopped as a result of the termination of this Agreement, recommence the
construction of the Sanitary Sewer System, in either case within six (6)
months after the Initial Termination, then provided that The Times shall have
given EDC thirty (30) days prior written notice and an opportunity to cure,
The Times shall have the right to elect to reinstate this Agreement and
construct the Sanitary Sewer System in accordance with the terms hereof;
provided, however, that any costs incurred by The Times in excess of the
amount of funds allocated by the City and EDC for the Funding at the time of
the termination of this Agreement shall be paid at the sole cost and expense
of The Times without any right of reimbursement under this Agreement or any
other agreement of The Times with EDC or the City if and to the extent that
such excess amounts are incurred by reason of The Times's default or The
Times's failure to perform its obligations with respect to the construction of
the Improvements in accordance with the Final Plans and Specifications
(including, without limitation, construction delays). Upon reinstatement of
this Agreement in accordance with this Sec.7.4, all terms and provisions of this
Agreement shall be in full force in effect, including without limitation, the
provisions of this Article 7 with respect to EDC's right to terminate this
Agreement upon the occurrence of a further Event of Default. The provisions
of this Sec.7.4 shall survive the Initial Termination but shall not survive any
further or subsequent termination.
-73-
<PAGE>
ARTICLE EIGHT - NOTICES
-----------------------
Sec.8.1 Notices. All notices under this Agreement shall be in writing and
--------
shall be deemed to have been sufficiently given or served for all purposes as
of the date when sent by hand, or by a national overnight courier service, or
by certified or registered mail, return receipt requested, and addressed as
follows (or to such other addresses as may from time to time be designated by
EDC or The Times by notice delivered to the other in accordance with this
Sec.8.1):
(i) if to EDC:
New York City Economic Development Corporation
110 William Street
New York, N.Y. 10038
Attention: President
with a copy via ordinary mail to General Counsel, at the
same address
and to:
New York City Law Department
100 Church Street
New York, New York 10007
Attention: Chief, Economic Development Division;
(ii) if to The Times:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Solomon B. Watson, IV, Esq.
General Counsel
-74-
<PAGE>
with a copy via ordinary mail to David Thurm, Executive
Director of Project Development, at the same address, and
with a copy in the same manner sent to The Times to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin Polevoy, Esq.
Sec.8.2 Disbursement Submissions. All Requisitions and other submissions
-------------------------
for disbursements required to be made pursuant to Article Four of this
Agreement shall be addressed as directed in Sec.4.3 hereof.
-75-
<PAGE>
ARTICLE NINE - GENERAL CONDITIONS
---------------------------------
AND COVENANTS
-------------
The following terms, covenants and conditions shall be applicable
throughout the Term:
Sec.9.1 Conflict of Interests. No member, officer, director or employee
----------------------
of EDC or the City, or their designees, consultants or agents; no member of
the governing body of the City and no public official of the City who
exercises or exercised any functions or responsibilities with respect to the
subject matter of this Agreement during his/her tenure, if known to The Times,
shall have any interest, direct or indirect, in any contract or subcontract,
or the proceeds thereof, for work to be performed in connection with the Work
or in any activity or benefit arising out of or in connection with the
performance of the Work. Upon receiving actual notice or knowledge of any of
the circumstances specified in the preceding sentence, The Times shall deliver
notice to EDC of the circumstances and immediately shall use good faith
efforts to cause the Persons affected to terminate their interest in the
prohibited contract or property. The Times shall require the Resident
Engineer, Construction Manager, Owner's Representative or General Contractor
(as the case may be) and the Contractors, subcontractors and materials
suppliers to make appropriate representations in writing that they, their
employees and principals do not have any conflict of interest prohibited under
this Sec.9.1, and to covenant to use good faith efforts to cause the
-76-
<PAGE>
prohibited persons to terminate their interest in the relevant contract or
property upon demand by The Times.
Sec.9.2 No Liability of Individuals. No officer, employee, director,
------------------------------
member, agent or other person authorized to act on behalf of EDC or the City
shall have any personal liability in connection with this Agreement or any
default by EDC or the City.
Sec.9.3 Anti-Boycott Provisions.
------------------------
(a) The Times agrees that it is not now participating, nor shall it
participate during the Term, in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder.
(b) Upon the final determination by the United States Department of
Commerce or any other agency of the United States as to conviction of The
Times for participation in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder, EDC may, at its option, declare a default
under this Agreement (which default is subject to cure by The Times in
accordance with the terms of this Agreement).
(c) The Times shall comply in all respects with the provisions of Sec.6-
114 of the Administrative Code of the City and the rules and regulations
issued by the Comptroller of the City thereunder.
-77-
<PAGE>
Sec.9.4 Governing Law. The provisions of this Agreement shall be governed
--------------
and interpreted in accordance with the law of the State of New York.
Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b)
------------------
hereof, EDC shall not be liable for consequential damages under this Agreement
to The Times or to any other Person in any matter arising out of the
construction of the Improvements.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, if EDC defaults in the disbursement of the Funding for which it is
obligated, pursuant to the terms of this Agreement, to disburse to The Times
or in the payment of any other monetary amount owed to The Times pursuant to
the provisions of this Agreement and fails to cure such default within thirty
(30) days after The Times delivers notice (the "EDC Default Notice") to EDC of
such default, or if the moneys in the aggregate sum of approximately $3.6
million, or such other greater or lesser amount as may be necessary to pay for
the costs of the Work and any change order work or other changes to the Final
Plans and Specifications or Construction Contracts approved by EDC, shall not
be made available to EDC by the City, in whole or in part for any reason,
then, provided that The Times proceeds with the construction of the
Improvements, for each dollar of Funding not so disbursed or monetary amount
not so paid by EDC or made available to EDC by the City, The Times shall have
the right to (y) offset against future Rental (other than Impositions) due
under the Lease and against College Point Improvement Fund Payments due under
the Lease in an amount equal to the Funding not so disbursed by EDC, and (z)
offset against
-78-
<PAGE>
Rental (other than Impositions and College Point Improvement Fund Payments)
due under the Lease in an amount equal to any other monetary amount which EDC
is obligated to pay under this Agreement and has not so paid, until such time
as EDC recommences the disbursement of the Funding or pays such other monetary
amount. The Times agrees that the right to an offset against Rental (other
than Impositions) and against College Point Improvement Fund Payments as
hereinabove described is The Times's sole remedy against EDC arising out of
the failure of EDC to receive the Funding from the City and The Times shall
not commence any action or proceeding against EDC as a result of such failure,
except as otherwise provided in this Agreement.
(c) In the event that (i) EDC has defaulted in the performance of any
obligation on EDC's part to perform under this Agreement other than the
disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of
the Funding and continues to be in default thereof after the receipt of the
EDC Default Notice and expiration of the thirty (30) day cure period provided
therein, The Times shall have all of its rights at law and in equity against
EDC.
(d) Except as otherwise provided in this Agreement; (i) no course of
dealing on the part of The Times or any failure on the part of The Times to
exercise any right shall operate as a waiver of such right or otherwise
prejudice The Times's remedies, (ii) no right or remedy conferred upon or
reserved to The Times is intended to be exclusive of any other right or
remedy, (iii) every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy contained in this
Agreement or
-79-
<PAGE>
existing at any time at law or in equity, or otherwise, and may be exercised
from time to time and as often and in such order as The Times may deem
appropriate, and (iv) the exercise of any right or remedy shall not be
construed as an election or a waiver of any other right or remedy. No delay
or omission of The Times in exercising any right or remedy occurring upon
EDC's failure to disburse the Funding in accordance with this Agreement or to
otherwise perform its obligations in accordance with the terms of this
Agreement shall impair any such right or remedy or constitute a waiver of or
acquiescence in any such failure.
Sec.9.6 Amendments. This Agreement may not be amended, waived or
-----------
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the amendment, waiver or termination is sought.
Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be
-----------------------
binding upon and shall inure to the benefit of EDC and The Times and their
respective successors and permitted assigns.
Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1
--------------------
hereof, The Times acknowledges that the City capital budget dollars which form
the Funding are not and shall not be deemed to be an assignment of any funds
received by EDC from the City. The Times confirms that its rights to the
Funding arise exclusively under this Agreement.
-80-
<PAGE>
Sec.9.9 Counterparts. This Agreement may be executed in one or more
-------------
counterparts which, when taken together, shall constitute one and the same
document.
Sec.9.10 Interpretation. The provisions of the Lease incorporated by
---------------
reference into this Agreement are intended to supplement the other provisions
of this Agreement. In the event of any conflict between the Lease provisions
and the other provisions of this Agreement, the provisions of the Lease shall
control.
Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their
----------
respective departments, offices, officers, members, directors, employees and
agents shall collectively be referred to as "the Public Parties". The Times
shall defend, indemnify and hold harmless the Public Parties, from and
against any and all claims, damages (including consequential damages
awarded to third parties against the Public Parties), judgments,
liabilities and causes of action whatsoever to which they may be
subject arising out of the acts or omissions of The Times, its
Contractors, subcontractors, agents, employees or material suppliers, and any
and all Persons, in connection with the performance of the Work, or because of
any negligence, fault or default of The Times, its agents, employees, material
suppliers or subcontractors. The obligation of The Times to indemnify and
hold harmless the Public Parties shall include but not be limited to the
payment of any and all costs and reasonable legal fees as may be actually
incurred by the Public Parties. Nothing contained herein is intended to
create an obligation on The Times to defend, indemnify and hold
-81-
<PAGE>
harmless the Public Parties against those claims, damages, judgments,
liabilities and causes of action described in Sec.1.1(c)(5) hereof for
which it is determined that EDC or the City or their respective
employees, agents or consultants are responsible for. The termination
of this Agreement shall not release The Times from any liability
to the Public Parties arising out of any act or omission of The
Times in connection with this Agreement.
(b) EDC shall indemnify and hold harmless The Times Indemnitees from
and against any and all claims, damages (including consequential damages
awarded to third parties against The Times Indemnitees), judgments,
liabilities and causes of action whatsoever to which they may be subject to
the extent caused as a result of the negligence or misconduct of EDC or its
agents or professional consultants arising out of or in connection with EDC's
or its agents' or professional consultants' inspections of the Construction
Site or uncovering of work in accordance with Sec.1.1(e) hereof. The obligation
of EDC to indemnify and hold harmless The Times Indemnitees pursuant to this
Sec.9.11(b) shall include, but not be limited to, the payment of any and all
costs and reasonable legal fees as may be actually incurred by The Times
Indemnitees in connection with any such claim, damage, judgment, liability or
causes of action. The termination of this Agreement shall not release EDC
from any liability to The Times Indemnitees described in this Sec.9.11(b).
-82-
<PAGE>
Sec.9.12 No Agency. Neither The Times nor any of its employees,
-----------
Contractors or subcontractors is, shall be or shall represent that he, she or
it is an agent, servant or employee of EDC or the City by virtue of this
Agreement or by virtue of any approval, permit, license, grant, right or
authorization given by the EDC or the City or any of their officers, agents or
employees. The Times shall be solely responsible for the work, direction,
compensation and personal conduct of its officers, agents, employees and
subcontractors.
Sec.9.13 Venue
-----
(a) Any and all claims asserted by or against EDC or by or against The
Times arising under this Agreement or related hereto shall be heard and
determined either in the courts of the United States ("Federal Courts")
located in the City or in the courts of the State of New York ("New York State
Courts") located in the City of New York. To effect this agreement and
intent, EDC and The Times agree and, where appropriate, shall require each
Contractor to agree, as follows:
(i) If either Party initiates any action against the other
Party in Federal Court or in New York State Court, service of
process may be made on The Times either in person, or by
registered or certified mail (return receipt requested) addressed
to the office of the General Counsel of The Times at the
address set forth in Article Eight of this Agreement, or
to such other address as The Times may provide to EDC in
writing, and service of process may be made on EDC, either
in person or by registered or certified
-83-
<PAGE>
mail (return receipt requested) addressed to EDC at its address as
set forth in Article Eight of this Agreement, or to such other
address as EDC may provide to The Times in writing.
(ii) With respect to any action between EDC and The Times
in New York State Court, each Party hereby expressly waives and
relinquishes any rights it might otherwise have (A) to move to
dismiss on grounds of forum non conveniens, (B) to remove to
----- --- -----------
Federal Court wholly outside New York City, and (C) to move for a
change of venue to New York State Court outside New York City.
(iii) With respect to any action between EDC and The Times
in Federal Court located in New York City, each Party expressly
waives and relinquishes any right it might otherwise have to move
to transfer the action to a Federal Court outside the City of New
York.
(iv) If either Party commences any action against the other
Party in a court located other than in the City and State of New
York, then, upon request of the Party against whom the action is
brought, the Party bringing the action shall either consent to a
transfer of the action to a court of competent jurisdiction
located in the City and State of New York or, if the court where
the action is initially brought will not or cannot transfer the
action, then to dismiss such action without prejudice, and may
thereafter reinstitute the action in a court of competent
jurisdiction in New York City.
-84-
<PAGE>
Sec.9.14. Investigations; Cooperation.
----------------------------
(a) Definitions. As used in this Sec.9.14:
(i) "Investigation" shall mean any investigation, audit or
inquiry conducted by the Department of Investigation with respect
to the obtaining and/or performance of the Transaction Documents
or any of them,
(ii) "Department of Investigation" shall mean the Department of
Investigation of the City or any City department or agency
succeeding to the functions thereof,
(iii) "Commissioner" shall mean the Commissioner or Acting
Commissioner of the Department of Investigation,
(iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and
Economic Development of the City (or the officer of the City
succeeding to the functions of that office),
(v) "Entity" shall mean any firm, partnership, corporation,
association or Person that receives monies, benefits, licenses,
leases or permits from or through the City or otherwise transacts
business with EDC or the City,
(vi) "Member" shall mean any Person associated with another
Person or entity as a partner, director, officer, principal or
employee, and
(vi) "Transaction Documents" shall mean the Lease, this
Agreement, Funding Agreement #1, Funding Agreement #3 and Funding
Agreement #4.
(b) Cooperation with Investigations. Subject to the exclusions set
---------------------------------
forth in
-85-
<PAGE>
paragraph (c) of this Sec.9.14, The Times shall during the term of this
Agreement:
(i) cooperate fully and faithfully, and utilize good faith
efforts to cause its Members to cooperate fully and
faithfully, with any Investigation; and
(ii) report, and utilize its good faith efforts to cause its
Members to report, in writing to the Commissioner, any
solicitation of which The Times has actual knowledge of
money, goods, requests for future employment or other
benefit or thing of value, by or on behalf of any employee
of the City or any other Person, for any purpose relating to
the procurement or obtaining and/or performance of any
Transaction Document by The Times.
(c) Exclusions. The provisions of Sec.9.14(b) above shall not apply:
-----------
(i) to any information or document known, prepared or obtained
by The Times or its Members (and the sources of such
information or documents), that is protected from compelled
disclosure by any present or future "Shield Law" or any
other statute, constitutional provision, rule, regulation or
case law related to the rights of reporters and/or news
organizations;
(ii) to any Person who refuses to testify based on his or her
privilege against self-incrimination after having been given
assurances that his or her statement, and any information
from such statement, will not be used against such Person in
any subsequent criminal proceeding in any
-86-
<PAGE>
forum (provided, however, that any Person given such
assurances shall have the right to have the legal
sufficiency of such assurances adjudicated by a court of
competent jurisdiction as a precondition of the
applicability of Sec.9.14(b) to such Person); and
(iii) to any construction contract or other agreement (or the
obtaining or performance thereof) with parties other than
the City or EDC, including without limitation, any contract
or agreement being funded through any Transaction Document.
(d) Hearing. If The Times or any Member of The Times refuses to
--------
testify in an Investigation and, in connection with such failure to testify,
the Commissioner determines that The Times has failed to cooperate in the
Investigation in violation of the provisions of Sec.9.14(b) hereof, then the
Commissioner may request the Deputy Mayor to convene a hearing (the
"Hearing"), upon not less than five (5) days written notice to The Times, to
determine if any penalties should be imposed for The Times's failure to so
cooperate in accordance with this Sec.9.14.
(e) Adjournments of Hearing
-----------------------
(i) The Times shall have the right to require that the Hearing
be adjourned for a period of not more than thirty (30) days.
(ii) The Deputy Mayor may grant other adjournments of the
Hearing, in the exercise of his or her reasonable
discretion; provided however, that in the case of an
adjournment occasioned by The Times's failure to
-87-
<PAGE>
appear, the Deputy Mayor may, if he or she determines that
there was no reasonable cause for the requested adjournment
or failure to appear, impose an Interim Penalty.
(iii) The City shall not incur any penalty or damages for delay or
otherwise occasioned by an adjournment of the Hearing.
(f) Penalties.
----------
(i) The Deputy Mayor may impose a penalty during an adjournment
due to The Times's failure to appear or proceed with the
scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim
Penalty") of not more than $1,000 per day for each day of
such adjournment, provided, however, that such daily
penalties shall cease to accrue from and after the date that
The Times makes itself available to appear at or proceed
with the scheduled Hearing or gives written notice to the
Deputy Mayor that it does not intend to appear at or proceed
with the scheduled Hearing, in which event the Deputy Mayor
shall have the right to continue the Hearing and reach a
determination without The Times's participation.
(ii) If, after the Hearing, the Deputy Mayor determines that The
Times failed to cooperate in the Investigation in violation
of this Sec.9.14, and The Times fails to commence to cooperate
fully in such Investigation within five (5) Business Days
following its receipt of written notice of
-88-
<PAGE>
such determination, the Deputy Mayor may:
(A) impose a penalty ("Final Penalty") which may not, in
conjunction with any Interim Penalty or Final Penalty
imposed during the term of this Agreement under this
Agreement and/or during the term of the Lease with
respect to any other Transaction Document, exceed
$500,000 in the aggregate during the term of the
Lease; and/or
(B) disqualify The Times, for a period not to exceed five
(5) years, from submitting bids for, or transacting
business with, or entering into or obtaining any
contract, lease, permit or license with or from EDC or
the City, other than as contemplated in the
Transaction Documents.
Notwithstanding anything to the contrary contained herein, in the event
that The Times is found after the Hearing to have failed to cooperate in the
Investigation, but nonetheless is not subjected to a Final Penalty because The
Times commences to cooperate fully in such Investigation within five (5)
Business Days following its receipt of written notice of such determination,
The Times shall be liable for the cost of conducting such Hearing in an amount
not to exceed $5,000.
(g) Criteria for Determination. The Deputy Mayor shall consider and
----------------------------
address in reaching his or her determination and in assessing an appropriate
Interim Penalty, Final Penalty, and/or disqualification, the factors in
clauses (i) and (ii) of this Sec.9.14(g). He or she
-89-
<PAGE>
may also consider, if relevant and appropriate, the criteria established in
clauses (iii) and (iv) of this Sec.9.14(g), in addition to any other information
which may be relevant and appropriate:
(i) The Times's good faith endeavors or lack thereof to cooperate
fully and faithfully with the Investigation, including but not
limited to the discipline, discharge or disassociation of any
Person failing to testify, the production of accurate and complete
books and records, and the forthcoming testimony of all other
Members, agents, assignees or fiduciaries whose testimony is
sought (the Deputy Mayor shall take into account whether the
discipline, discharge or disassociation of any Persons failing to
testify would violate any union or other contract),
(ii) the relationship of the Person who refused to testify to The
Times, including, but not limited to, whether the Person whose
testimony is sought has an ownership interest in The Times and/or
the degree of authority and responsibility the Person has within
The Times,
(iii) The nexus of the testimony sought to The Times and the
Transaction Documents, and/or
(iv) the effect a penalty may have on an unaffiliated and
unrelated party or Entity that has a significant interest in The
Times, provided that (x) such unrelated party or Entity has given
actual notice to the Commissioner or EDC upon the acquisition of
the interest, or (y) at the Hearing such unrelated party
-90-
<PAGE>
or Entity gives notice and proves that such significant interest
was previously acquired; under either circumstance, such unrelated
party or Entity must present evidence at the Hearing demonstrating
the potential adverse impact a penalty will have on such party or
Entity.
(h) Payment of Penalties. Any Interim or Final Penalty hereunder
----------------------
shall, upon imposition thereof, be applied to reduce the aggregate of Offset
Amounts (as such term is defined in the Lease) then available to The times
under Article 4 of the Lease and the balance, if any, shall be paid promptly
as additional Rental, or at the landlord under the Lease's option, such
balance shall be applied to reduce EDC's obligations with respect to any
undisbursed Funding.
(i) Exclusive Remedy. Notwithstanding anything to the contrary
------------------
contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall
be the sole and exclusive remedies available to EDC in the event that The
Times breaches any of its obligations under this Sec.9.14, and no other
remedies, including, without limitation, the remedies set forth elsewhere in
this Agreement for defaults by The Times in the performance of its obligations
under this Agreement, shall be applicable to a breach by The Times of any of
its obligations under this Sec.9.14.
(j) Right to Dispute Determinations of Deputy Mayor. Nothing
-------------------------------------------------------
contained herein shall be construed to limit in any manner whatsoever The
Times's right or ability to challenge or seek to enjoin, overturn, set aside
or modify any action taken, determination made or penalty imposed by the
Deputy Mayor pursuant to the provisions of this Sec.9.14.
-91-
<PAGE>
(k) Concurrent Lease Obligation. The obligations of The Times under
-----------------------------
this Sec.9.14 constitute a portion of the obligations of The Times under Article
40A of the Lease, and nothing contained herein shall be construed as
expanding, enlarging or increasing in any way, or as being separate from or in
addition to, the obligations and liabilities of The Times pursuant to Article
40A of the Lease.
Sec.9.15. Intentionally Omitted.
Sec.9.16 Maximum Interest Rate
---------------------
In the event that any interest payable under this Agreement shall be
deemed to exceed the maximum rate permitted by law, then the amount of
interest to be paid shall be the maximum rate so permitted.
Sec.9.17 Captions
--------
The captions in this Agreement are inserted for convenience of reference
only and in no way define, describe or limit the scope or intent of this
Agreement or any of the provisions hereof.
Sec.9.18 Gender, Etc.
------------
The gender used in this Agreement shall be deemed to refer to the
masculine, feminine, or neuter gender, as the context or the identity of the
persons being referred to
-92-
<PAGE>
may require. The singular shall include the plural and vice versa as the
context may dictate.
Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without
------------------
the prior written consent of The Times, except that EDC shall have the right,
upon ten (10) Business Days prior written notice, to assign this Agreement
and/or EDC's rights under this Agreement, without any further consent on the
part of The Times, to the City.
Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees
-----------------------------------
that all non-monetary obligations set forth in this Agreement as being
obligations of The Times shall apply only to, and be performed by, The New
York Times Newspaper Division of The New York Times Company (the "Newspaper
Division") and its employees and agents, and EDC shall look solely to the
Newspaper Division for the performance of such non-monetary obligations;
provided, however, that any default by the Newspaper Division in the
performance of such non-monetary obligations shall be treated with the same
force and effect pursuant to the applicable provisions of this Agreement as if
such default had been committed by The Times.
-93-
<PAGE>
ARTICLE TEN - AGREEMENT OF THE CITY
-----------------------------------
Sec.10.1 City's Agreement to Fund EDC. The City, by executing this
--------------------------------
Agreement as it effects this Article Ten only, (i) acknowledges that it is
becoming a signatory to this Agreement as a material inducement to The Times
to enter into this Agreement, (ii) warrants and represents that the
Consolidated Contract is in full force and effect and legally binding upon the
City; and (iii) covenants and agrees to provide EDC with City capital budget
funds in such amounts and at such times as will permit EDC to comply with its
obligations to disburse the Funding pursuant to the provisions of this
Agreement, without regard to whether the Consolidated Contract is then in full
force and effect or whether EDC is in compliance with the terms thereof.
Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation
----------------------------
Counsel (addressed to The Times) providing that this Agreement is legal, valid
and binding upon the City with respect to the provisions of this Article Ten
in the form attached hereto as Appendix K, is being delivered to The Times
concurrently herewith.
Sec.10.3 The Times's Rights Against the City. In the event that the City
-------------------------------------
has defaulted in the performance of any obligation of the City pursuant to
this Article Ten and continues to be in default thereof after notice from The
Times and a thirty (30) day period to cure, The Times shall have all of its
rights at law and in equity against the City.
-94-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By: /s/ Carl Weisbrod
-------------------------------------
Title: President
THE NEW YORK TIMES COMPANY
By: /s/ Katharine P. Darrow
--------------------------------------
Title: Senior Vice President
THE CITY, BY SIGNING IN THE
PLACE PROVIDED BELOW,
AGREES TO BE BOUND BY THE
PROVISIONS OF ARTICLE TEN HEREOF:
THE CITY OF NEW YORK
By: /s/ Barry F. Sullivan
--------------------------
APPROVED AS TO FORM:
By: /s/
---------------------------
Acting Corporation Counsel
-95-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came
Carl Weisbard, to me known, who, being by me duly sworn, did depose
and say that he resides at c/o 110 William St., NY, NY; that he is
the Pres. of New York City Economic Development Corporation, the
corporation described in and which executed the foregoing instrument; and that
he signed his name thereto by authority of the board of directors of
such corporation.
/s/ Concetta Miele
----------------------------
Notary Public
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came
Katharine P. Darrow, to me known, who, being by me duly sworn, did depose
and say that s/he resides at 16 Garden Place Brooklyn, NY; that s/he is
the Senior V.P. of The New York Times Company, the corporation described
in and which executed the foregoing instrument; and that s/he signed her/his
name thereto by authority of the board of directors of such corporation on
behalf of such corporation.
/s/ Beverly Sturr
-------------------------
Notary Public
-96-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993, before me personally came
Barry Sullivan, to me known, who, being by me duly sworn, did depose
and say that he resides at c/o City Hall, NY, NY; that s/he is
the Deputy Mayor of The City of New York, the same person who executed the
foregoing instrument; and that he acknowledged that he signed his name
thereto on behalf of The City of New York and pursuant to the authority vsted
in him.
/s/ CONCETTA MIELE
------------------------
Notary Public
-97-
FUNDING AGREEMENT #3
between
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION
and
THE NEW YORK TIMES COMPANY
Dated as of December 15, 1993
Relative to the construction of
an interim New York City Police Department
vehicle pound at the South Brooklyn
Marine Terminal in the Borough of Brooklyn
or another site in the City of New York selected by EDC
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
DEFINITIONS 4
ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT
- ----------- AND CONTRACT REQUIREMENTS
Sec.1.1 General Provisions and Provisions Regarding
Design and Construction 16
Sec.1.2 Procurement of Bids, Services and Goods 24
Sec.1.3 Liaison to EDC 33
ARTICLE TWO THE FUNDING
- -----------
Sec.2.1 Agreement to Fund 34
Sec.2.2 Disbursements 34
Sec.2.3 Funding of Costs of Changes 37
ARTICLE THREE THE TERM
- -------------
Sec.3.1 Term 42
ARTICLE FOUR CONDITIONS FOR DISBURSEMENT
- ------------
Sec.4.1 Initial Submissions by The Times 44
Sec.4.2 Documentation for Disbursements on Account
of Eligible Costs 45
Sec.4.3 Direction of Submissions 48
ARTICLE FIVE REPRESENTATIONS, WARRANTIES AND
- ------------ GUARANTIES OF THE TIMES
Sec.5.1 Organization; Standing 49
Sec.5.2 Intentionally Omitted 49
-i-
<PAGE>
Page
Sec.5.3 Conflict, etc. under Other Documents 49
Sec.5.4 No Litigation 50
Sec.5.5 Intentionally Omitted 50
Sec.5.6 Intentionally Omitted 50
Sec.5.7 Quality of Work; Guaranties and Warranties 50
ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC
- --------------
Sec.5A.1 Organization; Standing 52
Sec.5A.2 Due Authorization; Enforceable Obligations 52
ARTICLE SIX COVENANTS
- -----------
Sec.6.1 Requisitions Update The Time's Representations 53
Sec.6.2 Compliance with Other Agreements and Law;
Legal Status 53
Sec.6.3 Maintenance of and Compliance with Insurance
Requirements 53
Sec.6.4 Maintenance of Office 54
Sec.6.5 Compliance with Applicable Law 54
Sec.6.6 Assignment 55
Sec.6.7 Maintenance of Records 56
Sec.6.8 Intentionally Omitted 56
Sec.6.9 Due Application of Funding Proceeds 56
Sec.6.10 Defects; Non-Conforming Work 57
Sec.6.11 Participation by Women and Minority Owned
Businesses 57
Sec.6.12 No Liens 60
Sec.6.13 Intentionally Omitted 60
Sec.6.14 Intentionally Omitted 60
Sec.6.15 Intentionally Omitted 60
Sec.6.16 MacBride Principles 60
Sec.6.17 No Waiver of Compliance 61
-ii-
<PAGE>
Page
ARTICLE SEVEN DEFAULT AND TERMINATION
- -------------
Sec.7.1 Events of Default 62
Sec.7.2 Default Remedies; Exculpation 63
Sec.7.3 Termination 66
Sec.7.4 Right to Reinstate Agreement 67
ARTICLE EIGHT NOTICES
- -------------
Sec.8.1 Notice 69
Sec.8.2 Disbursement Submissions 70
ARTICLE NINE GENERAL CONDITIONS AND COVENANTS
- ------------
Sec.9.1 Conflict of Interests 71
Sec.9.2 No Liability of Individuals 72
Sec.9.3 Anti-Boycott Provisions 72
Sec.9.4 Governing Law 73
Sec.9.5 Liability of EDC 73
Sec.9.6 Amendments 75
Sec.9.7 Successors and Assigns 75
Sec.9.8 Assignment of Funds 75
Sec.9.9 Counterparts 76
Sec.9.10 Interpretation 76
Sec.9.11 Indemnity 76
Sec.9.12 No Agency 77
Sec.9.13 Venue 78
Sec.9.14 Investigations; Cooperation 79
Sec.9.15 Intentionally Omitted 87
Sec.9.16 Maximum Interest Rate 87
Sec.9.17 Captions 87
Sec.9.18 Gender, Etc. 87
Sec.9.19 Assignment by EDC 87
Sec.9.20 Obligations of Newspaper Division 88
-iii-
<PAGE>
Page
ARTICLE TEN AGREEMENT OF THE CITY
- -----------
Sec.10.1 City's Agreement to Fund EDC 89
Sec.10.2 Valid Agreement of the City 89
Sec.10.3 The Times's Rights Against the City 89
Appendix A - Premises
Appendix B - Proposed Site for Interim Car Pound at South
Brooklyn Marine Terminal
Appendix C - Insurance Requirements
Appendix D - The Times's Certificate of Good Standing
Appendix E - EDC's Legal Opinion
Appendix F - EDC's Secretary's Certificate
Appendix G - Equal Employment Requirements
Appendix H - Employment Report
Appendix I - Intentionally Omitted
Appendix J - MacBride Principles Rider
Appendix K - Corporation Counsel's Legal Opinion
Exhibit A - Intentionally Omitted
Exhibit B - Form List of Contractors
Exhibit C - Investigation Forms
Exhibit D - Change Order Form
Exhibit E - Form Legal Opinion
Exhibit F - Form Certificate of Specimen Signature
Exhibit G - AIA Forms
Exhibit H - W\MBE Plan
Exhibit H-1 - Form Expedited Certification Affidavit
Exhibit I - Form Certification to be Attached to Requisition
-iv-
<PAGE>
FUNDING AGREEMENT #3 dated as of December 15, 1993 between NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation
formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the
State of New York, having its principal office at 110 William Street, New
York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York
State corporation, having its principal office at 229 West 43rd Street, New
York, New York 10036.
PREAMBLE:
WITNESSETH
----------
WHEREAS:
A: The City of New York (the "City"), a municipal corporation of the
State of New York, is the owner in fee of certain real property identified, as
of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block
4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot
1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44,
Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot
32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76,
Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th
Street and 139th Street, on the Tax Map for the Borough of Queens, in the
County of Queens, City and State of New York, and assigned new tentative tax
block and lot numbers Block 4282, Lot 100 for future identification, as such
property is more particularly described in Appendix A attached hereto and made
a part hereof (the "Premises); and
-1-
<PAGE>
B: The City, as landlord, and EDC, as tenant, entered into a lease
dated as of the date hereof, which lease was assigned by EDC to The Times
pursuant to an Assignment and Assumption of Lease with Consent dated as of
the date hereof (the lease as so assigned, and as the same may hereafter be
amended, is hereinafter referred to as the "Lease"), demising the Premises for
the Project (as hereinafter defined), and for which Lease EDC will act as the
City's managing agent pursuant to Article 42 of the Lease; and
C: In connection with the Lease, The Times has the option to
construct on behalf of the City a New York City Police Department vehicle
pound designed by EDC (the "Interim Car Pound"), to be located on a portion of
the South Brooklyn Marine Terminal in the Borough of Brooklyn more
particularly depicted in Appendix B attached hereto, or such other site in the
City of New York as may be identified by EDC pursuant to Article 12 of the
Lease (any such site, the "Construction Site"), to temporarily replace the
existing New York City Police Department vehicle pound located on the Premises
until a permanent relocation vehicle pound can be constructed by the City (the
Interim Car Pound, is sometimes hereinafter referred to as the
"Improvements"); and
D: The construction of the Improvements is a necessary prerequisite
element to the Project without which The Times has determined it could not
proceed with the construction of the Project; and
E: If The Times elects to construct the Improvements in accordance
with its option, EDC and the City will make available to The Times funds
sufficient to fully reimburse The Times for its construction of the
Improvements and the performance of the
-2-
<PAGE>
Work (as hereinafter defined); and
F: The City and EDC have entered into an Amended and Restated
Contract dated as of June 30, 1993, as amended (the "Consolidated Contract")
pursuant to which the City will provide EDC with the necessary funds, which is
currently estimated by EDC to be approximately $550,000, for use in connection
with the construction of the Improvements and pursuant to which EDC is
authorized to contract with The Times to perform the Work; and
G: The Times, independently, and not as agent of the City or EDC, has
agreed that if it exercises its option to construct the Improvements it will
perform, or cause the performance of, the Work in consideration of the
payments to it by EDC of funds in an amount necessary to fully reimburse The
Times for the Eligible Costs (as hereinafter defined) incurred in connection
with the construction of the Improvements (the "Funding") pursuant to this
Agreement;
H: In furtherance of its obligations under the Consolidated Contract
and its corporate purpose of fostering economic development in the City, EDC
has agreed to disburse the Funding to The Times for the purpose of financing
the Eligible Costs of the Work.
NOW, THEREFORE, EDC and The Times covenant and agree as follows:
-3-
<PAGE>
DEFINITIONS
-----------
As used in this Funding Agreement, the following initially capitalized
terms shall have the respective meanings indicated opposite each of them:
"Affiliate" Any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or
is under common control with, The Times. For purposes
hereof, the term "control" means the possession,
directly or indirectly, of the power to direct or
cause the direction of the management and policies of
The Times through the ownership of voting securities,
by contract, or otherwise. Ownership of or by The
Times includes beneficial ownership effected by
ownership of intermediate entities. An "Affiliate" of
a Person other than The Times shall be determined
using the same standard of control and ownership set
forth herein with respect to The Times. Unless the
context otherwise requires, any reference to an
"Affiliate" in this Agreement shall be deemed to refer
to an Affiliate of The Times.
"Agreement" This Funding Agreement and any amendments thereto.
"Approvals" Contractor's Approvals (as hereinafter defined) and
Owner's Approvals (as hereinafter defined),
collectively.
"Business Day" Any day other than a Saturday, Sunday, legal holiday,
or a day on which banking institutions in New York
City are authorized by law or executive order to
close.
"Car Pound Removal
Date" As defined in Sec.1.1(b)(1).
"Car Pound Self Help
Notice" As defined in Sec.1.1(b)(1).
"City" As defined in Recital A of the Preamble.
-4-
<PAGE>
"College Point
Improvement
Fund Payments" As defined in Section 3.09(b)(iii) of the Lease.
"Commissioner" As defined in Sec.9.14(a).
"Completed Cover
Sheet" As defined in Sec.4.1.
"Consolidated
Contract" As defined in Recital F of the Preamble.
"Construction
Contract" (A) Any agreement executed by The Times and the
Resident Engineer (as hereinafter defined), if any,
with respect to construction management and
supervision services and engineering services, or (B)
any contract between The Times and the General
Contractor (as hereinafter defined), if any, under
which the General Contractor is obligated to perform
the Construction Work; or (C) any contract with a
contractor for performance of all or any part of the
Construction Work, whether entered into by The Times,
the General Contractor, the Resident Engineer or the
Construction Manager (as hereinafter defined).
"Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction
manager selected by The Times, reasonably approved by
EDC, responsible solely for the performance of
construction management services and/or construction
contract administration services and supervision
services relative to the Construction Work.
"CM Costs" The costs paid or payable by The Times to the
Construction Manager for the performance of
construction management and supervision services
relative to the Work, as more particularly set forth
in the proviso to the last sentence of the definition
of Eligible Costs.
"Construction Site" As defined in Recital C of the Preamble.
"Construction
Work" The portion of the Work the costs of which are
considered hard costs of construction under normal
industry standards, excluding
-5-
<PAGE>
the services of the Resident Engineer and the
services of the Construction Manager, if any.
"Contractor" Any contractor under a Construction Contract.
"Contractor's Approvals"As defined in Sec.1.1(c)(3).
"DBS" As defined in Sec.6.11(b).
"Department of
Investigation" As defined in Sec.9.14(a).
"Deputy Mayor" As defined in Sec.9.14(a).
"DLS" The Division of Labor Services of the City's
Department of Business Services, or its successor in
function.
"EDC" As defined in the first paragraph of this Agreement.
"EDC Default Notice" As defined in Sec.9.5(b).
"Eligible
Costs" (i) The costs of the Work paid or payable by The Times
to Contractors (other than the Resident Engineer),
subcontractors, suppliers and material persons for (A)
labor and materials utilized in connection with the
Work, and (B) for labor, services, facilities or
equipment customarily considered as "general
conditions" items which are reasonably required by or
consequent upon the Construction Work, including (x)
all costs of contract bonds and of insurance that may
be required or necessary during the period of and for
performance of the Work, (y) all costs of obtaining
and maintaining the guaranties required by this
Agreement and/or the Final Plans and Specifications
(as hereinafter defined), and (z) all costs of
obtaining and maintaining the security services
required by Sec.1.1(e)(ii) of this Agreement that are
obtained by Contractors and subcontractors (other than
the Resident Engineer) and are included in their
respective contract prices together with those costs
described in (i)(A) above, and (ii) the costs paid or
payable by The Times to the Resident Engineer for the
performance of construction management and supervision
services and/or engineering services, (x) in an amount
not to exceed ten percent (10%) of the Hard Costs (as
hereinafter
-6-
<PAGE>
defined) with respect to all "general conditions"
items and other reimbursable expenses, and (y) in an
amount not to exceed three percent (3%) of the Hard
Costs with respect to the Resident Engineer's fee. In
no event shall Eligible Costs include the costs or
fees paid or payable by The Times to the Construction
Manager; provided, however that if The Times elects to
engage a Construction Manager instead of a Resident
Engineer (and not in addition to a Resident Engineer),
then Eligible Costs shall include the costs paid or
payable by The Times to the Construction Manager for
the performance of construction management and
supervision services, (x) in an amount not to exceed
ten percent (10%) of the Hard Costs (as hereinafter
defined) with respect to all "general conditions"
items and other reimbursable expenses, and (y) in an
amount not to exceed three percent (3%) of the Hard
Costs with respect to the Construction Manager's fee.
"Engineer's Estimate" An engineer's estimate or estimates, prepared by EDC
or its professional consultants with respect to the
construction of the Improvements, of all Eligible
Costs expected to be incurred in connection with such
construction and a projection of the amounts that EDC
expects The Times to requisition over the term of this
Agreement in connection with the Improvements. The
Engineer's Estimate may be amended from time to time
to reflect inflation, change order work or other
changes to the Final Plans and Specifications. The
Engineer's Estimate shall not be construed to limit in
any way the amounts to be paid to The Times in full
reimbursement of the cost to perform the Work pursuant
to the provisions of this Agreement.
"Entity" As defined in Sec.9.14(a).
"Events of
Default" Those events set forth in Sec.7.1.
"Federal Courts" As defined in Sec.9.13.
"Final Acceptance Date" Means the date on which all of the following shall
have occurred: (i) the Resident Engineer or the
Construction Manager shall have certified to EDC that
the Work (including all Substantial Completion Punch
List (as hereinafter defined) items) is complete
(except to an immaterial extent) in accordance with
the Final Plans and Specifications, and the
-7-
<PAGE>
Requirements, and (ii) EDC and/or its professional
consultants shall have inspected the Construction
Site, within thirty (30) days after EDC's receipt from
the Resident Engineer or the Construction Manager of
the certification described in clause (i) above, and
certified, by the later to occur of the expiration of
such thirty (30) day period or five (5) days after
such inspection was completed, to The Times that, in
its opinion, the Improvements are complete (except to
an immaterial extent) in accordance with the Final
Plans and Specifications, which certification shall
not be unreasonably withheld; provided however, that
if EDC and/or its professional consultants shall have
failed to inspect the Construction Site within the
thirty (30) day period described above and to give the
certification within the time period described above,
EDC shall be deemed to have inspected the Construction
Site and certified to The Times that the Improvements
are complete.
"Final
Completion" Means that each of the following shall have occurred:
(A) the Resident Engineer or the Construction
Manager shall have issued to EDC a "Certificate
of Payment", or certified its approval of a
"Certificate of Payment" issued to EDC, in
either case stating that it has examined the
Final Plans and Specifications and, in its best
professional judgment, after diligent inquiry,
and on the basis of its observations and
inspections, the Construction Work has been
completed (except to an immaterial extent) in
accordance with the Final Plans and
Specifications and all Requirements and that the
final payment is due to The Times;
(B) the Reviewing Parties (i) shall have made a
final inspection of the Construction Site upon
receipt of notice from The Times that the Work
is Substantially Completed (as hereinafter
defined) and (ii) shall have certified the Work,
including all items on the Final Punch List, as
being acceptable and complete;
(C) The Times shall have submitted to EDC a final
accounting, containing an affidavit that all
payrolls, bills for materials and equipment, and
other indebtedness connected with the Work for
which The Times may in
-8-
<PAGE>
any way be responsible (other than items, if
any, disputed in good faith by The Times that
are not being paid for by the Funding including,
without limitation, the Construction Manager's
costs and fees), either have been paid or
otherwise satisfied or will be paid
simultaneously with or immediately after the
receipt of the proceeds of any disbursement of
the Funding for which Final Completion is
required;
(D) The Times shall have submitted to EDC receipts,
releases and waivers of liens, or such other
documentation establishing payment or
satisfaction of all obligations arising out of
the Work (other than items, if any, disputed in
good faith by The Times that are not being paid
for by the Funding including, without
limitation, the Construction Manager's costs and
fees), to the extent and in such form as may be
reasonably designated by EDC. If any lien for
any work done by or on behalf of The Times has
attached to the funds forming a part of the
Funding, The Times shall have either removed or
bonded such lien;
(E) The Times shall have delivered to EDC two sets
of the "as-built" drawings for the Improvements,
as the same may have been amended, modified or
supplemented, and such other documentation as
may be required by the Reviewing Parties or as
may be necessary to evidence that the Work was
completed in accordance with the Requirements.
These drawings shall accurately show any
deviations from the Final Plans and
Specifications and the exact locations of any
underground or otherwise concealed utilities and
appurtenances as referenced to permanent surface
improvements; and
(F) receipt by EDC of notification from DLS that all
labor requirements applicable to the Work have
been fulfilled.
"Final Penalty" As defined in Sec.9.14(f)(ii).
"Final Plans and
Specifications" The completed final drawings and plans and
specifications for the construction of the Interim Car
Pound, as developed by EDC and delivered by EDC to The
Times in accordance with
-9-
<PAGE>
Sec.1.1(c)(2) hereof, and as such drawings and
plans and specifications may be modified or
amended from time to time in accordance with
Sec.1.1(c) or Sec.2.3 of this Agreement.
"Final Punch
List" A statement by the Resident Engineer or the
Construction Manager issued after Substantial
Completion, setting forth a description in
reasonable detail of any items to be remedied,
corrected or completed in accordance with the
Final Plans and Specifications or any observable
defects and deficiencies, and any other defects
or deficiencies of which the Resident Engineer
or the Construction Manager has knowledge or of
which the Reviewing Parties shall have observed
and notified The Times or its Contractors, with
respect to the Improvements or at or on the
Construction Site including, but not limited to,
deficiencies due to non-compliance with the
Requirements.
"Funding" As defined in Recital G of the Preamble.
"Funding Agreement #1" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for certain site preparation and foundation
work required in connection with the construction of
the Project, as such agreement may be amended from
time to time.
"Funding Agreement #2" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for the construction of a City sanitary sewer
system to service the Premises, as such agreement may
be amended from time to time.
"Funding Agreement #4" The Funding Agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for certain reconstruction of the Whitestone
Expressway Service Road from 20th Avenue to Linden
Place, a City street running adjacent to the Premises,
as such agreement may be amended from time to time.
"General
Contractor" The Times's general contractor, if any, reasonably
approved by
-10-
<PAGE>
EDC, engaged to perform and manage the
Construction Work.
"Governmental
Authorities" The United States of America, the State of New
York, the City and any agency, department,
legislative body, commission, board, bureau,
instrumentality or political subdivision of any
of the foregoing, now existing or hereafter
created, having legal jurisdiction over the
Improvements or the Construction Site or any
portion thereof or any street, road, avenue,
sidewalk or water comprising a part of or
immediately adjacent to the Construction Site.
"Hard Costs" The aggregate of the costs set forth in clauses
(i)(A) and (i)(B) of the definition of Eligible
Costs.
"Impositions" As defined in Section 3.09(b)(i) of the Lease.
"Improvements" As defined in Recital C of the Preamble.
"Initial Termination" As defined in Sec.7.4.
"Interim Car Pound" As defined in Recital C of the Preamble.
"Interim Penalty" As defined in Sec.9.14(f)(i).
"Investigation" As defined in Sec.9.14(a).
"Investigation Forms" As defined in Sec.1.2(c).
"Late Charge
Rate" The Prime Rate (as hereinafter defined) plus one
percent (1%).
"Lease" As defined in Recital B of the Preamble.
"Lease Execution Date" As defined in Article 1 of the Lease.
"Material Change" A change to the Final Plans and Specifications which
either (i) individually or in the aggregate with all
other changes increases the cost of the Construction
Work by $125,000 or more, (ii) materially changes the
quality or nature of the Construction Work, type of
materials, workmanship or construction means, methods
or techniques, or materially affects the layout or
design of the Improvements, or (iii) is of such a
nature that, in order
-11-
<PAGE>
to perform the work associated with such change, The
Times will be required to obtain additional permits or
approval.
"Members" As defined in Sec.9.14(a).
"MBEs" As defined in Sec.6.11(a).
"New York State
Courts" As defined in Sec.9.13.
"Newspaper Division" As defined in Sec.9.20.
"Owner's Approvals" As defined in Sec.1.1(c)(2).
"Owner's
Representative" Any Person selected by The Times, reasonably
approved by EDC, to act as The Times's
representative at the Construction Site and
responsible for supervision of the Work
performed by the General Contractor and the
other Contractors, subcontractors and material
suppliers.
"Parties" EDC and The Times.
"Person" An individual, corporation, partnership, joint
venture, estate, trust, unincorporated association;
any federal, state, county or municipal government or
any bureau, department or agency thereof; and any
fiduciary acting in such capacity on behalf of any of
the foregoing.
"Premises" As defined in Recital A of the Preamble.
"Prime Rate" The base or prime rate of interest from time to
time charged by Chemical Bank, as such rate is
published by The New York Times newspaper or by
------------------
The Wall Street Journal if such rate is not
------------------------
published by The New York Times at the time in
-------------------
question.
"Project" The construction on the Premises of a facility of no
less than approximately 360,000 square feet for the
printing, production and distribution of newspapers
and, at the sole discretion of The Times, other such
buildings and improvements on the Premises as are
permitted pursuant to the terms and provisions of the
Lease, including without limiting the generality of
the foregoing, the expansion of the printing facility
to a size greater than 360,000 square feet.
-12-
<PAGE>
"Prohibited Person" As defined in Sec.1.1(b)(4).
"Proposed Bidders List" As defined in Sec.1.2(b)(1).
"Public Parties" As defined in Sec.9.11(a).
"Rental" As defined in Article 1 of the Lease.
"Requirements" Any and all laws, rules, regulations, orders,
ordinances, statutes, codes, executive orders,
resolutions and requirements of all Governmental
Authorities currently in force or hereafter adopted
applicable to the Construction Site and/or the Work.
"Requisition" As defined in Sec.4.2(a)(ii).
"Resident Engineer" The professional consultant engaged by EDC to prepare
the Final Plans and Specifications (identified by EDC
in its notice to The Times described in Sec.1.2(b)(4)
hereof), or any other professional engineer,
engineering firm, architectural firm with engineering
expertise, combined practice or association licensed
in the State of New York selected by The Times,
reasonably approved by EDC as to the acceptability of
such Resident Engineer and as to the scope of work
proposed to be performed by such Resident Engineer, to
act as resident engineer on behalf of The Times and to
perform engineering services and/or construction
contract administration and supervision services
relative to the Work. The Resident Engineer, if any,
shall act on behalf of The Times and shall be separate
and apart from any engineer acting on behalf of EDC or
the City for any reason, including, without
limitation, the preparation of the Engineer's
Estimate.
"Resident Engineer
Costs" The costs paid or payable by The Times to the Resident
Engineer for the performance of construction
management and supervision services and engineering
services relative to the Work, as set forth in clause
(ii) of the definition of Eligible Costs.
"Retainage" As defined in Sec.2.2(a)(1).
"Reviewing
Parties" EDC, the City's Department of Business Services, or
their respective designees, including without
limitation, their hired
-13-
<PAGE>
consultants, and any other Governmental Authority with
jurisdiction over the Work, the Improvements or the
Construction Site and responsible for (i) the issuing
of permits or approvals with respect to the
Improvements, or (ii) ensuring compliance with the
Requirements.
"Substantial
Completion" or
"Substantially
Complete(d)" Means that the Work shall have been 95% completed in
accordance with the Final Plans and Specifications and
all Requirements, and the Reviewing Parties are able
to inspect the Work and prepare a Final Punch List.
"Substantial
Completion Date" The date on which the Work shall have been
Substantially Completed.
"Substantial Completion
Punch List" A statement by EDC, issued after inspection of
the Construction Site, setting forth a
description in reasonable detail of any items to
be remedied, corrected or completed in
accordance with the Final Plans and
Specifications or any defects or deficiencies of
which EDC shall have noted with respect to the
Improvements, including but not limited to,
defects or deficiencies due to non-compliance
with the Requirements.
"Term" As defined in Sec.3.1.
"The Times" As defined in the first paragraph of this Agreement.
"The Times Indemnitees" As defined in Sec.1.1(c)(5).
"Transaction Documents" As defined in Sec.9.14(a).
"Unavoidable Delays" Delays caused by (i) strikes, slowdowns, walkouts,
lockouts or other labor troubles, (ii) acts of God,
(iii) catastrophic weather conditions, (iv) inability
to obtain labor or materials due to labor disputes,
(v) court orders enjoining commencement or
continuation of the Work, (vi) enemy action, (vii)
civil commotion, (viii) shortage of fuel, supplies or
labor resulting from governmental declared priorities
in connection with a public emergency, (ix) failure or
defect in the supply of
-14-
<PAGE>
electricity, oil, gas or water to the Construction
Site provided that such failure or defect is not due
to the action or inaction of The Times or its
Contractors or subcontractors (x) fire, (xi) casualty,
(xii) the failure of EDC to disburse the Funding or
any portion thereof in accordance with the provisions
of this Agreement, (xiii) the failure of EDC to obtain
the Owner's Approvals, (xiv) the failure of EDC to
make changes to the Final Plans and Specifications in
accordance with Sec.1.1(c)(4) hereof required by reason
of the Requirements, changes to the Requirements,
field conditions or other unexpected conditions
arising during the course of the Construction Work
that may affect the design of the Improvements, (xv)
defects in the Final Plans and Specifications that
cause the Plans and Specifications to be not in
compliance with the Requirements or incorrect or
inappropriate, (xvi) EDC's unreasonable delay in
granting any approvals required under this Agreement,
or (xvii) other causes not within The Times's control
that is causing a delay in The Times's performance of
its construction obligations hereunder. The Times
shall use its good faith efforts to notify EDC in
writing, stating when such delay commenced, not later
than ten (10) Business Days after The Times has first
received knowledge of the occurrence of any of the
foregoing conditions; provided, however, that The
Times's failure to notify EDC of the occurrence of an
event constituting an Unavoidable Delay shall not
affect the commencement of such delays or otherwise
result in the loss of any benefit or right granted to
The Times under this Agreement.
"WBEs" As defined in Sec.6.11(a).
"W/MBEs" As defined in Sec.6.11(a).
"W/MBE Participation
Dollar Value" As defined in Sec.6.11(c).
"W/MBE Percentage" As defined in Sec.6.11(c).
"W/MBE Plan" As defined in Sec.6.11(a).
"Work" Work undertaken by or on behalf of The Times for the
purpose of constructing the Improvements all in
accordance with this Agreement and the Final Plans and
Specifications.
-15-
<PAGE>
ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND
----------------------------------------------------
CONTRACT REQUIREMENTS
---------------------
Sec.1.1 General Provisions and Provisions Regarding Design and
---------------------------------------------------------------
Construction.
- -------------
(a) The Times's Option to Perform the Work. The Times shall, in its
----------------------------------------
sole discretion, have the right (but not the obligation), subject to such
conditions set forth in paragraph (b) below and other such conditions and
limitations as may be set forth in Article 12 of the Lease, to elect to
construct, on behalf of the City, the Interim Car Pound. If The Times elects
to construct the Interim Car Pound, The Times shall notify EDC of such
election in accordance with the notice provisions set forth in Sec.1.1(b)
hereof, and thereafter The Times shall perform the Work related to such
construction, and EDC shall disburse to The Times the Funding or any portion
thereof allocable to the Work being performed by The Times, on the terms and
conditions contained in this Agreement.
(b) Notice of Election to Proceed. (1) If The Times elects to
exercise its right to construct the Interim Car Pound on behalf of the City in
accordance with Sec.1.1(a) hereof, The Times shall make such election by giving
written notice thereof (the "Car Pound Self Help Notice") to EDC pursuant to
the applicable provisions of the Lease no earlier than the date (the "Car
Pound Removal Date") determined in accordance with Section 12.01 of the Lease
for the removal from the Premises of the existing New York City Police
Department vehicle pound, but in no event later than the first anniversary of
the Car Pound Removal Date; provided, however that, if The Times gives a Car
Pound Self Help Notice within three
-16-
<PAGE>
(3) months before or after the second anniversary of the Lease Execution Date
and if EDC or the City certifies in good faith that completion of construction
of a permanent relocation New York City Police Department vehicle pound and
delivery of possession of the Premises to The Times will not require more than
an additional ninety (90) days from the date of the Car Pound Self-Help
Notice, The Times shall not have the right to construct the Interim Car Pound
unless EDC shall have failed to remove, or caused to be removed, the Car Pound
from the Premises and delivered possession of the Premises to The Times on or
prior to the expiration of such ninety (90) day period. The Car Pound Self
Help Notice shall specify (i) the approximate date on which The Times intends
to commence construction of the Interim Car Pound (taking into consideration
the limitation set forth in the foregoing sentence with respect to the
commencement of such construction), (ii) the Resident Engineer, Construction
Manager or Owner's Representative that The Times intends to select with
respect to the construction of the Interim Car Pound, and (iii) the Person or
Persons on The Times's staff selected by The Times to be responsible for
communicating with EDC regarding the performance and completion of the Work in
connection with the construction of the Interim Car Pound.
(2) Intentionally omitted.
(3) Notwithstanding the foregoing, if The Times notifies EDC in
accordance with Sec.1.1(b) (1) above of its intention to construct the Interim
Car Pound, The Times shall have the right to revoke such election by written
notice to EDC at any time thereafter provided that the Times did not commence,
or cause to be commenced, the
-17-
<PAGE>
Work. If The Times notifies EDC of its revocation of the election in
accordance with the foregoing sentence, then upon EDC's receipt of such
notification of revocation, this Agreement shall terminate and thereafter
neither Party shall have any rights against or obligations to the other Party
by reason of this Agreement except as otherwise specifically set forth in this
Agreement.
(c) Plans and Specifications. (1) EDC shall deliver to The Times
--------------------------
copies of the Final Plans and Specifications for the construction of the
Interim Car Pound within ten (10) days after EDC's receipt from The Times of
the Car Pound Self Help Notice. The Final Plans and Specifications shall be
submitted together with (i) an Engineer's Estimate, as of the date of such
submission, and (ii) all appropriate permits, consents, certificates,
licenses, authorizations and approvals necessary for the construction of the
Improvements generally considered in the construction industry to be the
responsibility of the owner of a construction site to obtain ("Owner's
Approvals"). If necessary, The Times shall assist EDC, at no cost to The
Times, in obtaining such Owner's Approvals.
(2) Intentionally Omitted.
(3) To the extent that EDC has not obtained and assigned to The
Times (or made available to The Times for it's benefit) the following items,
The Times shall obtain, or shall cause its Contractors to obtain, all
appropriate permits, consents, certificates, licenses, authorizations and
approvals necessary for the construction of the Improvements generally
considered in the construction industry to be the responsibility of the
"contractor" of a construction project to obtain (the "Contractor's
Approvals"). If necessary, EDC shall
-18-
<PAGE>
assist The Times or its Contractors in obtaining such Contractor's Approvals.
The cost of obtaining such permits, consents, certificates, licenses,
authorizations and approvals shall be considered Eligible Costs payable with
the Funding if such costs are included in The Times's Contractors' contract
price.
(4) Any changes required to be made to the Final Plans and
Specifications shall be made in accordance with the terms and conditions set
forth in Sec.2.3 hereof; provided, however that any changes required to be made
by reason of the Requirements, changes to the Requirements, field conditions
or other unexpected conditions arising during the course of the Construction
Work that may affect the design or construction of the Improvements shall be
made solely by EDC and/or its professional consultants, at EDC's cost and
expense. The Times shall perform the Construction Work in accordance with all
such changes and any increased cost of the Work associated with any such
changes to the Final Plans and Specifications in accordance with this
Sec.1.1(c)(4) shall be paid as provided in Sec.2.3(d) hereof.
(5) EDC shall indemnify and hold harmless The Times and its
officers, members, directors, employees and agents (collectively, "The Times
Indemnitees") from and against any and all claims, damages, judgments,
liabilities and causes of action whatsoever to which they may be subject
arising out of (i) the negligence or misconduct of EDC, its employees, agents
or consultants in connection with the preparation of the Final Plans and
Specifications and any modification or changes thereto and the obtaining of
the Owner's Approvals, or (ii) the fact that the Final Plans and
Specifications are not in compliance with
-19-
<PAGE>
the Requirements or are incorrect or inappropriate. The obligation of EDC to
indemnify and hold harmless The Times Indemnitees shall include but not be
limited to the payment of any and all costs and reasonable fees (including
reasonable legal fees) as may be actually incurred by The Times Indemnitees as
a direct result of the negligence or misconduct of EDC, its employees, agents
or consultants.
(d) Right to Proceed. The Times may only proceed with the
-------------------
Construction Work if and only if (i) all Approvals necessary for the
construction of the Improvements have been obtained, (ii) certificates, in
form and substance reasonably satisfactory to EDC, evidencing the insurance
policies referred to in Appendix C, naming the City and EDC as additional
insureds, providing not less than thirty (30) days notice of cancellation to
the City and EDC and, if the certificates of insurance described above do not
indicate thereon the receipt of due and payable premiums, proof of payment of
such premiums shall have been obtained and delivered to EDC, and (iii) all
other Requirements have been complied with, it being expressly agreed that The
Times shall bear the entire risk of constructing the Improvements in variance
with the Final Plans and Specifications and that EDC will not be obligated to
disburse any of the Funding before all Approvals have been obtained and all
conditions to disbursement under this Agreement have been satisfied. The fact
that EDC has provided The Times with the Final Plans and Specifications and
the Owner's Approvals, or any other action or failure to act by the Reviewing
Parties, shall in no way constitute a representation that all applicable
Requirements have been complied with or, subject to the provisions of
Sec.1.1(c)(5) hereof, relieve The Times of its obligations to abide by the
terms of this
-20-
<PAGE>
Agreement.
(e) Performance of the Work. (i) The Times covenants and agrees to
cause the Improvements to be constructed in accordance with the requirements
of this Agreement and with the Final Plans and Specifications and all
applicable Requirements. The Times shall obtain all final acceptances from
the appropriate Reviewing Parties as necessary to complete the Improvements.
(ii) At all times during the performance of the Construction
Work, The Times shall maintain, or cause to be maintained, the Construction
Site in a neat and orderly condition and shall protect the Construction Site
against deterioration, loss, damage or theft.
(f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof,
-----------------
The Times shall permit EDC and the Reviewing Parties, their agents, employees
and/or professional consultants to make inspections of the Construction Site
during normal business hours or otherwise when Construction Work is in
progress, at reasonable times and upon reasonable notice to The Times and in
accordance with applicable safety standards, (i) with respect to EDC, as it
deems necessary to observe compliance with and performance under this
Agreement, and (ii) with respect to the Reviewing Parties, as are normally
made by the City and its agencies in the course of a project or projects of
similar nature and magnitude to the Work. Such inspections shall not require
the uncovering of any work unless specifically requested in writing by EDC or
the Reviewing Parties, and if the work that has been uncovered is determined
to have been performed in accordance with the Final Plans and Specifications
and the Requirements, EDC shall pay the costs associated with the uncovering
-21-
<PAGE>
requested by EDC and if the Work that has been uncovered is determined to be
unacceptable because it was not performed in accordance with the Final Plans
and Specifications or the Requirements, The Times shall pay the costs
associated with the uncovering. EDC shall use its good faith efforts to cause
such inspection to be made in a manner that will not interfere with the
progress of the Work. A representative of The Times shall, if available,
accompany the person or persons making such inspection on behalf of EDC or the
Reviewing Parties, unless The Times elects to forego such right. The Times
shall cause a complete set of the Final Plans and Specifications, as then in
effect, and shop drawings to be maintained at the Construction Site for
inspection by EDC, the Reviewing Parties and each of their respective
employees, consultants and agents. The omission or failure of EDC or the
Reviewing Parties or any representative thereof to make such inspections, to
identify any defects or to notify The Times of any observable defects or any
non-compliance with the terms of this Agreement or the Final Plans and
Specifications, shall in no way relieve The Times of its obligations under
this Agreement or impose any liability upon EDC, the Reviewing Parties, or any
of their respective employees, consultants and agents.
(g) Completion.
-----------
(1) Subject to Unavoidable Delays, The Times shall diligently proceed
to cause Substantial Completion of the Interim Car Pound to occur; provided,
however that if The Times believes that Substantial Completion of the Interim
Car Pound will occur later than three (3) months after The Times commences
construction of such Interim Car Pound, The
-22-
<PAGE>
Times shall promptly notify EDC of the expected length of time it anticipates
it will require to Substantially Complete the Interim Car Pound and delays
encountered, if any.
(2) The Times shall notify EDC of the date the Work shall have been
Substantially Completed. EDC shall have ten (10) Business Days after the
giving of the notice referred to in the preceding sentence to inspect the
Improvements and notify The Times in writing of its acceptance of The Times's
determination of Substantial Completion or to notify The Times of specific
objections which it believes renders the Work not Substantially Completed and
prepare the Substantial Completion Punch List, if necessary, and deliver the
same to The Times within such ten (10) Business Day period. The Times shall
Substantially Complete those items of the Work, if any, specified in EDC's
notice as not Substantially Complete or otherwise specified in the Substantial
Completion Punch List.
(3) After EDC's acceptance of The Times's determination of Substantial
Completion, The Times shall cause the Resident Engineer or the Construction
Manager to prepare a Final Punch List. Such Final Punch List shall be
prepared after inspection of the substantially completed Improvements by the
Reviewing Parties and shall incorporate those items determined by such
Reviewing Parties to be necessary for Final Completion of the Work.
(4) The Times shall use its good faith efforts to cause Final
Completion to occur as soon as reasonably possible after Substantial
Completion and, to the extent reasonably achievable, shall complete all items
on the Final Punch List within ten (10) days after the Substantial Completion
Date.
-23-
<PAGE>
Sec.1.2 Procurement of Bids, Services and Goods
---------------------------------------
(a)(1) If The Times elects to construct the Interim Car Pound as
provided in Sec.1.1(a) hereof, The Times shall enter into a Construction
Contract or Construction Contracts independently and not as agent of the City or
EDC for the performance of the Construction Work in accordance with the Final
Plans and Specifications so as to facilitate the construction of the
Improvements.
(2) Any Construction Contract entered into by The Times (and any bid
packages prepared by The Times for the bid of the Construction Work) shall
instruct the Contractors (or bidders, as appropriate) as follows: title to the
Construction Site and the Improvements shall be and vest in the City.
Materials to be incorporated into the Construction Site shall, effective upon
their purchase and at all times thereafter, constitute the property of the
City and upon incorporation of such materials into the Construction Site title
thereto shall be and continue in the City. In accordance therewith, purchases
of tangible personal property by the Contractors arising in connection with
the construction of the Improvements are exempt from the payment of certain
sales and compensating use taxes to the extent that such property (i) is used
to alter, maintain or improve, and becomes an integral component part of, the
Construction Site, or (ii) remains tangible personal property and is installed
on the Construction Site. This exemption does not apply to tools, machinery,
equipment or other property leased by The Times or its Contractors, or to
supplies, materials or other property which are consumed in the course of
construction or for any other reason not incorporated into the Construction
Site.
-24-
<PAGE>
(b)(1) Prior to letting any Construction Contract to be entered into
directly by The Times or by The Times's Construction Manager, if any, The
Times shall submit to EDC a list of proposed bidders and, to the extent known
to The Times, identify the principals of the bidders (the "Proposed Bidders
List"). EDC shall advise The Times in writing within five (5) Business Days
after receipt of the Proposed Bidders List, as to which bidders on the
Proposed Bidders List are acceptable or unacceptable and, if any bidders are
unacceptable, the specific reasons therefor. EDC may also advise The Times,
within such five (5) Business Day period, of additional bidders that it
proposes that The Times include on the Proposed Bidders List. If EDC fails to
provide such advice within such five (5) Business Day period, all of the
bidders on the Proposed Bidders List shall be deemed approved. For purposes
hereof, any bidder other than a bidder that is a Prohibited Person or has
received a negative contractor evaluation from EDC or the City within the five
(5) years prior to the date of the Proposed Bidders List, shall be deemed
acceptable to EDC. The Times shall obtain proposals from at least six (6)
qualified bidders from the list of acceptable bidders and if EDC has proposed
additional bidders to be included on the Proposed Bidders List as provided
above, at least three (3) of such six (6) qualified bidders shall be bidders
proposed by EDC (or if EDC has proposed less than three (3) bidders, then the
qualified bidders shall include all the bidders proposed by EDC). The Times
shall submit to EDC by hand delivery, registered or certified mail, or
national overnight courier service, a bid summary, analysis and statement as
to which bidder The Times intends to select, which statement shall be
certified by The Times and give specific reasons for The Times's preference.
The Times
-25-
<PAGE>
shall not accept a bid which is not the lowest bid without EDC's prior written
approval. EDC, in its sole discretion, may (but is not obligated to) either
accept a bid which is not the lowest bid if necessary to enable The Times to
achieve the total W/MBE Participation Dollar Value and the total W/MBE
Percentage or, in the alternative, reduce the W/MBE Participation Dollar Value
and the W/MBE Percentage in an amount equal to the portion of the W/MBE
Participation Dollar Value and the W/MBE Percentage that would have been
achieved by accepting such bid. EDC reserves the right, at any time prior to
The Times's acceptance of a bid, to withdraw its prior approval of the bidder
chosen in the event that EDC shall learn that the bidder shall have committed
any act, or if the bidder shall become the subject of any investigation or
legal proceeding, either or both of which would have disqualified the bidder
from receiving EDC's original approval. Nothing contained in this Sec.1.2(b)(1)
shall limit The Times's right to reject all bids in its sole discretion.
(2) Notwithstanding anything to the contrary contained herein, in the
event that EDC does not approve any bidder selected by The Times, or withdraws
its prior approval of any bidder chosen in accordance with Sec.1.2(b)(1) above,
The Times shall have the right to revoke its election to construct the
Improvements, provided that The Times reimburses EDC for any Funding already
disbursed by EDC to The Times to pay for Resident Engineer Costs or CM Costs.
The Times shall exercise its right to revoke its election in accordance with
the foregoing by giving EDC written notice of such revocation. Upon EDC's
receipt from The Times's of its notice of revocation and reimbursement of the
Funding previously disbursed as provided above, this Agreement shall terminate
and thereafter neither Party
-26-
<PAGE>
shall have any rights against or obligations to the other Party by reason of
this Agreement, except as otherwise specifically set forth in this Agreement.
(3) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1)
above, at any time after the date hereof The Times shall have the right,
without following the bidding procedure outlined in Sec.1.2(b)(1) above, to
enter into a Construction Contract with respect to the construction of the
Interim Car Pound with a Construction Manager if such Construction Manager is
Lehrer McGovern Bovis, Inc.
(4) Notwithstanding anything to the contrary contained in Sec.1.2(b)(1)
above, at any time after the date hereof The Times shall have the right,
without following the bidding procedure outlined in Sec.1.2(b)(1) above, to
enter into a Construction Contract with respect to the construction of the
Interim Car Pound with a Resident Engineer if such Resident Engineer is the
professional consultant engaged by EDC to prepare the Final Plans and
Specifications. Upon execution of a consultant contract therefor, EDC shall
notify The Times in writing of the professional consultant so engaged by it to
prepare the Final Plans and Specifications.
(5) For purposes hereof, the term "Prohibited Person" shall mean:
(i) Any Person (A) that is in default or in breach, beyond any
applicable grace period, of its obligations under any
material written agreement with EDC or Landlord, or (B) that
directly or indirectly controls, is controlled by, or is
under common control with a Person that is in default or in
breach, beyond any applicable grace period, of its
-27-
<PAGE>
obligations under any material written agreement with
EDC or Landlord, unless, such default or breach has been
waived in writing by EDC or Landlord, as the case may be.
(ii) Any Person (A) that has been convicted in a criminal
proceeding for a felony or any crime involving moral
turpitude or that is an organized crime figure or is reputed
to have substantial business or other affiliations with an
organized crime figure, or (B) that directly or indirectly
controls, is controlled by, or is under common control with
a Person that has been convicted in a criminal proceeding
for a felony or any crime involving moral turpitude or that
is an organized crime figure or is reputed to have
substantial business or other affiliations with an organized
crime figure.
(iii) Any government, or any Person that is directly or indirectly
controlled (rather than only regulated) by a government,
that is finally determined to be in violation of (including,
but not limited to, any participant in an international
boycott in violation of) the Export Administration Act of
1979, as amended, or any successor statute, or the
regulations issued pursuant thereto, or any government that
is, or any Person that, directly or indirectly, is
controlled (rather than only regulated) by a government that
is subject to the regulations or controls thereof.
-28-
<PAGE>
(iv) Any government, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a government,
the effects or the activities of which are regulated or
controlled pursuant to regulations of the United States
Treasury Department or executive orders of the President of
the United States of America issued pursuant to the Trading
with the Enemy Act of 1917, as amended.
(v) Any Person that is in default in the payment to the City of
any real estate taxes, sewer rents or water charges
totalling more than $10,000, (or any person that directly
controls, is controlled by, or is under common control with
a Person in such default), unless such default is then being
contested in good faith in accordance with the law.
(vi) Any Person (A) that has owned at any time during the three
(3) years immediately preceding a determination of whether
such Person is a Prohibited Person any property which, while
in the ownership of such Person, was acquired by the City by
in rem tax foreclosure, other than a property in which the
------
City has released or is in the process of releasing its
interest pursuant to the Administrative Code of the City or
(B) that, directly or indirectly controls, is controlled by,
or is under common control with such a Person.
-29-
<PAGE>
(c) The Times shall provide EDC with a list of all Contractors, other
than suppliers, whose Contract amount totals more than $100,000, on the form
attached hereto as Exhibit B. The Times will furnish each Contractor, other
than a supplier, whose Contract amount totals more than $100,000, with a
subcontractor questionnaire in the form attached hereto as Exhibit C and/or
such other qualification and background investigation form(s) as may be used
by the City at such time ( collectively, "Investigation Forms") provided by
EDC to The Times, and shall use its good faith efforts to cause each such
Contractor to fill out and complete the Investigation Forms in a timely
fashion but in no event later than the completion of the work performed by
such Contractor pursuant to its Contract.
(d) All Construction Contracts, in order to be eligible for
disbursement under this Agreement, shall provide, in substance:
(1) that the Contractor shall obtain and maintain comprehensive
general liability insurance and other insurance in the amounts and
in accordance with the applicable provisions set forth in Appendix
C;
(2) that neither the Contractor nor any of its employees or
subcontractors is or shall be deemed to be an agent, servant,
employee or contractor of the City or EDC by virtue of this
Agreement or by virtue of any approval, permit, license, grant,
right or other authorization given the City, EDC or any of their
respective officers, officials, directors, members, agents or
employees; and that the Contractor shall not commence any legal
proceeding against the City or EDC to recover any compensation
which may be payable under the
-30-
<PAGE>
Construction Contract;
(3) that the Contractor is solely responsible for the work, direction,
compensation and personal conduct of its employees and
subcontractors;
(4) that the Contractor shall indemnify and hold harmless the City,
EDC and their respective agents, officers, directors, officials,
members and employees from any and all claims, judgments or
liabilities to which they may be subject because of any act or
omission of the Contractor or its respective agents, officers,
directors, employees or subcontractors arising out of or in
connection with the pertinent Construction Contract or because of
any negligence, fault or default of the Contractor or its
respective agents, employees, officers, directors or
subcontractors (as the case may be);
(5) that the Contractor shall maintain accurate, readily auditable
records and accounts with supporting documentation, in accordance
with Accounting Principles, of all work performed, and receipts
and expenditures made, in connection with the pertinent
Construction Contract, and that the Contractor shall make such
records and accounts available to EDC, the City and each of their
respective agents and employees, for inspection and audit at
reasonable times and upon reasonable written notice for a period
of six (6) years after completion of the pertinent Construction
Contract;
(6) provisions incorporating the requirements of Sec.6.5(a) (Compliance
with Applicable Law) and Sec.9.1 (Conflict of Interests); and
-31-
<PAGE>
(7) that the Contractor represents and warrants, and shall cause its
subcontractors and material suppliers to represent and warrant,
that state and local sales tax has been excluded from the contract
price, to the extent applicable; provided, however, that the
Contractor and its subcontractors and material suppliers shall be
responsible for and pay any and all applicable taxes, including
sales and use taxes, imposed upon leased tools, machinery,
equipment, and upon all supplies and materials and other property
which are consumed in the course of construction or for any other
reasons not incorporated into the Construction Site.
(e) Any proposed changes or amendments to a Construction Contract, the
effect of which would be to increase the amount of the Funding, shall be made
in accordance with the provisions of Sec.2.3 hereof. Any proposed changes or
amendments to a Construction Contract which affect the provisions to be
included in such Construction Contract pursuant to Sec.1.2(d) hereof shall not
be made unless approved in writing by EDC, which approval shall not be
unreasonably withheld and shall be deemed given unless denied in writing
within five (5) Business Days after EDC's receipt of The Times's written
request for such approval, and no Funding shall be disbursed in respect of any
Work affected by any such change or amendment unless approved in writing or
deemed approved by EDC.
(f) In addition to the provisions required to be included in the
Construction Contracts pursuant to Sec.1.2(d) hereof, The Times may include in
the Construction Contract (and the bid packages therefor) such other
provisions as The Times deems necessary to
-32-
<PAGE>
incorporate the requirements of this Agreement therein, including without
limitation, that the Contractor shall not receive payment under its
Construction Contract until all the conditions for disbursement described in
Article 4 hereof have been satisfied and The Times has received payment of the
Funding from EDC under this Agreement.
Sec.1.3 Liaison to EDC
--------------
The Times agrees that it will cause the Person or Persons on The Times's
staff, described in the Car Pound Self Help Notice as the Person or Persons
primarily responsible to communicate with EDC regarding the performance of the
Work, to be available to the extent reasonably required by EDC in connection
with this Agreement. The Times further agrees to use its good faith efforts
to notify EDC in writing of any intended substitution of said Person or
Persons at least five (5) days prior to the date such substitution will take
effect but in any event will notify EDC in writing of any such substitutions
on the day such substitution will take effect.
-33-
<PAGE>
ARTICLE TWO - THE FUNDING
-------------------------
Sec.2.1 Agreement to Fund. (a) Subject to the terms, conditions,
-------------------
representations and warranties contained in this Agreement, EDC agrees to
disburse the Funding and The Times agrees to accept the Funding and all other
agreements and obligations of EDC and the City set forth herein as full
consideration for performance by The Times of the Work. Subject to EDC's
remedies upon an Event of Default and except as otherwise provided herein, the
Funding, once disbursed under this Agreement, shall not be subject to any
reimbursement whatsoever to EDC.
(b) The amount of the Funding shall be consideration for any and all
costs, fees and/or expenses of The Times in any way connected with the
performance of the Work and, subject to the receipt of such Funding, The Times
will be solely responsible for completion of the Improvements in accordance
with the Final Plans and Specifications. The Times acknowledges that the
Funding is not a fee or other compensation earned by or paid to The Times.
Sec.2.2 Disbursements. (a) The Times agrees to accept the Funding and to
-------------
utilize the proceeds thereof solely in connection with the Work. Except as
otherwise specifically set forth herein, in no event shall The Times be
required to expend any of its own funds to pay for the performance of the Work
and the construction of the Improvements. After the completion of the portion
of the Work to which the portion of the payment being disbursed
-34-
<PAGE>
applies, disbursements shall be made by EDC to The Times as follows:
(1) With respect to Hard Costs, after receipt by EDC of all items
required by Sec.4.2 below, in installments equal to (A) the product of (i) the
measurements of the quantities of items attributable to the Construction Work
(as certified by the Resident Engineer or Construction Manager) and (ii) the
unit price for each such item, (B) less ten percent (10%) retainage, until
fifty percent (50%) completion of the Construction Work, and upon fifty
percent (50%) completion of the Construction Work such lesser retainage as The
Times may, in its sole discretion, require in its Construction Contracts to be
retained (the "Retainage"), subject to disbursement as set forth in (3) below;
(2) With respect to Resident Engineer Costs, in monthly installments
equal to the Resident Engineer Costs for the previous month, calculated based
on the Resident Engineer's fee schedule attached to the Construction Contract
with respect to the Resident Engineer, or alternatively, if The Times elects
to engage a Construction Manager instead of a Resident Engineer (and not in
addition to a Resident Engineer), then with respect to CM Costs, in monthly
installments equal to the CM Costs for the previous month, calculated based on
the Construction Manager's fee schedule attached to the Construction Contract
with respect to the Construction Manager;
(3) With respect to the Retainage, within twenty (20) days after the
Final Acceptance Date; provided, however, such portion of the Retainage equal
to one percent (1%) of the total cost of performing the Work shall not be
disbursed upon the Final Acceptance Date but shall be disbursed within twenty
(20) days after Final Completion.
(b) Intentionally omitted.
-35-
<PAGE>
(c) All disbursements shall be made by check at the principal office
of EDC, or at such other place within the City of New York as EDC may
designate. Disbursement requests shall be submitted within the time periods
and in the manner provided therefor in Article 4.
(d) No portion of the Funding shall be advanced for materials not
incorporated into the Construction Site.
(e) Disbursements of the Funding shall be no more frequent than every
thirty (30) days and shall be made by EDC within ten (10) Business Days after
the date EDC receives from The Times a complete disbursement request,
reasonably satisfactory to EDC, together with the Requisition and all such
other documentation as may be required or reasonably requested by EDC.
(f) If EDC fails to disburse the Funding in accordance with the terms
and conditions of this Agreement, and as a result of such failure any one or
more of the Contractors cease performing the Construction Work, then provided
that The Times gives EDC thirty (30) days prior written notice and an
opportunity to cure such failure, The Times shall have the right, but not the
obligation, to pay such Contractor or Contractors from its own funds for the
performance of the Construction Work and, in accordance with Sec.9.5(b) hereof,
receive an offset against future Rental (other than Impositions) due under the
Lease and against College Point Improvement Payments due under the Lease, in
an aggregate amount equal to the funds so disbursed by The Times to such
Contractor or Contractors, from the date that The Times paid such funds to
such Contractor or Contractors until the earlier to occur of the date on which
EDC recommences the disbursement of the portion
-36-
<PAGE>
of the Funding allocable to the Construction Work performed by such Contractor
or Contractors or the date of such offset.
(g) If any one or more of the Contractors cease performing the
Construction Work as a result of EDC's failure to disburse the Funding to The
Times in accordance with the terms and conditions hereof, then,
notwithstanding anything to the contrary contained herein, EDC shall indemnify
and hold harmless The Times Indemnitees from and against any and all claims,
judgments, liabilities and causes of action whatsoever instituted and/or
obtained by such Contractor or Contractors as a result of such failure to
fund. The obligation of EDC to indemnify and hold harmless The Times
Indemnitees shall include but not be limited to the payment of any and all
costs and reasonable fees (including reasonable legal fees) as may be actually
incurred by The Times Indemnitees as a direct result of EDC's failure to fund.
Sec.2.3 Funding of Costs of Changes
---------------------------
(a) Notwithstanding any provision to the contrary contained in this
Agreement, EDC shall not disburse increased Funding on account of Eligible
Costs covered by changes to the Final Plans and Specifications except as
expressly provided in this Sec.2.3. In no event will the amount of the Funding
be increased on account of such changes made other than pursuant to
Sec.2.3(b)(i), Sec.2.3(b)(ii) or Sec.2.3(d) hereof. The Eligible Costs incurred
in connection with all changes made in accordance with Sec.2.3(b)(ii) or
Sec.2.3(d) hereof shall be paid for with the Funding.
-37-
<PAGE>
(b) Changes Initiated by The Times
------------------------------
(i) Material Changes. In no event shall The Times have the
-----------------
right to initiate Material Changes to the Final Plans and Specifications and
EDC shall not be obligated to disburse the Funding on account of Eligible
Costs increased by any such Material Change initiated by The Times. If, in
the course of the Construction of the Improvements, The Times or its
Contractors determines that a Material Change to the Plans and Specifications
will be required to complete the Improvements, The Times shall notify EDC of
such determination. Within five (5) days after EDC's receipt of such
notification, EDC shall either inform The Times that it believes no Material
Change is required or it shall instruct the professional consultant engaged by
EDC to prepare the Plans and Specifications (or the Resident Engineer if such
Resident Engineer is the same Person as the professional consultant engaged by
EDC) to make the appropriate changes to the Plans and Specifications. If EDC
fails to respond to The Times within the five (5) day period described above
and if the Resident Engineer is the same person as the professional consultant
engaged by EDC to prepare the Plans and Specifications, the Material Changes
requested by The Times shall be deemed approved by EDC and the Resident
Engineer shall have the right to make the appropriate changes to the Plans and
Specifications. If EDC instructs its professional consultant to make changes
to the Plans and Specifications, EDC shall cause such professional consultant
to complete such changes within thirty (30) days after the date of EDC's
instruction.
-38-
<PAGE>
(ii) Non-Material Changes. The Times shall have the right to
--------------------
initiate changes to the Final Plans and Specifications which result only in a
change in the quantity of materials to be supplied under a Construction
Contract (even if such change results in an increase of the cost of such
Construction Contract). EDC shall disburse the Funding on account of each
such change to the Final Plans and Specifications described above, provided
that EDC is notified of such change prior to The Times's submission of a
Requisition pursuant to Article 4 for funds relating to the Work covered by
the change, and further provided that the need for such change does not result
from or arise out of an error or omission on the part of The Times or an
Affiliate, any Contractor or subcontractor.
(c) Intentionally Omitted.
(d) Changes Initiated by EDC
------------------------
(i) Changes in the Work. EDC shall have the right and
---------------------
authority, on behalf of itself and the Reviewing Parties, to make
interpretations of the Final Plans and Specifications and/or to order minor
changes in the Construction Work that do not increase the price of a
Construction Contract or the amount of time necessary to complete the
Construction Work. The Times shall promptly cause the affected Contractor(s)
to comply with any such order.
(ii) Change Orders. In addition to the changes requested
--------------
pursuant to clause (i) above and changes requested by The Times pursuant to
Sec.2.3(b)(i) hereof, from time to time during the course of the Work, changes
in the Requirements governing the construction of the Improvements, field
conditions or other unexpected conditions may require changed, deleted and/or
additional work to be performed. For purposes of this Sec.2.3(d), said
-39-
<PAGE>
changed, deleted or additional work shall be referred to as "change order
work". Only EDC, on behalf of itself and the Reviewing Parties, shall have
the right to require change order work to be performed. All change order work
must be performed only if ordered by a written directive from EDC (for
purposes of this Sec.2.3(d), the "change order"). Neither oral directives nor
any writing not designated by EDC as a change order will constitute change
orders. Upon receipt of a change order from EDC, The Times shall cause its
Contractors to promptly comply with it by performing all necessary work in
accordance therewith. If work is added or deleted by a change order, then the
amount of the increase (in the event the change order work would involve any
adjustment in the price of a Construction Contract that would bring the
aggregate price of the Work to an amount greater than the amount of the
Funding) or decrease in the Funding shall be determined in one or more of the
following ways as may be applicable:
(A) If The Times and the Contractor shall agree upon a lump sum value
or a unit price value to increase or decrease the amount of the Funding
for the work specified, The Times shall notify EDC of such agreed upon
lump sum value or unit price value and EDC shall, or shall cause, such
value to be stated in writing in the change order, and the amount of the
Funding shall be changed by such value; and/or
(B) If the Construction Contract and/or the bid proposal of the
affected Contractor is based upon or shall contain unit prices which are
to be applicable to the type of work involved in the proposed change
order work, then said unit prices shall be used to set the value of the
increase or decrease to the amount of the Funding for the change order
work; and/or
-40-
<PAGE>
(C) If The Times and the affected Contractor cannot agree upon a lump
sum value or unit price value, and no unit price is specified in the
Construction Contract and/or the bid proposal of such Contractor, then
the increase or decrease to the amount of the Funding shall be
determined on a time and a materials basis.
(iii) Payment for Change Order Work. Payments for change order
-------------------------------
work shall become due and shall be made by EDC to The Times after the
Contractor has performed the change order work and after the Contractor
submits a fully signed copy of said change order (or the portion thereof
covered by a Requisition) on the form annexed hereto as Exhibit D, with The
Times's next requisition for payment, noting on said change order that the
Contractor agrees to and accepts said change order. In the event that the
change order is a credit change order, EDC shall make the deduction for said
change order immediately upon the issuance of said change order against any
funds due or to become due under this Agreement and/or any other change orders
with respect to the relevant Contractor, subcontractor or material supplier.
-41-
<PAGE>
ARTICLE THREE - TERM
--------------------
Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon
-----
the execution of this Agreement by both parties and the unconditional delivery
of this Agreement by each Party to the other and shall expire on the
occurrence of any of the following events: (i) the first anniversary of the
Car Pound Removal Date if The Times fails to deliver to EDC a Car Pound Self
Help Notice prior thereto, or (ii) the date on which EDC receives notice from
The Times of The Times's revocation of the Car Pound Self Help Notice in
accordance with Sec.1.1(b)(3) or Sec.1.2(b)(2) hereof and reimburses EDC for any
Funding already disbursed as required pursuant to the terms of this Agreement,
or (iii) if The Times has delivered to EDC a Car Pound Self Help Notice within
the time provided in Sec.1.1(b)(1) hereof and has not revoked such election in
accordance with this Agreement and has in fact commenced the Construction
Work, then the later to occur of either (x) one month after Final Completion
of the Work, or (y) the complete disbursement by EDC to The Times of all
amounts payable to The Times pursuant to the terms of this Agreement, unless
sooner terminated by EDC in accordance with this Agreement; provided, however,
that, notwithstanding anything to the contrary contained herein, if The Times
has not yet exercised its option, pursuant to Sec.1.1 hereof, to
construct the Interim Car Pound and EDC has completed construction
of the permanent relocation New York City Police Department vehicle
pound, then, this Agreement shall terminate upon EDC's completion
of construction of the permanent relocation vehicle pound, and
further provided that, notwithstanding
-42-
<PAGE>
anything to the contrary contained herein, upon the expiration or earlier
termination of the Lease, this Agreement shall terminate. All rights,
remedies and liabilities arising prior to the termination or expiration
of the Term shall survive the date of termination or expiration, as the
case may be.
-43-
<PAGE>
ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT
------------------------------------------
Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to
---------------------------------
disburse any of the Funding to The Times unless, at any time prior to the
first request for disbursement of the Funding but no later than ten (10) days
prior to the date on which the first payment of the Funding to be made
pursuant to this Agreement is sought, EDC shall have received the following
documents, together with a cover sheet (a "Completed Cover Sheet") listing the
items submitted:
(a) a legal opinion by counsel to, or general counsel of, The Times
(addressed to EDC) in the form annexed hereto as Exhibit E, to the
effect that (I) this Agreement is legal, valid and binding upon
and enforceable against The Times in accordance with its terms
(subject, as to enforceability, to principles of equity and
applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), and (II) The Times has been duly
authorized to execute and deliver this Agreement;
(b) a certificate, in the form annexed hereto as Exhibit F, of an
authorized officer of The Times certifying the specimen signature
of each officer, director or agent of The Times authorized to
deliver Requisitions under this Agreement;
(c) copies of any then executed Construction Contract(s), containing
all the provisions required pursuant to Sec.1.2(d) hereof; and
(d) a collateral assignment by The Times to EDC of The Times's right,
title and
-44-
<PAGE>
interest to the Construction Contracts, which collateral
assignment shall be effective only upon an Event of Default and
the termination of this Agreement.
Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC
-------------------------------------------------------------
shall not be obligated to make the first disbursement of the Funding or any
subsequent disbursement with respect to the Work unless the following
conditions, in addition to the conditions described in Sec.4.1, shall have been
satisfied:
(a) The following documents, in form and substance reasonably
satisfactory to EDC, together with a Completed Cover Sheet, shall, except to
the extent previously submitted by The Times, be delivered to EDC at least ten
(10) days in advance of the date on which each (except as otherwise indicated
in this Sec.4.2) payment is sought:
(i) copies of all Contractor's Approvals necessary to lawfully perform
the Construction Work for which the Funding is being sought in
accordance with the Final Plans and Specifications;
(ii) a requisition executed and certified by an authorized
representative of The Times (and addressed to EDC), setting forth:
(x) the amount of the requested disbursement, (y) an itemization
of the Eligible Costs for which the disbursement is sought, and
(z) a list of Contractors whose work is covered by the
requisition, indicating the amount requested with respect to each
such Construction Contract, with a certification by such
authorized representative
-45-
<PAGE>
that such Eligible Costs have not previously been reimbursed under
this Agreement. The requisition shall be accompanied by the
certification described in Sec.6.1 hereof and copies of (I) all
Construction Contracts on account of which payment is being sought
that have not been previously delivered, containing all the
provisions required pursuant to Sec.1.2(d) hereof (or for
Construction Contracts that have been previously delivered, a
statement to that effect and copies of any amendments thereof);
(II) as applicable, requisitions or applications for payment by
the Resident Engineer or the Construction Manager to The Times;
(III) as applicable, a copy of an "Application and Certificate for
Payment", substantially in the forms annexed hereto as Exhibit G,
completed and executed by the Resident Engineer or the
Construction Manager with respect to all work performed by
Contractor(s) and covered by The Times's requisition, together
with a statement of the Resident Engineer or the Construction
Manager addressed to EDC stating the quantities of materials
installed with respect to the Construction Work completed as of
the date of the requisition and that, to the Resident Engineer's
or the Construction Manager's knowledge, the Construction Work
performed by the Contractor(s) and covered by the requisition has
been performed to the Resident Engineer's or the Construction
Manager's reasonable satisfaction substantially in accordance with
the Final Plans and Specifications; and (IV) in connection with
each disbursement request other
-46-
<PAGE>
than the first disbursement request, partial releases of liens
from all Contractors, subcontractors and suppliers in respect to
Construction Work performed under a Construction Contract or
subcontract and for which the Eligible Costs in connection
therewith have been reimbursed with the Funding pursuant to a
prior Requisition (the items described in this paragraph (ii),
collectively, the "Requisition");
(iii) such additional documents, data or information reasonably
requested by EDC with respect to the Construction Site and the
Work or in support of the Requisition, including without
limitation, documents as would customarily be required by City
agencies engaged in projects similar in scope to the Work such as
trade payment breakdowns in support of all subcontractors'
requisitions to the Resident Engineer, Construction Manager or
General Contractor (as the case may be), if any, invoices, and
receipts;
(iv) a written statement by DLS certifying that each Contractor
performing Work has complied with the City's equal employment
requirements under mayoral Executive Order No. 50 (April 25,
1980), as amended, if applicable, or evidence from The Times or
DLS that Executive Order No. 50 or its successor does not apply,
it being understood that such written statement or other
satisfaction by DLS for each Contractor only needs to be submitted
at the time of the submission of the first requisition covering
such Contractor's work and it being further understood that,
notwithstanding anything to the
-47-
<PAGE>
contrary contained herein, for so long as New York State Labor Law
Sec.220 or any successor statute requires contractors performing
work on public works projects to pay journey-level wages to
trainees, the trainee requirements of Executive Order No. 50 shall
not be applicable to the Construction Work, the Contractors and the
subcontractors, and the Contractors and the subcontractors shall
in no event be deemed to be in noncompliance with Executive No. 50
due to noncompliance with such trainee requirements; and
(v) in connection with the first disbursement request, as described in
Sec.6.12, a completed and duly executed W/MBE Plan in the form
annexed hereto as Exhibit H.
(b) As of the date of the disbursement, (i) the representations and
warranties made in Article Five shall be correct and complete and (ii) there
shall exist no unbonded public improvement lien relating to the Funding;
provided, however, that in the event there exists an unbounded public
improvement lien relating to the Funding, EDC shall continue to disburse to
The Times those portions of the Funding which are otherwise payable hereunder
reduced only by the amount of such unbounded lien.
Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this
-------------------------
Article Four shall be directed to EDC's Vice President for Construction.
-48-
<PAGE>
ARTICLE FIVE - REPRESENTATIONS, WARRANTIES AND
----------------------------------------------
GUARANTIES OF THE TIMES
-----------------------
To induce EDC to disburse the Funding, The Times represents and warrants
as follows:
Sec.5.1 Organization; Standing. The Times is a corporation duly organized
----------------------
and validly existing under the laws of the State of New York and has all
requisite power, authority and legal right to execute, deliver and perform its
obligations under this Agreement. A copy of The Times's certificate of good
standing from the Secretary of State of the State of New York is attached
hereto as Appendix D, and hereby made a part hereof.
Sec.5.2 Intentionally omitted.
---------------------
Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery
-------------------------------------
of this Agreement by The Times is not, and the performance of this Agreement
by The Times will not be, effectively prohibited or prevented by, or result in
breach of (i) the certificate of incorporation or by-laws of The Times, or
(ii) to the best of The Times's knowledge, any presently existing or effective
law, judgment, order, writ, injunction, decree, rule or regulation of any
court or Governmental Authority applicable to The Times, or (iii) any
agreement, instrument, or undertaking which is binding on The Times.
-49-
<PAGE>
Sec.5.4 No Litigation. As of the date of this Agreement there are no
-------------
suits or proceedings pending or, to the best of The Times's knowledge,
threatened against The Times which would materially affect the construction of
the Improvements, the consummation of the transactions contemplated by this
Agreement, or the full performance of the obligations of The Times under this
Agreement.
Sec.5.5 Intentionally omitted.
Sec.5.6 Intentionally omitted.
Sec.5.7 Quality of Work; Guaranties and Warranties.
------------------------------------------
(a) The Times shall cause the Construction Work to be performed in a
good and workmanlike manner, and all materials and equipment and workmanship
utilized or furnished in connection with the Construction Work shall be in new
(unless otherwise specified in the Final Plans and Specifications) and good
condition, fully operational, without defects (except to an immaterial
extent), substantially in accordance with the Final Plans and Specifications.
(b) The Times shall, in connection with the Construction Work, obtain
the maximum guaranties and warranties on labor, materials and equipment as are
generally available within the relevant industry. The costs of obtaining such
guaranties and warranties shall be considered Eligible Costs and are payable
with the Funding.
-50-
<PAGE>
(c) The guaranties and warranties required pursuant to Sec.5.7(b) above
shall, to the extent reasonably obtainable by The Times, the Construction
Manager, the Resident Engineer or the General Contractor (as applicable),
expressly be made for the benefit of The Times, the Construction Manager, the
Resident Engineer or the General Contractor (as applicable), EDC and the City
and, immediately upon obtaining the same, The Times, the Construction Manager,
the Resident Engineer or the General Contractor (as applicable), shall assign
its rights and interests therein to EDC and the City, which assignment shall
be in form and substance reasonably acceptable to EDC. Thereafter, The Times,
the Construction Manager, the Resident Engineer or the General Contractor (as
applicable), shall be relieved in all respects with respect to any further
obligations in connection with the Construction Work including, without
limitation, the obligation to repair, replace, restore, or remedy or correct
any defects, faults or deficiencies (including any damage arising out of such
defects, faults or deficiencies) in workmanship or materials which exist,
occur, or are discovered after the assignment of such guaranties and
warranties. The requirements of the first sentence of this Sec.5.7(c) shall be
included in all Construction Contracts.
-51-
<PAGE>
ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC
------------------------------------------------------
To induce The Times to enter into this Agreement and perform the Work,
EDC represents and warrants as follows:
Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation,
-----------------------
organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation
Laws and has all the requisite power, authority and legal right to execute,
deliver and perform its obligations under this Agreement.
Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has
-------------------------------------------
been duly authorized, executed and delivered by EDC and constitutes a legally
binding obligation of EDC enforceable in accordance with its terms. A legal
opinion by general counsel of EDC (addressed to The Times) providing that this
Agreement is legal, valid and binding upon and enforceable against EDC in
accordance with its terms (subject, as to enforceability, to principles of
equity and applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), is attached hereto as Appendix E and hereby
made a part hereof. A certificate of the Secretary of EDC, dated as of the
date of this Agreement, certifying to the adoption of resolutions by the Board
of Directors of EDC authorizing the execution and delivery of this Agreement
by EDC is attached hereto as Appendix F and hereby made a part hereof.
-52-
<PAGE>
ARTICLE SIX
-----------
COVENANTS
---------
Sec.6.1 Requisitions Update The Times's Representations. The Times
----------------------------------------------------
covenants that each Requisition presented to EDC under Article Four shall be
accompanied by a completed certification, in the form attached hereto as
Exhibit I.
Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the
------------------------------------------------------
Term, The Times shall:
(a) comply with all of the terms, conditions and covenants now or in
the future binding upon or applicable to The Times under this Agreement;
(b) do all things necessary to maintain and keep in full force and
effect its existence, rights and privileges under the laws of the State of New
York; and
(c) comply with, and do all things reasonably necessary to cause the
Work to be performed in compliance with all Requirements applicable to the
Work and/or the Construction Site, it being understood that The Times shall
not be held responsible for failure to comply with the Requirements to the
extent that such failure arises out of The Times's performance of the Work in
accordance with the Final Plans and Specifications.
Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The
-----------------------------------------------------------
Times shall maintain or cause to be maintained the insurance coverage
described in Appendix C
-53-
<PAGE>
attached hereto. The Times shall comply with all of the applicable provisions
of such insurance policies. Nothing contained in this Sec.6.3 is intended to
confer any rights upon any third party.
Sec.6.4 Maintenance of Office. The Times will maintain an office in the
----------------------
City of New York where notices with respect to this Agreement may be delivered
to it and inspections and audits in accordance with Sec.6.7 may be conducted.
Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or
------------------------------
cause to be included, the following requirements, as applicable, in all
Construction Contracts, and shall require, or cause to be required, all
subcontracts with respect to the Construction Work to include the same
requirements, so that the Contractor(s) and any subcontractors shall agree, in
substance:
(i) to comply with (1) the applicable provisions of City and New
York State equal employment and affirmative action laws applicable
to construction contractors and non-construction contractors which
are annexed to and made a part of this Agreement as Appendix G
(consisting of "Construction Contract Rider" pursuant to mayoral
Executive Order No. 50, provided, however that the trainee
requirements set forth therein shall be inapplicable for so long
as New York State Labor Law Sec.220 or any successor statute
requires contractors performing work on public works projects to pay
journey-level wages to trainees), and the filing of any required
construction employment reports with
-54-
<PAGE>
the City's Bureau of Labor Services on the forms annexed hereto as
Appendix H; (2) New York State Labor Law Sec.220e, and (3) City
Administrative Code Sec.6-108;
(ii) to comply with the applicable provisions of the New York
City Noise Control Code (Administrative Code Sec.24-216, as amended,
and related regulations); and
(iii) to pay no less than prevailing wage rates and supplemental
benefits to laborers, workers and mechanics pursuant to Sec.220(3)
of the New York State Labor Law in accordance with the currently
scheduled rates, as amended from time to time.
(b) The Times shall use its good faith efforts to promptly, diligently
and continuously enforce the full and faithful performance by the Contractors
with whom The Times enters into Construction Contracts hereof with the
provisions of law referred to in Sec.6.5(a) hereof, and shall use its good faith
efforts to cause such Contractors to enforce such compliance by the
subcontractors and material suppliers hired by such Contractors in connection
with the Construction Work.
Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall
----------
not assign this Agreement except that The Times may assign this Agreement to
an Affiliate without EDC's prior written consent, provided that such Affiliate
assumes all the rights and obligations of The Times under this Agreement, and
that all the representations, warranties and covenants made by The Times in
this Agreement shall be similarly made by such
-55-
<PAGE>
Affiliate, and further provided that The Times provides to EDC a copy of the
executed written agreement evidencing such assignment and assumption.
Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate,
----------------------
readily auditable records and accounts with supporting documentation, of (i)
all of the costs related to the construction of the Improvements, (ii) all of
its receipts and expenditures in connection with the Funding and with the
Work, and (iii) all financial accounts and transactions maintained or
undertaken in connection with this Agreement. The Times shall make such
records available for inspection and audit at The Times's place of business
within New York City by EDC and the City at reasonable times and upon
reasonable advance notice. All such records and accounts shall be maintained
for a period of six years after termination of this Agreement. The provisions
of this Sec.6.7 shall survive the expiration or earlier termination of this
Agreement.
Sec.6.8 Intentionally omitted.
Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and
-----------------------------------
hold the proceeds of the Funding (including any insurance proceeds arising out
of any casualty affecting property purchased with the Funding) as a trust fund
to be applied exclusively for the payment of Eligible Costs (or reimbursement
to The Times for the payment of Eligible Costs) in accordance with the terms
of this Agreement and shall not use any part of the same for any other
purpose.
-56-
<PAGE>
Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of
----------------------------
the Funding shall not constitute a waiver of any default by The Times on
account of defective construction work in performance of the Work or deviation
from the Final Plans and Specifications. No part of the Funding shall be
disbursed for the correction of such non-conforming work unless either (i)
such defective work was performed in accordance with the Final Plans and
Specifications, or (ii) such deviation from the Final Plans and Specifications
was necessitated as a result of unexpected field conditions and was performed
in accordance with good construction practices and EDC approved (which
approval shall not be unreasonably withheld or delayed), in writing, the
performance of such work.
Sec.6.11 Participation by Women and Minority Owned Businesses
----------------------------------------------------
(a) EDC is committed to maximizing meaningful participation by women-
owned business enterprises ("WBEs") and minority-owned business enterprises
("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its
contracting opportunities. Based on its review of the scope of the Work and
the lists of certified W/MBEs maintained by the interested government entities
identified below, EDC estimates that a total aggregate W/MBE percentage of
twenty-five percent (25%) can be attained by The Times for the Work.
Accordingly, prior to receipt of any disbursements hereunder, The Times shall
complete a utilization plan (the "W/MBE Plan"), in the form of Exhibit H
attached hereto, describing The Times's plan for participation of W/MBEs in
the Work.
(b) In order to be considered W/MBEs for purposes of inclusion in the
W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE
Plan must
-57-
<PAGE>
have received certification, as WBEs and/or MBEs, from the New York City
Department of Business Services ("DBS"). Businesses that have been certified
as being women or minority owned by the New York State Department of Economic
Development or the Port Authority of New York and New Jersey may be eligible
to receive expedited certification from DBS after completing the DBS
"Expedited Certification Affidavit" in the form of Exhibit H-1 attached
hereto. Each of these entities maintain current lists of certified W/MBEs;
The Times is encouraged to contact these entities in order to obtain copies of
their current lists of certified W/MBEs who may be qualified to participate,
either as Contractors, subcontractors or materials suppliers, in the Work.
Together with submission of the W/MBE Plan, The Times shall submit
verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan
are certified as WBEs and/or MBEs by DBS prior to the award of the contract
with respect to such Contractor, subcontractor or material supplier.
(c) The Times should use the W/MBE Plan to identify potential W/MBEs
that The Times, the Resident Engineer, the Construction Manager or the General
Contractor intends to employ as Contractors, subcontractors or materials
suppliers. The W/MBE Plan requires the identification of the specific trade
and/or the specific material to be supplied by such W/MBEs. The W/MBE Plan
requires that the level of participation by W/MBEs be described based on (i) a
dollar value estimate of participation by W/MBEs (the "W/MBE Participation
Dollar Value") and (ii) the percentage of the total Funding that will be
passed on to W/MBEs (the "W/MBE Percentage").
(d) The Times shall not be required to utilize the specific W/MBEs
listed in the
-58-
<PAGE>
W/MBE Plan and substitutions may be made; however, The Times shall provide for
the participation of W/MBEs in the Work at a level equal to or greater than
the total aggregate W/MBE Participation Dollar Value and the total aggregate
W/MBE Percentage as each are set forth in the W/MBE Plan. The W/MBE
Participation Dollar Value and the W/MBE Percentage recorded on the W/MBE Plan
are a part of this Agreement. The Times cannot reduce the W/MBE Participation
Dollar Value or the W/MBE Percentage.
(e) If The Times breaches the foregoing obligation relating to the
participation of W/MBEs in the Work, then, as its sole and exclusive remedy
against The Times with respect to any such breach, EDC shall be entitled to
withhold from disbursement to The Times a portion of the Funding in the amount
equal to the difference between (i) the W/MBE Participation Dollar Value set
forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value
achieved by, and in fact paid to participating W/MBEs by or on behalf of, The
Times in respect of the completed Work. No portion whatsoever of any of the
Funding that is withheld pursuant to this Sec.6.11(a) shall be charged to the
account of any W/MBEs employed in respect of the Work.
(f) The Times may substitute other certified W/MBEs for those
identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which
approval shall not be unreasonably withheld) before being employed, either as
Contractors, subcontractors, or as materials suppliers, in respect of the
Work. The Times may also add additional W/MBEs to the W/MBE Plan provided
that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage
falls below that identified in the W/MBE Plan.
-59-
<PAGE>
Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times
--------
shall not create, permit or suffer to exist any mortgage, encumbrance, lien,
security interest, claim or charge against the Construction Site.
(b) The Times will cause the Improvements to be constructed free and
clear of liens of mechanics, material persons and suppliers, including public
improvement liens, or claims for any such liens subject to The Times's right
to cause any such lien to be removed or bonded within sixty (60) days after
the placement of such lien. The costs of removing or bonding such lien shall
be paid by The Times except if such lien was placed solely as a result of
EDC's failure to disburse to The Times the Funding in accordance with this
Agreement, in which case EDC shall pay for the costs of removing or bonding
such lien.
Sec.6.13 Intentionally omitted.
Sec.6.14 Intentionally omitted.
Sec.6.15 Intentionally omitted.
Sec.6.16 MacBride Principles. The Times hereby agrees that with respect
-------------------
to any Construction Contract entered into for the performance of the Work, The
Times shall (i) include in such Construction Contract the requirements of the
MacBride Principles Rider, attached hereto as Appendix J, and shall (ii)
require its Contractors (A) to comply with applicable covenants and
representations set forth in Appendix J, and (B) to cause its
-60-
<PAGE>
contractors, subcontractors, and materials suppliers performing the Work to
also comply with the requirements of Appendix J. Notwithstanding anything to
the contrary contained herein, the provisions of this Sec.6.16 shall not apply
to any contractor, subcontractor or materials supplier with respect to which
there is not another contractor, subcontractor or materials supplier to
perform work or supply materials of comparable quality at a comparable price.
Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion
-----------------------
of the Funding to The Times shall not constitute a waiver of EDC's right to
require compliance with any of the covenants contained in this Article Six or
otherwise contained in this Agreement.
-61-
<PAGE>
ARTICLE SEVEN - DEFAULT AND TERMINATION
---------------------------------------
Sec.7.1 Events of Default. An "Event of Default" shall exist if any of
-----------------
the following shall have occurred:
(a) if The Times shall have applied the Funding in violation of the
covenant set forth in Sec.6.9 and such misapplication was not corrected within
ten (10) Business Days after receipt of written notice thereof; or
(b) if The Times fails to duly observe or perform any of the material
covenants and agreements contained in this Agreement (other than the covenants
contained in Sec.6.9) and if such failure continues for twenty (20) Business
Days after receipt of written notice to The Times by EDC specifying with
particularity such material default and requiring such material default to be
remedied; provided, however, that if because of Unavoidable Delays or if the
nature of the default is such that The Times cannot reasonably be expected to
cure the same within such period, then such material default shall not be an
Event of Default if, within such period (subject to Unavoidable Delays), The
Times commences in good faith to cure such material default and (subject to
Unavoidable Delays) diligently prosecutes such cure to completion; or
(c) if an "Event of Default" (as defined in the Lease) has occurred
under the Lease and EDC has taken action to terminate the Lease in accordance
with the terms thereof; or
(d) if there is any cessation of the Construction Work for any period
in excess of ninety (90) successive calendar days after the date upon which
the Construction Work shall
-62-
<PAGE>
commence, unless the cessation of the Construction Work shall have been caused
by Unavoidable Delays and construction or construction-related activities
shall have resumed promptly after the cause of the Unavoidable Delay shall
have been removed and shall be diligently pursued (it being understood that
during any such cessation of the Construction Work, EDC shall have the right
to enter upon the Construction Site for the purpose of protecting the
Construction Site against deterioration, loss, damage or theft if the
Contractor or Contractors required, pursuant to its respective Construction
Contract(s), to provide such services has ceased providing the services); or
(e) if any representation or warranty by The Times contained in this
Agreement shall be materially false when made or reaffirmed and such
materially false representation or warranty materially adversely affects The
Times's ability to enter into this Agreement and perform the Work in
accordance with the terms hereof.
Sec.7.2 Default Remedies; Exculpation.
-----------------------------
(a) Upon an Event of Default, EDC may exercise any right or remedy
permitted to it by law, in equity, or under this Agreement, including, without
limitation, the right to obtain restitution of any portion of the Funding
which is applied by The Times, The Times's employees, agents or contractors in
violation of Sec.6.9, with interest from the date of EDC's disbursement at the
Late Charge Rate. Without limiting the generality of the foregoing, upon an
Event of Default, EDC shall have the right to elect to terminate this
Agreement (reserving, however, all remedies provided in this Article Seven or
existing otherwise) or to
-63-
<PAGE>
make no further disbursements until such default is remedied or determined not
to be an Event of Default.
(b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof, the
liability of The Times and its Affiliates under this Agreement for damages or
otherwise shall be limited to (i) any sums advanced hereunder to The Times but
not heretofore expended by it, (ii) the proceeds (to the extent actually
received by The Times) of any insurance policies covering or relating to the
Work or the Construction Site, (iii) the obligations of The Times set forth in
Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the period
prior to their assignment to EDC. In no event shall EDC look to the property
or assets of any of the individuals who are the directors, officers,
employees, shareholders, agents or servants of The Times, and no property or
assets of any of the aforesaid Persons shall be subject to levy, execution or
other enforcement procedure for the satisfaction of The Times's obligations
under this Agreement, except in the event such individual has misapplied the
Funding as described in Sec.7.2(c) below and then only to the extent of the
actual dollar amount that such individual has misapplied the Funding;
provided, however, that if such misapplication was the result of such
individual's fraudulent conduct, such individual's liability shall be as set
forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no
event shall The Times Indemnitees be liable for consequential damages under
this Agreement.
(c)(i) Each of the individuals described in Sec.7.2(b) above shall be
personally liable (as distinguished from collective liability), to the full
extent provided by law, in equity, and by this Agreement if any such relevant
individual shall have applied the Funding in violation
-64-
<PAGE>
of the covenant contained in Sec.6.9 of this Agreement and such misapplication
was not corrected within ten (10) Business Days of notice thereof; provided,
however, that such liability shall be limited to the actual dollar amount that
was misapplied unless the misapplication was the result of fraudulent conduct,
in which case such liability shall not be limited as provided above.
(ii) The Times shall be liable to the full extent provided by law, in
equity, and by this Agreement if The Times shall have applied the Funding in
violation of the covenant contained in Sec.6.9 of this Agreement and such
misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct on the part of The Times as opposed to the fraudulent
conduct of an individual not authorized by The Times to act in such a manner,
in which case such liability shall not be limited as provided above.
(d) No course of dealing on the part of EDC or any failure on the part
of EDC to exercise any right shall operate as a waiver of such right or
otherwise prejudice EDC's remedies. No right or remedy conferred upon or
reserved to EDC is intended to be exclusive of any other right or remedy.
Every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy contained in this Agreement or
existing at any time at law or in equity, or otherwise, and may be exercised
from time to time and as often and in such order as EDC may deem appropriate.
The exercise of any right or remedy shall not be construed as an election or a
waiver of any
-65-
<PAGE>
other right or remedy. No delay or omission of EDC in exercising any right or
remedy occurring upon an Event of Default shall impair any such right or
remedy or constitute a waiver of or acquiescence in such Event of Default.
(e) The provisions of this Sec.7.2 shall survive the expiration or
termination of the Term.
Sec.7.3 Termination. If, upon the occurrence of an Event of Default
-----------
described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this
Agreement, or for any other reason provided for under this Agreement, this
Agreement is terminated, EDC agrees that, provided that the Lease remains in
full force and effect and no "Event of Default" (as defined in the Lease)
shall have occurred and be continuing thereunder, EDC shall undertake the
construction of the Interim Car Pound in accordance with the Final Plans and
Specifications with such reasonable changes therein as EDC may from time to
time and in its reasonable discretion, deem appropriate; provided that such
changes shall not increase the amount of time needed to complete the
Construction Work. In such circumstances, EDC shall have the right (but shall
not be obligated) to assume any Construction Contract made by or on behalf of
The Times in any way relating to the Work and to take over and use all or any
part or parts of the labor, materials, supplies and equipment contracted for,
by, or on behalf of The Times, whether or not previously incorporated into the
Construction Site, all in EDC's discretion. To effectuate the provisions of
this paragraph, The Times hereby collaterally assigns to EDC all such
Construction Contracts, whether presently existing or made in the future, as
more particularly set forth in Sec.4.1(d) hereof, and, if EDC
-66-
<PAGE>
exercises its rights under such collateral assignment, EDC shall assume all of
the obligations and liabilities of The Times under such Construction
Contracts. In connection with any demolition or construction undertaken by
EDC pursuant to the provisions of this Sec.7.3, EDC may (i) engage builders,
contractors, architects, engineers and others for the purpose of furnishing
labor, materials and equipment, (ii) reasonably pay, settle or compromise all
bills or claims which may become liens against the Construction Site, or which
have been or may be properly incurred, or for the discharge of liens,
encumbrances or defects in the title of the Construction Site, and (iii) take
such other reasonable action (including the employment of watchmen) to protect
the Construction Site. Any costs incurred by EDC in connection with the
performance of the above-described work which are in excess of the amount of
the Funding and which are necessitated as a result of the earlier termination
of this Agreement by reason of The Times's default or The Times's failure to
perform its obligations with respect to the construction of the Improvements
in accordance with this Agreement and the Final Plans and Specifications shall
be paid by the Times. The provisions of this Sec.7.3 shall survive the
expiration or termination of the Term.
Sec.7.4 Right to Reinstate Agreement. If, after termination of this
------------------------------
Agreement (the "Initial Termination"), EDC fails, in accordance with Sec.7.3
above, to either (i) commence the construction of the Interim Car Pound, or
(ii) if The Times had already commenced the construction of the Interim Car
Pound pursuant to the terms of this Agreement but such construction was
stopped as a result of the termination of this Agreement, recommence the
-67-
<PAGE>
construction of the Interim Car Pound, in either case within three (3) months
after the Initial Termination, then provided that The Times shall have given
EDC thirty (30) days prior written notice and an opportunity to cure, The
Times shall have the right to elect to reinstate this Agreement and construct
the Interim Car Pound in accordance with the terms hereof; provided, however,
that any costs incurred by The Times in excess of the amount of funds
allocated by the City and EDC for the Funding at the time of the termination
of this Agreement shall be paid at the sole cost and expense of The Times
without any right of reimbursement under this Agreement or any other agreement
of The Times with EDC or the City if and to the extent that such excess
amounts are incurred by reason of The Times's default or The Times's failure
to perform its obligations with respect to the construction of the
Improvements in accordance with this Agreement and the Final Plans and
Specifications (including, without limitation, construction delays). Upon
reinstatement of this Agreement in accordance with this Sec.7.4, all terms and
provisions of this Agreement shall be in full force in effect, including
without limitation, the provisions of this Article 7 with respect to EDC's
right to terminate this Agreement upon the occurrence of a further Event of
Default. The provisions of this Sec.7.4 shall survive the Initial Termination
but shall not survive any further or subsequent termination.
-68-
<PAGE>
ARTICLE EIGHT - NOTICES
-----------------------
Sec.8.1 Notices. All notices under this Agreement shall be in writing and
-------
shall be deemed to have been sufficiently given or served for all purposes as
of the date when sent by hand, or by a national overnight courier service, or
by certified or registered mail, return receipt requested, and addressed as
follows (or to such other addresses as may from time to time be designated by
EDC or The Times by notice delivered to the other in accordance with this
Sec.8.1):
(i) if to EDC:
New York City Economic Development Corporation
110 William Street
New York, N.Y. 10038
Attention: President
with a copy via ordinary mail to General Counsel, at the
same address
and to:
New York City Law Department
100 Church Street
New York, New York 10007
Attention: Chief, Economic Development Division;
(ii) if to The Times:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Solomon B. Watson, IV, Esq.
General Counsel
-69-
<PAGE>
with a copy via ordinary mail to David Thurm, Executive
Director of Project Development, at the same address, and
with a copy in the same manner sent to The Times to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin Polevoy, Esq.
Sec.8.2 Disbursement Submissions. All Requisitions and other submissions
------------------------
for disbursements required to be made pursuant to Article Four of this
Agreement shall be addressed as directed in Sec.4.3 hereof.
-70-
<PAGE>
ARTICLE NINE - GENERAL CONDITIONS
---------------------------------
AND COVENANTS
-------------
The following terms, covenants and conditions shall be applicable
throughout the Term:
Sec.9.1 Conflict of Interests. No member, officer, director or employee
---------------------
of EDC or the City, or their designees, consultants or agents; no member of
the governing body of the City and no public official of the City who
exercises or exercised any functions or responsibilities with respect to the
subject matter of this Agreement during his/her tenure, if known to The Times,
shall have any interest, direct or indirect, in any contract or subcontract,
or the proceeds thereof, for work to be performed in connection with the Work
or in any activity or benefit arising out of or in connection with the
performance of the Work. Upon receiving actual notice or knowledge of any of
the circumstances specified in the preceding sentence, The Times shall deliver
notice to EDC of the circumstances and immediately shall use good faith
efforts to cause the Persons affected to terminate their interest in the
prohibited contract or property. The Times shall require the Resident
Engineer, Construction Manager, Owner's Representative or General Contractor
(as the case may be) and the Contractors, subcontractors and materials
suppliers to make appropriate representations in writing that they, their
employees and principals do not have any conflict of interest prohibited under
this Sec.9.1, and to covenant to use good faith efforts to cause the
-71-
<PAGE>
prohibited persons to terminate their interest in the relevant contract or
property upon demand by The Times.
Sec.9.2 No Liability of Individuals. No officer, employee, director,
-----------------------------
member, agent or other person authorized to act on behalf of EDC or the City
shall have any personal liability in connection with this Agreement or any
default by EDC or the City.
Sec.9.3 Anti-Boycott Provisions.
-----------------------
(a) The Times agrees that it is not now participating, nor shall it
participate during the Term, in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder.
(b) Upon the final determination by the United States Department of
Commerce or any other agency of the United States as to conviction of The
Times for participation in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder, EDC may, at its option, declare a default
under this Agreement (which default is subject to cure by The Times in
accordance with the terms of this Agreement).
(c) The Times shall comply in all respects with the provisions of
Sec.6-114 of the Administrative Code of the City and the rules and
regulations issued by the Comptroller of the City thereunder.
-72-
<PAGE>
Sec.9.4 Governing Law. The provisions of this Agreement shall be governed
-------------
and interpreted in accordance with the law of the State of New York.
Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b)
-----------------
hereof, EDC shall not be liable for consequential damages under this Agreement
to The Times or to any other Person in any matter arising out of the
construction of the Improvements.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, if EDC defaults in the disbursement of the Funding for which it is
obligated, pursuant to the terms of this Agreement, to disburse to The Times
or in the payment of any other monetary amount owed to The Times pursuant to
the provisions of this Agreement and fails to cure such default within thirty
(30) days after The Times delivers notice (the "EDC Default Notice") to EDC of
such default, or if the moneys in the aggregate sum of approximately $550,000,
or such other greater or lesser amount as may be necessary to pay for the
costs of the Work and any change order work or other changes to the Final
Plans and Specifications or Construction Contracts approved by EDC, shall not
be made available to EDC by the City, in whole or in part for any reason,
then, provided that The Times proceeds with the construction of the
Improvements, for each dollar of Funding not so disbursed or monetary amount
not so paid by EDC or made available to EDC by the City, The Times shall have
the right to (y) offset against future Rental (other than Impositions) due
under the Lease and against College Point Improvement Fund Payments due under
the Lease, in an amount equal to the Funding not so disbursed by EDC, and (z)
offset against
-73-
<PAGE>
future Rental (other than Impositions and College Point Improvement Fund
Payments) due under the Lease in an amount equal to any other monetary amount
which EDC is obligated to pay under this Agreement and has not so paid, until
such time as EDC recommences the disbursement of the Funding or pays such
other monetary amount. The Times agrees that the right to an offset against
Rental (other than Impositions) and College Point Improvement Fund Payments as
hereinabove described is The Times's sole remedy against EDC arising out of
the failure of EDC to receive the Funding from the City and The Times shall
not commence any action or proceeding against EDC as a result of such failure,
except as otherwise provided in this Agreement.
(c) In the event that (i) EDC has defaulted in the performance of any
obligation on EDC's part to perform under this Agreement other than the
disbursement of the Funding, or (ii) EDC has defaulted in the disbursement of
the Funding and continues to be in default thereof after the receipt of the
EDC Default Notice and expiration of the thirty (30) day cure period provided
therein, The Times shall have all of its rights at law and in equity against
EDC.
(d) Except as otherwise provided in this Agreement; (i) no course of
dealing on the part of The Times or any failure on the part of The Times to
exercise any right shall operate as a waiver of such right or otherwise
prejudice The Times's remedies, (ii) no right or remedy conferred upon or
reserved to The Times is intended to be exclusive of any other right or
remedy, (iii) every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy contained in this
Agreement or existing at any time at law or in equity, or otherwise, and may
be exercised from time to
-74-
<PAGE>
time and as often and in such order as The Times may deem appropriate, and
(iv) the exercise of any right or remedy shall not be construed as an election
or a waiver of any other right or remedy. No delay or omission of The Times
in exercising any right or remedy occurring upon EDC's failure to disburse the
Funding in accordance with this Agreement or to otherwise perform its
obligations in accordance with the terms of this Agreement shall impair any
such right or remedy or constitute a waiver of or acquiescence in any such
failure.
Sec.9.6 Amendments. This Agreement may not be amended, waived or
----------
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the amendment, waiver or termination is sought.
Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and shall inure to the benefit of EDC and The Times and their
respective successors and permitted assigns.
Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1
--------------------
hereof, The Times acknowledges that the City capital budget dollars which form
the Funding are not and shall not be deemed to be an assignment of any funds
received by EDC from the City. The Times confirms that its rights to the
Funding arise exclusively under this Agreement.
-75-
<PAGE>
Sec.9.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts which, when taken together, shall constitute one and the same
document.
Sec.9.10 Interpretation. The provisions of the Lease incorporated by
--------------
reference into this Agreement are intended to supplement the other provisions
of this Agreement. In the event of any conflict between the Lease provisions
and the other provisions of this Agreement, the provisions of the Lease shall
control.
Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their
---------
respective departments, offices, officers, members, directors, employees and
agents shall collectively be referred to as "the Public Parties". The Times
shall defend, indemnify and hold harmless the Public Parties, from and against
any and all claims, damages (including consequential damages awarded to
third parties against the Public Parties), judgments, liabilities and
causes of action whatsoever to which they may be subject arising out
of the acts or omissions of The Times, its Contractors, subcontractors,
agents, employees or material suppliers, and any and all Persons, in
connection with the performance of the Work, or because of any
negligence, fault or default of The Times, its agents, employees, material
suppliers or subcontractors. The obligation of The Times to indemnify and
hold harmless the Public Parties shall include but not be limited to the
payment of any and all costs and reasonable legal fees as may be actually
incurred by the Public Parties. Nothing contained herein is intended to
create an obligation on The Times to defend, indemnify and hold
-76-
<PAGE>
harmless the Public Parties against those claims, damages, judgments,
liabilities and causes of action described in Sec.1.1(c)(5) hereof
for which it is determined that EDC or the City or their respective
employees, agents or consultants are responsible for. The termination
of this Agreement shall not release The Times from any liability
to the Public Parties arising out of any act or omission of The Times in
connection with this Agreement.
(b) EDC shall indemnify and hold harmless The Times Indemnitees from
and against any and all claims (including consequential damages awarded to
third parties against The Times Indemnitees), damages, judgments, liabilities
and causes of action whatsoever to which they may be subject to the extent
caused as a result of the negligence or misconduct of EDC or its agents or
professional consultants arising out of or in connection with EDC's or its
agents' or professional consultants' inspections of the Construction Site or
uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC
to indemnify and hold harmless The Times Indemnitees pursuant to this
Sec.9.11(b) shall include, but not be limited to, the payment of any and all
costs and reasonable legal fees as may be actually incurred by The Times
Indemnitees in connection with any such claim, damage, judgment, liability or
causes of action. The termination of this Agreement shall not release EDC
from any liability to The Times Indemnitees described in this Sec.9.11(b).
Sec.9.12 No Agency. Neither The Times nor any of its employees,
----------
Contractors or subcontractors is, shall be or shall represent that he, she or
it is an agent, servant or employee of EDC or the City by virtue of this
Agreement or by virtue of any approval,
-77-
<PAGE>
permit, license, grant, right or authorization given by the EDC or the City or
any of their officers, agents or employees. The Times shall be solely
responsible for the work, direction, compensation and personal conduct of its
officers, agents, employees and subcontractors.
Sec.9.13 Venue
-----
(a) Any and all claims asserted by or against EDC or by or against The
Times arising under this Agreement or related hereto shall be heard and
determined either in the courts of the United States ("Federal Courts")
located in the City or in the courts of the State of New York ("New York State
Courts") located in the City of New York. To effect this agreement and
intent, EDC and The Times agree and, where appropriate, shall require each
Contractor to agree, as follows:
(i) If either Party initiates any action against the other
Party in Federal Court or in New York State Court, service of
process may be made on The Times either in person, or by
registered or certified mail (return receipt requested) addressed
to the office of the General Counsel of The Times at the address
set forth in Article Eight of this Agreement, or to such other
address as The Times may provide to EDC in writing, and service of
process may be made on EDC, either in person or by registered or
certified mail (return receipt requested) addressed to EDC at its
address as set forth in Article Eight of this Agreement, or to
such other address as EDC may provide to The Times in writing.
(ii) With respect to any action between EDC and The Times
in New
-78-
<PAGE>
York State Court, each Party hereby expressly waives and
relinquishes any rights it might otherwise have (A) to move to
dismiss on grounds of forum non conveniens, (B) to remove to
----- --- -----------
Federal Court wholly outside New York City, and (C) to move for a
change of venue to New York State Court outside New York City.
(iii) With respect to any action between EDC and The Times
in Federal Court located in New York City, each Party expressly
waives and relinquishes any right it might otherwise have to move
to transfer the action to a Federal Court outside the City of New
York.
(iv) If either Party commences any action against the other
Party in a court located other than in the City and State of New
York, then, upon request of the Party against whom the action is
brought, the Party bringing the action shall either consent to a
transfer of the action to a court of competent jurisdiction
located in the City and State of New York or, if the court where
the action is initially brought will not or cannot transfer the
action, then to dismiss such action without prejudice, and may
thereafter reinstitute the action in a court of competent
jurisdiction in New York City.
Sec.9.14. Investigations; Cooperation.
----------------------------
(a) Definitions. As used in this Sec.9.14:
-----------
(i) "Investigation" shall mean any investigation, audit or
inquiry conducted by the Department of Investigation with respect
to the obtaining and/or
-79-
<PAGE>
performance of the Transaction Documents or any of them,
(ii) "Department of Investigation" shall mean the Department of
Investigation of the City or any City department or agency
succeeding to the functions thereof,
(iii) "Commissioner" shall mean the Commissioner or Acting
Commissioner of the Department of Investigation,
(iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and
Economic Development of the City (or the officer of the City
succeeding to the functions of that office),
(v) "Entity" shall mean any firm, partnership, corporation,
association or Person that receives monies, benefits, licenses,
leases or permits from or through the City or otherwise transacts
business with EDC or the City,
(vi) "Member" shall mean any Person associated with another
Person or entity as a partner, director, officer, principal or
employee, and
(vii) "Transaction Documents" shall mean the Lease, this
Agreement, Funding Agreement #1, Funding Agreement #2 and Funding
Agreement #4.
(b) Cooperation with Investigations. Subject to the exclusions set
--------------------------------
forth in paragraph (c) of this Sec.9.14, The Times shall during the term of this
Agreement:
(i) cooperate fully and faithfully, and utilize good faith
efforts to cause its Members to cooperate fully and
faithfully, with any Investigation; and
(ii) report, and utilize its good faith efforts to cause its
Members to report, in writing to the Commissioner, any
solicitation of which The Times
-80-
<PAGE>
has actual knowledge of money, goods, requests for future
employment or other benefit or thing of value, by or on
behalf of any employee of the City or any other Person, for
any purpose relating to the procurement or obtaining and/or
performance of any Transaction Document by The Times.
(b) Exclusions. The provisions of Sec.9.14(b) above shall not apply:
----------
(i) to any information or document known, prepared or obtained
by The Times or its Members (and the sources of such
information or documents), that is protected from compelled
disclosure by any present or future "Shield Law" or any
other statute, constitutional provision, rule, regulation or
case law related to the rights of reporters and/or news
organizations;
(ii) to any Person who refuses to testify based on his or her
privilege against self-incrimination after having been given
assurances that his or her statement, and any information
from such statement, will not be used against such Person in
any subsequent criminal proceeding in any forum (provided,
however, that any Person given such assurances shall have
the right to have the legal sufficiency of such assurances
adjudicated by a court of competent jurisdiction as a
precondition of the applicability of Sec.9.14(b) to such
Person); and
(iii) to any construction contract or other agreement (or the
obtaining or performance thereof) with parties other than
the City or EDC,
-81-
<PAGE>
including without limitation, any contract or agreement
being funded through any Transaction Document.
(d) Hearing. If The Times or any Member of The Times refuses to
-------
testify in an Investigation and, in connection with such failure to testify,
the Commissioner determines that The Times has failed to cooperate in the
Investigation in violation of the provisions of Sec.9.14(b) hereof, then the
Commissioner may request the Deputy Mayor to convene a hearing (the
"Hearing"), upon not less than five (5) days written notice to The Times, to
determine if any penalties should be imposed for The Times's failure to so
cooperate in accordance with this Sec.9.14.
(e) Adjournments of Hearing
-----------------------
(i) The Times shall have the right to require that the Hearing
be adjourned for a period of not more than thirty (30) days.
(ii) The Deputy Mayor may grant other adjournments of the
Hearing, in the exercise of his or her reasonable
discretion; provided however, that in the case of an
adjournment occasioned by The Times's failure to appear, the
Deputy Mayor may, if he or she determines that there was no
reasonable cause for the requested adjournment or failure to
appear, impose an Interim Penalty.
(iii) The City shall not incur any penalty or damages for delay or
otherwise occasioned by an adjournment of the Hearing.
-82-
<PAGE>
(f) Penalties.
---------
(i) The Deputy Mayor may impose a penalty during an adjournment
due to The Times's failure to appear or proceed with the
scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof ("Interim
Penalty") of not more than $1,000 per day for each day of
such adjournment, provided, however, that such daily
penalties shall cease to accrue from and after the date that
The Times makes itself available to appear at or proceed
with the scheduled Hearing or gives written notice to the
Deputy Mayor that it does not intend to appear at or proceed
with the scheduled Hearing, in which event the Deputy Mayor
shall have the right to continue the Hearing and reach a
determination without The Times's participation.
(ii) If, after the Hearing, the Deputy Mayor determines that The
Times failed to cooperate in the Investigation in violation
of this Sec.9.14, and The Times fails to commence to cooperate
fully in such Investigation within five (5) Business Days
following its receipt of written notice of such
determination, the Deputy Mayor may:
(A) impose a penalty ("Final Penalty") which may not, in
conjunction with any Interim Penalty or Final Penalty
imposed during the term of this Agreement under this
Agreement and/or during the term of the Lease with
respect to any other
-83-
<PAGE>
Transaction Document, exceed $500,000 in the aggregate
during the term of the Lease; and/or
(B) disqualify The Times, for a period not to exceed five
(5) years, from submitting bids for, or transacting
business with, or entering into or obtaining any
contract, lease, permit or license with or from EDC or
the City, other than as contemplated in the
Transaction Documents.
Notwithstanding anything to the contrary contained herein, in the event
that The Times is found after the Hearing to have failed to cooperate in the
Investigation, but nonetheless is not subjected to a Final Penalty because The
Times commences to cooperate fully in such Investigation within five (5)
Business Days following its receipt of written notice of such determination,
The Times shall be liable for the cost of conducting such Hearing in an amount
not to exceed $5,000.
(g) Criteria for Determination. The Deputy Mayor shall consider and
--------------------------
address in reaching his or her determination and in assessing an appropriate
Interim Penalty, Final Penalty, and/or disqualification, the factors in
clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if
relevant and appropriate, the criteria established in clauses (iii) and (iv)
of this Sec.9.14(g), in addition to any other information which may be relevant
and appropriate:
(i) The Times's good faith endeavors or lack thereof to cooperate
fully and faithfully with the Investigation, including but not
limited to the discipline,
-84-
<PAGE>
discharge or disassociation of any Person failing to testify, the
production of accurate and complete books and records, and the
forthcoming testimony of all other Members, agents, assignees or
fiduciaries whose testimony is sought (the Deputy Mayor shall take
into account whether the discipline, discharge or disassociation
of any Persons failing to testify would violate any union or other
contract),
(ii) the relationship of the Person who refused to testify to The
Times, including, but not limited to, whether the Person whose
testimony is sought has an ownership interest in The Times and/or
the degree of authority and responsibility the Person has within
The Times,
(iii) The nexus of the testimony sought to The Times and the
Transaction Documents, and/or
(iv) the effect a penalty may have on an unaffiliated and
unrelated party or Entity that has a significant interest in The
Times, provided that (x) such unrelated party or Entity has given
actual notice to the Commissioner or EDC upon the acquisition of
the interest, or (y) at the Hearing such unrelated party or Entity
gives notice and proves that such significant interest was
previously acquired; under either circumstance, such unrelated
party or Entity must present evidence at the Hearing demonstrating
the potential adverse impact a penalty will have on such party or
Entity.
-85-
<PAGE>
(h) Payment of Penalties. Any Interim or Final Penalty hereunder
---------------------
shall, upon imposition thereof, be applied to reduce the aggregate of Offset
Amounts (as such term is defined in the Lease) then available to The times
under Article 4 of the Lease and the balance, if any, shall be paid promptly
as additional Rental, or at the landlord under the Lease's option, such
balance shall be applied to reduce EDC's obligations with respect to any
undisbursed Funding.
(i) Exclusive Remedy. Notwithstanding anything to the contrary
-----------------
contained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall
be the sole and exclusive remedies available to EDC in the event that The
Times breaches any of its obligations under this Sec.9.14, and no other
remedies, including, without limitation, the remedies set forth elsewhere in
this Agreement for defaults by The Times in the performance of its obligations
under this Agreement, shall be applicable to a breach by The Times of any of
its obligations under this Sec.9.14.
(j) Right to Dispute Determinations of Deputy Mayor. Nothing
------------------------------------------------------
contained herein shall be construed to limit in any manner whatsoever The
Times's right or ability to challenge or seek to enjoin, overturn, set aside
or modify any action taken, determination made or penalty imposed by the
Deputy Mayor pursuant to the provisions of this Sec.9.14.
(k) Concurrent Lease Obligation. The obligations of The Times under
----------------------------
this Sec.9.14 constitute a portion of the obligations of The Times under Article
40A of the Lease, and nothing contained herein shall be construed as
expanding, enlarging or increasing in any way, or as being separate from or in
addition to, the obligations and liabilities of The Times
-86-
<PAGE>
pursuant to Article 40A of the Lease.
Sec.9.15. Intentionally Omitted.
Sec.9.16 Maximum Interest Rate
---------------------
In the event that any interest payable under this Agreement shall be
deemed to exceed the maximum rate permitted by law, then the amount of
interest to be paid shall be the maximum rate so permitted.
Sec.9.17 Captions
--------
The captions in this Agreement are inserted for convenience of reference
only and in no way define, describe or limit the scope or intent of this
Agreement or any of the provisions hereof.
Sec.9.18 Gender, Etc.
-----------
The gender used in this Agreement shall be deemed to refer to the
masculine, feminine, or neuter gender, as the context or the identity of the
persons being referred to may require. The singular shall include the plural
and vice versa as the context may dictate.
Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without
------------------
the prior written consent of The Times, except that EDC shall have the right,
upon ten (10) Business Days prior written notice, to assign this Agreement
and/or EDC's rights under this
-87-
<PAGE>
Agreement, without any further consent on the part of The Times, to the City.
Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees
----------------------------------
that all non-monetary obligations set forth in this Agreement as being
obligations of The Times shall apply only to, and be performed by, The New
York Times Newspaper Division of The New York Times Company (the "Newspaper
Division") and its employees and agents, and EDC shall look solely to the
Newspaper Division for the performance of such non-monetary obligations;
provided, however, that any default by the Newspaper Division in the
performance of such non-monetary obligations shall be treated with the same
force and effect pursuant to the applicable provisions of this Agreement as if
such default had been committed by The Times.
-88-
<PAGE>
ARTICLE TEN - AGREEMENT OF THE CITY
-----------------------------------
Sec.10.1 City's Agreement to Fund EDC. The City, by executing this
-------------------------------
Agreement as it effects this Article Ten only, (i) acknowledges that it is
becoming a signatory to this Agreement as a material inducement to The Times
to enter into this Agreement, (ii) warrants and represents that the
Consolidated Contract is in full force and effect and legally binding upon the
City; and (iii) covenants and agrees to provide EDC with City capital budget
funds in such amounts and at such times as will permit EDC to comply with its
obligations to disburse the Funding pursuant to the provisions of this
Agreement, without regard to whether the Consolidated Contract is then in full
force and effect or whether EDC is in compliance with the terms thereof.
Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation
---------------------------
Counsel (addressed to The Times) to the effect that this Agreement is legal,
valid and binding upon the City with respect to the provisions of this Article
Ten in the form attached hereto as Appendix K, is being delivered to The Times
concurrently herewith.
Sec.10.3 The Times's Rights Against the City. In the event that the City
------------------------------------
has defaulted in the performance of any obligation of the City pursuant to
this Article Ten and continues to be in default thereof after notice from The
Times and a thirty (30) day period to cure, The Times shall have all of its
rights at law and in equity against the City.
-89-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the day and year first above written.
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By: /s/ Carl Weisbrod
---------------------
Title: President
---------------------
THE NEW YORK TIMES COMPANY
By: /s/ Katharine P. Darrow
---------------------
Title: Senior Vice President
---------------------
THE CITY, BY SIGNING IN THE
PLACE PROVIDED BELOW,
AGREES TO BE BOUND BY THE
PROVISIONS OF ARTICLE TEN HEREOF:
THE CITY OF NEW YORK
By: /s/ Barry F. Sullivan
____________________________
APPROVED AS TO FORM:
By: /s/
____________________________
Acting Corporation Counsel
-90-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came Carl
Weisbrod, to me known, who, being by me duly sworn, did depose and say that s/he
resides at 110 William St., NY, NY; that s/he is the President of New York City
Economic Development Corporation, the corporation described in and which
executed the foregoing instrument; and that s/he signed her/his name thereto by
authority of the board of directors of such corporation.
Colleen B. McHale
----------------------------
Notary Public
COLLEEN B. McHALE
Commissioner of Deeds
City of New York - No. 5-1201
Certificate Filed in Richmond County
Commission Expires Oct. 1, 1994
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came Katharine
Darrow, to me known, who, being by me duly sworn, did depose and say that s/he
resides at 16 Garden Place, Brooklyn, NY; that s/he is the Senior Vice President
of New York Times Company, the corporation described in and which executed the
foregoing instrument; and that s/he signed her/his name thereto by authority of
the board of directors of such corporation.
Beverly Sturr
----------------------------
Notary Public
BEVERLY STURR
Notary Public, State of New York
No. 31-5014766
Qualified in New York County
Commission Expires July 6, 1995
-91-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came Barry F.
Sullivan, to me known, who, being by me duly sworn, did depose and say that s/he
resides at c/o City Hall, NY, NY; that s/he is the Deputy Mayor of The City of
New York, the same person who executed the foregoing instrument; and that s/he
acknowledged that s/he signed her/his name thereto on behalf of The City of
New York and pursuant to the authority vested in her/him.
Colleen B. McHale
----------------------------
Notary Public
COLLEEN B. McHALE
Commissioner of Deeds
City of New York - No. 5-1201
Certificate Filed in Richmond County
Commission Expires Oct. 1, 1994
-92-
FUNDING AGREEMENT #4
between
NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION
and
THE NEW YORK TIMES COMPANY
Dated as of December 15, 1993
Relative to the reconstruction of the
Whitestone Expressway Service Road
from 20th Avenue to Linden Place
in the College Point Industrial Park
in the Borough of Queens
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
DEFINITIONS 4
ARTICLE ONE THE WORK; PERFORMANCE, PROCUREMENT
AND CONTRACT REQUIREMENTS
Sec.1.1 General Provisions and Provisions Regarding
Design and Construction 18
Sec.1.2 Procurement of Bids, Services and Goods 24
Sec.1.3 Liaison to EDC 35
ARTICLE TWO THE FUNDING
Sec.2.1 Determination of Total Reimbursement Amount;
Reallocation of Funding from Funding Agreement #1
to this Agreement 36
Sec.2.2 Agreement to Fund 39
Sec.2.3 Disbursements 39
Sec.2.4 Funding of Costs of Changes 41
ARTICLE THREE THE TERM
Sec.3.1 Term 43
ARTICLE FOUR CONDITIONS FOR DISBURSEMENT
Sec.4.1 Initial Submissions by The Times 44
Sec.4.2 Documentation for Disbursements on Account
of Eligible Costs 45
Sec.4.3 Direction of Submissions 49
Sec.4.4 Failure to Make Submissions on a Timely Basis 49
-i-
<PAGE>
Page
ARTICLE FIVE REPRESENTATIONS OF THE TIMES
Sec.5.1 Organization; Standing 50
Sec.5.2 Intentionally Omitted 50
Sec.5.3 Conflict, etc. under Other Documents 50
Sec.5.4 No Litigation 51
Sec.5.5 Nonrecourse 51
ARTICLE FIVE-A REPRESENTATIONS AND WARRANTIES OF EDC
Sec.5A.1 Organization; Standing 52
Sec.5A.2 Due Authorization; Enforceable Obligations 52
ARTICLE SIX COVENANTS
Sec.6.1 Requisitions Update The Time's Representations 53
Sec.6.2 Compliance with Other Agreements and Law;
Legal Status 53
Sec.6.3 Maintenance of and Compliance with Insurance
Requirements 53
Sec.6.4 Maintenance of Office 54
Sec.6.5 Compliance with Applicable Law 54
Sec.6.6 Assignment 55
Sec.6.7 Maintenance of Records 56
Sec.6.8 Intentionally Omitted 56
Sec.6.9 Due Application of Funding Proceeds 56
Sec.6.10 Defects; Non-Conforming Work 57
Sec.6.11 Participation by Women and Minority Owned
Businesses 57
Sec.6.12 No Liens 60
Sec.6.13 Intentionally Omitted 60
Sec.6.14 Intentionally Omitted 61
Sec.6.15 Intentionally Omitted 61
Sec.6.16 MacBride Principles 61
-ii-
<PAGE>
Page
Sec.6.17 No Waiver of Compliance 61
ARTICLE SEVEN DEFAULT AND TERMINATION
Sec.7.1 Events of Default 63
Sec.7.2 Default Remedies; Exculpation 64
Sec.7.3 Termination 67
ARTICLE EIGHT NOTICES
Sec.8.1 Notice 70
Sec.8.2 Disbursement Submissions 71
ARTICLE NINE GENERAL CONDITIONS AND COVENANTS
Sec.9.1 Conflict of Interests 72
Sec.9.2 No Liability of Individuals 73
Sec.9.3 Anti-Boycott Provisions 73
Sec.9.4 Governing Law 74
Sec.9.5 Liability of EDC 74
Sec.9.6 Amendments 76
Sec.9.7 Successors and Assigns 76
Sec.9.8 Assignment of Funds 76
Sec.9.9 Counterparts 76
Sec.9.10 Interpretation 76
Sec.9.11 Indemnity 77
Sec.9.12 No Agency 78
Sec.9.13 Venue 78
Sec.9.14 Investigations; Cooperation 80
Sec.9.15 Intentionally Omitted 88
Sec.9.16 Maximum Interest Rate 88
Sec.9.17 Captions 88
Sec.9.18 Gender, Etc. 88
Sec.9.19 Assignment by EDC 88
Sec.9.20 Obligations of Newspaper Division 89
-iii-
<PAGE>
Page
ARTICLE TEN AGREEMENT OF THE CITY
Sec.10.1 City's Agreement to Fund EDC 90
Sec.10.2 Valid Agreement of the City 90
Sec.10.3 The Times's Rights Against the City 90
Appendix A - Premises
Appendix B - Whitestone Road
Appendix C - Contractor's Insurance Requirements
Appendix C-1 - Consultant's Insurance Requirements
Appendix D - The Times's Certificate of Good Standing
Appendix E - EDC's Legal Opinion
Appendix F - EDC's Secretary's Certificate
Appendix G - Equal Employment Requirements
Appendix H - Employment Report
Appendix I - Intentionally Omitted
Appendix J - MacBride Principles Rider
Appendix K - Corporation Counsel's Legal Opinion
Exhibit A - Illustrative Scope of Work
Exhibit B - Form List of Contractors
Exhibit C - Investigation Forms
Exhibit D - Intentionally Omitted
Exhibit E - Form Legal Opinion
Exhibit F - Form Certificate of Specimen Signature
Exhibit G - AIA Forms
Exhibit H - W\MBE Plan
Exhibit H-1 - Form Expedited Certification Affidavit
Exhibit I - Form Certification to be Attached to Requisition
-iv-
<PAGE>
FUNDING AGREEMENT #4 dated as of December 15, 1993 between NEW YORK CITY
ECONOMIC DEVELOPMENT CORPORATION ("EDC"), a local development corporation
formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the
State of New York, having its principal office at 110 William Street, New
York, New York 10038, and THE NEW YORK TIMES COMPANY ("The Times"), a New York
State corporation, having its principal office at 229 West 43rd Street, New
York, New York 10036.
PREAMBLE:
WITNESSETH
WHEREAS:
A: The City of New York (the "City"), a municipal corporation of the
State of New York, is the owner in fee of certain real property identified, as
of the date hereof, as Block 4183, p/o Lot 1, Block 4242, p/o Lot 1, Block
4243, p/o Lot 1, Block 4280, p/o Lot 1, Block 4281, p/o Lot 1, Block 4282, Lot
1, Block 4283, Lot 1, Block 4284, Lot 1, Block 4306 p/o Lot 1 and Lot 44,
Block 4307, Lot 1 and p/o Lot 4, Block 4308, Lot 1 and Lot 36, Block 4310, Lot
32, Block 4336, Lot 35 and p/o Lot 50, Block 4337, Lot 62 and p/o Lot 76,
Block 4339, Lot 46 and demapped portions of 25th Avenue, 28th Avenue, 138th
Street and 139th Street, on the Tax Map for the Borough of Queens, in the
County of Queens, City and State of New York, and assigned new tentative tax
block and lot numbers Block 4282, Lot
-1-
<PAGE>
100 for future identification, as such property is more particularly described
in Appendix A attached hereto and made a part hereof (the "Premises); and
B: The City, as landlord, and EDC, as tenant, entered into a lease
dated as of the date hereof, which lease was assigned by EDC to The Times
pursuant to an Assignment and Assumption of Lease with Consent dated as of
the date hereof (the lease as so assigned, and as the same may hereafter be
amended, is hereinafter referred to as the "Lease"), demising the Premises for
the Project (as hereinafter defined), and for which Lease EDC will act as the
City's managing agent pursuant to Article 42 of the Lease; and
C: EDC and The Times entered into a funding agreement dated as of the
date hereof, which provides for the funding to The Times of City capital
budget dollars necessary to pay for certain site preparation work required in
connection with the construction of the Project (such funding agreement,
together with any amendments that may be made thereto, is hereinafter
collectively referred to as "Funding Agreement #1"); and
D: In connection with the Lease, The Times has the option to perform
the work necessary to reconstruct, in accordance with New York City Department
of Transportation standards, on behalf of the City, the Whitestone Expressway
Service Road between 20th Avenue and Linden Place (the "Whitestone Road"), a
City street running along the easterly side of the Premises and along the
easterly side of the premises adjacent to the Premises currently owned by the
United States Postal Service (the "Construction Site"), as such street is more
particularly depicted in Appendix B attached hereto (the "Improvements"); and
-2-
<PAGE>
E: The construction of the Improvements is a necessary prerequisite
element to the completion of the Project; and
F: If The Times elects to reconstruct the Whitestone Road in
accordance with its option, EDC and the City will make available to The Times
a portion of the City capital budget funds made available under Funding
Agreement #1, to pay for costs incurred by The Times in connection with the
performance of the Work (as hereinafter defined); and
G: The City and EDC have entered into an Amended and Restated
Contract dated as of June 30, 1993, as amended (the "Consolidated Contract")
pursuant to which the City will provide EDC with City capital budget funds for
use in connection with the construction of the Project in accordance with
Funding Agreement #1, a portion of which such funds (as more particularly set
forth herein), in an amount not to exceed $3,750,000 (the "Funding"), may be
reallocated hereunder for use in connection with the reconstruction of the
Whitestone Road, and pursuant to which EDC is authorized to contract with The
Times to perform the Work; and
H: The Times, independently, and not as agent of the City or EDC, has
agreed that if it exercises its option to reconstruct the Whitestone Road it
will perform, or cause the performance of, the Work; and
I: In furtherance of its obligations under the Consolidated Contract
and its corporate purpose of fostering economic development in the City, EDC
has agreed, subject to the terms, conditions and limitations set forth herein,
to disburse to The Times the
-3-
<PAGE>
Funding, in an amount not to exceed $3,750,000, for the purpose of financing
the Eligible Costs of the Work.
NOW, THEREFORE, EDC and The Times covenant and agree as follows:
DEFINITIONS
-----------
As used in this Funding Agreement, the following initially capitalized
terms shall have the respective meanings indicated opposite each of them:
"Actual Road
Reconstruction
Commencement Date" The date on which The Times actually commences the
reconstruction of the Whitestone Road.
"Affiliate" Any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or
is under common control with, The Times. For purposes
hereof, the term "control" means the possession,
directly or indirectly, of the power to direct or
cause the direction of the management and policies of
The Times through the ownership of voting securities,
by contract, or otherwise. Ownership of or by The
Times includes beneficial ownership effected by
ownership of intermediate entities. An "Affiliate" of
a Person other than The Times shall be determined
using the same standard of control and ownership set
forth herein with respect to The Times. Unless the
context otherwise requires, any reference to an
"Affiliate" in this Agreement shall be deemed to refer
to an Affiliate of The Times.
"Agreement" This Funding Agreement, and any amendments thereto.
"Anticipated
Road Reconstruction
Commencement Date" As defined in Sec.1.1(b).
-4-
<PAGE>
"Approvals" As defined in Sec.1.1(c)(2).
"Builder's Pavement
Plan" The plans and drawings with respect to
improvements to sidewalks, curbs and roadways
within the public right-of-way adjacent to the
Premises, approved by DOT's Office of Builder's
Pavement and submitted by The Times to the
City's Department of Buildings as part of its
plans for the construction of the Project.
"Builder's Pavement
Plan Work" As defined in Sec.1.1(a).
"Business Day" Any day other than a Saturday, Sunday, legal holiday,
or a day on which banking institutions in New York
City are authorized by law or executive order to
close.
"Certificate of
Occupancy" The earlier to be issued by the City's
Department of Buildings (or its successor in
function) of a temporary or permanent
certificate of occupancy or its equivalent with
respect to the Project.
"City" As defined in Recital A of the Preamble.
"College Point Improvement
Fund Payments" As defined in Section 3.09(b)(iii) of the Lease.
"Commissioner" As defined in Sec.9.14(a).
"Completed Cover
Sheet" As defined in Sec.4.1.
"Consolidated
Contract" As defined in Recital G of the Preamble.
"Construction
Contract" (A) Any agreement executed by The Times and the
Resident Engineer (as hereinafter defined), if any,
with respect to construction management and
supervision services and engineering services; or (B)
any contract between The Times and the General
Contractor (as hereinafter defined), if any,
-5-
<PAGE>
under which the General Contractor is obligated to
perform the Construction Work; or (C) any contract
with a contractor for performance of all or any part
of the Construction Work, whether entered into by The
Times, the General Contractor, the Resident Engineer,
or the Construction Manager (as hereinafter defined).
"Construction Manager" Lehrer McGovern Bovis, Inc. or any other construction
manager selected by The Times, reasonably approved by
EDC, responsible solely for the performance of
construction management services and/or construction
contract administration services and supervision
services relative to the Construction Work.
"Construction Site" As defined in Recital D of the Preamble.
"Construction
Work" The portion of the Work the costs of which are
considered hard costs of construction under normal
industry standards, excluding the services of the
Resident Engineer and the services of the Construction
Manager, if any.
"Consultant" Any professional engineer, engineering firm,
architectural firm with engineering expertise,
combined practice or association licensed in the
State of New York, and any special consultants
(e.g. soil consultants) selected by The Times
and reasonably approved by EDC, to perform the
Design Services (as hereinafter defined).
"Contract Price" The contract price (or the aggregate of the contract
prices) for the performance of the Construction work,
as set forth in the bid or bids of the Contractor or
Contractors selected by The Times in accordance with
Sec.1.2(c) hereof, to perform the Construction Work.
"Contractor" Any contractor under a Construction Contract.
"DBS" As defined in Sec.6.11(b).
"DEP" The City's Department of Environmental Protection, or
its successor in function.
-6-
<PAGE>
"Department of
Investigation" As defined in Sec.9.14(a).
"Deputy Mayor" As defined in Sec.9.14(a).
"Design Contract" Any agreement executed by The Times and the Consultant
with respect to the performance of Design Services in
connection with the design of the Improvements.
"Design Costs" The costs paid or payable by The Times to the
Consultant for the performance of Design Services, as
set forth in clause (iii) of the definition of
Eligible Costs.
"Design Services" The design and engineering services relative to the
Work and performed by the Consultant.
"DLS" The Division of Labor Services of the City's
Department of Business Services, or its successor in
function.
"DOT" The City's Department of Transportation, or its
successor in function.
"EDC" As defined in the first paragraph of this Agreement.
"EDC Default Notice" As defined in Sec.9.5(b).
"EDC Disagreement
Notice" As defined in Sec.2.1(a).
"EDC Disagreement Notice
Dispute Period" As defined in Sec.2.1(a).
"Eligible
Costs" (i) The costs of the Work paid or payable by The Times
to Contractors (other than the Resident Engineer),
subcontractors, suppliers and material persons for (A)
labor and materials utilized in connection with the
Construction Work, and (B) for labor, services,
facilities or equipment customarily considered as
"general conditions" items which are reasonably
required by or consequent upon the Construction Work,
including (x) all costs of contract bonds and of
insurance that may be required
-7-
<PAGE>
or necessary during the period of and for performance
of the Construction Work, (y) all costs of obtaining
and maintaining the guaranties, if any, and (z) all
costs of obtaining and maintaining the security
services required by Sec.1.1(e)(ii) of this Agreement
that are obtained by Contractors and subcontractors
(other than the Resident Engineer) and are included in
their respective contract prices together with those
costs described in (i)(A) above, (ii)(A) the costs
paid or payable by The Times to the Resident Engineer,
including the Resident Engineer's fee, those costs
incurred by the Resident Engineer for the performance
of construction management and supervision services
and/or engineering services, and all "general
condition" items and other reimbursable expenses
(including without limitation, the preparation of a
Final Survey (as hereinafter defined)), and (B) costs
paid or payable by The Times to the Consultant with
respect to Design Services (the aggregate of the costs
set forth in clauses (ii)(A) and (ii)(B) above are
hereinafter referred to as "Soft Costs"), in an amount
not to exceed twenty-three percent (23%) of the Hard
Costs (as hereinafter defined); provided, however that
the amount of Soft Costs includable in Eligible Costs
may exceed twenty-three percent (23%) of the Hard
Costs if such greater amount is commercially
reasonable taking into account the nature and the
scope of the Work and only if such greater amount is
approved by EDC, which approval shall not be
unreasonably withheld or delayed after the submission
by The Times to EDC of all information reasonably
requested by EDC to establish the scope of such Soft
Costs and the basis for their exceeding twenty-three
percent (23%) of the Hard Costs. In no event shall
Eligible Costs include the costs or fees paid or
payable by The Times to the Construction Manager.
"Entity" As defined in Sec.9.14(a).
"Events of
Default" Those events set forth in Sec.7.1.
"Federal Courts" As defined in Sec.9.13.
-8-
<PAGE>
"Final Acceptance Date" Means the date on which all of the following shall
have occurred: (i) the Resident Engineer or the
Construction Manager shall have certified to EDC that
the Construction Work (including all Substantial
Completion Punch List (as hereinafter defined) items)
is complete (except to an immaterial extent) in
accordance with the Final Plans and Specifications,
and the Requirements, and (ii) EDC and/or its
professional consultants shall have inspected the
Construction Site, within thirty (30) days after EDC's
receipt from the Resident Engineer or the Construction
Manager of the certification described in clause (i)
above, and certified, by the later to occur of the
expiration of such thirty (30) day period or five (5)
days after such inspection was completed, to The Times
that, in its opinion, the Improvements are complete
(except to an immaterial extent) in accordance with
the Final Plans and Specifications, which
certification shall not be unreasonably withheld;
provided, however, that if EDC and/or its professional
consultants shall have failed to inspect the
Construction Site within the thirty (30) day period
described above and to give the certification within
the time period described above, EDC shall be deemed
to have inspected the Construction Site and certified
to The Times that the Improvements are complete.
"Final
Completion" Means that each of the following shall have occurred:
(A) the Resident Engineer or the Construction
Manager shall have issued to EDC a "Certificate
of Payment", or certified its approval of a
"Certificate of Payment" issued to EDC, in
either case stating that it has examined the
Final Plans and Specifications and, in its best
professional judgment, after diligent inquiry,
and on the basis of its observations and
inspections, the Construction Work has been
completed (except to an immaterial extent) in
accordance with the Final Plans and
Specifications and all Requirements and that the
final payment is due to The Times;
(B) the Reviewing Parties (i) shall have made a
final inspection of the Construction Site upon
receipt of
-9-
<PAGE>
notice from The Times that the Construction Work
is Substantially Completed (as hereinafter
defined) and (ii) shall have certified the
Construction Work, including all items on the
Final Punch List, as being acceptable and
complete;
(C) The Times shall have submitted to EDC a final
accounting, containing an affidavit that all
payrolls, bills for materials and equipment, and
other indebtedness connected with the
Construction Work for which The Times may in any
way be responsible (other than items, if any,
disputed in good faith by The Times that are not
being paid for by the Funding including, without
limitation, the Construction Manager's costs and
fees), either have been paid or otherwise
satisfied or will be paid simultaneously with or
immediately after the receipt of the proceeds of
any disbursement of the Funding for which Final
Completion is required;
(D) The Times shall have submitted to EDC receipts,
releases and waivers of liens, or such other
documentation establishing payment or
satisfaction of all obligations arising out of
the Construction Work performed, or caused to be
performed, by The Times (other than items, if
any, disputed in good faith by The Times that
are not being paid for by the Funding including,
without limitation, the Construction Manager's
costs and fees), to the extent and in such form
as may be reasonably designated by EDC. If any
lien for any work done by or on behalf of The
Times has attached to the funds forming a part
of the Funding, The Times shall have either
removed or bonded such lien;
(E) The Times shall have delivered to EDC two sets
of the "as-built" drawings, in form customarily
prepared for road construction (which "as-built"
drawings shall include the Final Survey), for
the Improvements, as the same may have been
amended, modified or supplemented, and such
other documentation as may be required by the
Reviewing Parties or as may be necessary to
evidence that the Construction Work performed,
or caused to be
-10-
<PAGE>
performed, by The Times was completed in
accordance with the Requirements. These
drawings shall accurately show any deviations
from the Final Plans and Specifications and the
exact locations of any underground or otherwise
concealed utilities and appurtenances (if, and
to the extent, that such utilities and
appurtenances were installed, adjusted or
protected in the course of the performance of
the Construction Work) as referenced to
permanent surface improvements; and
(F) receipt by EDC of notification from DLS that all
labor requirements applicable to the Work have
been fulfilled.
"Final Completion
Notice" As defined in Sec.2.1(a).
"Final Completion
Notice Dispute Period" As defined in Sec.2.1(a).
"Final Penalty" As defined in Sec.9.14(f)(ii).
"Final Plans and
Specifications" The completed final drawings and plans and
specifications for the reconstruction of the
Whitestone Road, as developed by The Times and
delivered by The Times to EDC in accordance with
Sec.1.1(c)(1) hereof, and as such drawings and plans
and specifications may be modified or amended from
time to time in accordance with Sec.2.4 of this
Agreement.
"Final Punch
List" A statement by the Resident Engineer or the
Construction Manager issued after Substantial
Completion, setting forth a description in
reasonable detail of any items to be remedied,
corrected or completed in accordance with the
Final Plans and Specifications or any observable
defects and deficiencies, and any other defects
or deficiencies of which the Resident Engineer
or the Construction Manager have knowledge or of
which the Reviewing Parties shall have observed
and notified The Times or its Contractors, with
respect to the Improvements
-11-
<PAGE>
or at or on the Construction Site including, but
not limited to, deficiencies due to
non-compliance with Requirements.
"Final Survey" The final survey to be prepared by a certified
surveyor of curb, gutter and crown elevations in
connection with the Whitestone Road.
"Funding" As defined in Recital G of the Preamble.
"Funding Agreement #1" As defined in Recital C of the Preamble.
"Funding Agreement #2" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of City capital budget dollars necessary
to pay for the construction of a City sanitary sewer
system to service the Premises, as such agreement may
be amended from time to time.
"Funding Agreement #3" The funding agreement between EDC and The Times dated
as of the date hereof which provides for the funding
to The Times of funds necessary to pay for the
construction of an interim New York City Police
Department evidence vehicle facility, as such
agreement may be amended from time to time.
"General
Contractor" The Times's general contractor, if any,
reasonably approved by EDC, engaged to perform
and manage the Construction Work.
"Governmental
Authorities" The United States of America, the State of New
York, the City and any agency, department,
legislative body, commission, board, bureau,
instrumentality or political subdivision of any
of the foregoing, now existing or hereafter
created, having legal jurisdiction over the
Improvements or the Construction Site or any
portion thereof or any street, road, avenue,
sidewalk or water comprising a part of or
immediately adjacent to the Construction Site.
"Hard Costs" The aggregate of the costs set forth in clauses
(i)(A) and (i)(B) of the definition of Eligible
Costs.
-12-
<PAGE>
"Impositions" As defined in Section 3.09(b)(i) of the Lease.
"Improvements" As defined in Recital D of the Preamble.
"Interim Penalty" As defined in Sec.9.14(f)(i).
"Investigation" As defined in Sec.9.14(a).
"Investigation Forms" As defined in Sec.1.2(d).
"Late Charge
Rate" The Prime Rate (as hereinafter defined) plus one
percent (1%).
"Lease" As defined in Recital B of the Preamble.
"Material Change" A change to the Final Plans and Specifications which,
when aggregated with any previous changes to the Final
Plans and Specifications, would increase the Contract
Price by more than ten percent (10%).
"Members" As defined in Sec.9.14(a).
"MBEs" As defined in Sec.6.11(a).
"New York State
Courts" As defined in Sec.9.13.
"Newspaper Division" As defined in Sec.9.20.
"Owner's
Representative" Any person selected by The Times, reasonably
approved by EDC, to act as The Times's
representative at the Construction Site and
responsible for the supervision of the
Construction Work performed by the General
Contractor and the other Contractors,
subcontractors and material suppliers.
"Parties" EDC and The Times.
"Person" An individual, corporation, partnership, joint
venture, estate, trust, unincorporated association;
any federal, state, county or municipal government or
any bureau, department or agency
-13-
<PAGE>
thereof; and any fiduciary acting in such capacity on
behalf of any of the foregoing.
"Plans and
Specifications" The progress drawings and plans and
specifications for the reconstruction of the
Whitestone Road, as developed by The Times
and/or its Consultant, and approved by the
Reviewing Parties in accordance with Sec.1.1(c)(1)
hereof.
"Premises" As defined in Recital A of the Preamble.
"Prime Rate" The base or prime rate of interest from time to
time charged by Chemical Bank, as such rate is
published by The New York Times newspaper or by
-------------------
The Wall Street Journal if such rate is not
-------------------------
published by The New York Times at the time in
-------------------
question.
"Project" The construction on the Premises of a facility of no
less than approximately 360,000 square feet for the
printing, production and distribution of newspapers
and, at the sole discretion of The Times, other such
buildings and improvements on the Premises as are
permitted pursuant to the terms and provisions of the
Lease, including without limiting the generality of
the foregoing, the expansion of the printing facility
to a size greater than 360,000 square feet.
"Prohibited Person" As defined in Sec.1.2(c)(4).
"Proposed Bidders List" As defined in Sec.1.2(c)(1).
"Public Parties" As defined in Sec.9.11(a).
"Rental" As defined in Article 1 of the Lease.
"Requirements" Any and all laws, rules, regulations, orders,
ordinances, statutes, codes, executive orders,
resolutions and requirements of all Governmental
Authorities currently in force or hereafter adopted
applicable to the Construction Site and/or the Work.
"Requisition Report" As defined in Sec.4.2(a)(ii).
"Resident Engineer" The Consultant or any other professional engineer,
engineering firm, architectural firm with engineering
expertise, combined
-14-
<PAGE>
practice or association licensed in the State of New
York selected by The Times, reasonably approved by EDC
as to the acceptability of such Resident Engineer and
as to the scope of work proposed to be performed by
such Resident Engineer, to act as resident engineer on
behalf of The Times and to perform engineering
services and/or construction contract administration
and supervision services relative to the Work. The
Resident Engineer, if any, shall act on behalf of The
Times and shall be separate and apart from any
engineer acting on behalf of EDC or the City for any
reasons.
"Resident Engineer
Costs" The costs paid or payable by The Times to the
Resident Engineer for the performance of
construction management and supervision services
and engineering services relative to the Work,
as set forth in clause (ii) of the definition of
Eligible Costs.
"Reviewing
Parties" DOT, DEP or their respective designees, including
without limitation, their hired consultants, and any
other Governmental Authority with jurisdiction over
the Work, the Improvements or the Construction Site
and responsible for (i) the issuing of permits or
approvals with respect to the Improvements, or (ii)
ensuring compliance with the Requirements.
"Road Election Notice" As defined in Sec.1.1(b).
"Scope of Work" As defined in Sec.1.1(a).
"Substantial
Completion" or
"Substantially
Complete(d)" Means that the Construction Work shall have been 95%
completed in accordance with the Final Plans and
Specifications and all Requirements, and the Reviewing
Parties are able to inspect the Construction Work and
prepare a Final Punch List.
"Substantial
Completion Date" The date on which the Construction Work shall have
been Substantially Completed.
-15-
<PAGE>
"Substantial Completion
Punch List" The statement by EDC, issued after inspection of
the Construction Site, setting forth a
description in reasonable detail of any items to
be remedied, corrected or completed in
accordance with the Final Plans and
Specifications or any defects or deficiencies
which EDC shall have noted with respect to the
Improvements constructed or caused to be
constructed by The Times, including but not
limited to, defects or deficiencies due to non-
compliance with the Requirements.
"Term" As defined in Sec.3.1.
"The Times" As defined in the first paragraph of this Agreement.
"The Times's Disagreement
Notice" As defined in Sec.2.1(a).
"The Times Indemnitees" As defined in Sec.9.11(b).
"Total Reimbursement
Amount" The amount, determined in accordance with the
procedure therefor set forth in Sec.2.1(a) hereof, of
the total Eligible Costs incurred by The Times in
connection with the design and construction of the
Improvements, which amount shall constitute the total
amount of funds that are to be reallocated from
Funding Agreement #1 to this Agreement in accordance
with Sec.2.1(b) hereof.
"Transaction Documents" As defined in Sec.9.14(a).
"Unavoidable
Delays" Delays caused by (i) strikes, slowdowns, walkouts,
lockouts or other labor troubles, (ii) acts of God,
(iii) catastrophic weather conditions, (iv) inability
to obtain labor or materials due to labor disputes,
(v) court orders enjoining commencement or
continuation of the Work, (vi) enemy action, (vii)
civil commotion, (viii) shortage of fuel, supplies or
labor resulting from governmental declared priorities
in connection with a public emergency, (ix) failure or
defect in the supply of electricity, oil, gas or
water to the Construction Site provided that such
failure or defect is not due to the action or inaction
-16-
<PAGE>
of The Times or its Contractors or subcontractors, (x)
fire, (xi) casualty, (xii) the failure of EDC to
disburse the Funding or any portion thereof in
accordance with the provisions of this Agreement,
(xiii) EDC's unreasonable delay in granting any
approvals required under this Agreement, or (xiv)
other causes not within The Times's control that is
causing a delay in The Times's performance of its
construction obligations hereunder. The Times shall
use its good faith efforts to notify EDC in writing,
stating when such delay commenced, not later than ten
(10) Business Days after The Times has first received
knowledge of the occurrence of any of the foregoing
conditions; provided, however, that The Times's
failure to notify EDC of the occurrence of an event
constituting an Unavoidable Delay shall not affect the
commencement of such delay or otherwise result in the
loss of any benefit or right granted to The Times
under this Agreement.
"WBEs" As defined in Sec.6.11(a).
"W/MBEs" As defined in Sec.6.11(a).
"W/MBE Participation
Dollar Value" As defined in Sec.6.11(c).
"W/MBE Percentage" As defined in Sec.6.11(c).
"W/MBE Plan" As defined in Sec.6.11(a)-14.
"Whitestone Road" As defined in Recital D of the Preamble.
"Work" Work undertaken by or on behalf of The Times for the
purpose of designing and constructing the Improvements
all in accordance with this Agreement and the Final
Plans and Specifications.
-17-
<PAGE>
ARTICLE ONE - THE WORK; PERFORMANCE, PROCUREMENT AND
----------------------------------------------------
CONTRACT REQUIREMENTS
---------------------
Sec.1.1 General Provisions and Provisions Regarding Design and
---------------------------------------------------------------
Construction.
- -------------
(a) The Times's Option to Perform the Work. Pursuant to Article 46 of
---------------------------------------
the Lease, The Times shall, in its sole discretion, have the right (but not
the obligation, except as hereinafter set forth), subject to such conditions
set forth in Sec.1.1(b) below, to elect to reconstruct, on behalf of the City,
the Whitestone Road substantially in accordance with a scope of work (the
"Scope of Work") prepared by The Times in its sole discretion, provided,
however that EDC shall have the right to comment on such Scope of Work
(provided that such comments shall not be binding upon The Times) and further
provided that such Scope of Work shall conform to all DOT standards and
specifications for the construction of City streets and otherwise be approved
by DOT pursuant to DOT's procedures. An illustration of such Scope of Work
(which illustration shall not be binding on The Times) is attached hereto as
Exhibit A. Notwithstanding anything to the contrary contained herein, The
Times acknowledges and agrees that if it does not elect to exercise its option
to reconstruct the Whitestone Road in accordance with the foregoing, The Times
shall nevertheless have the obligation to reconstruct and/or repair such
portion of the Whitestone Road as is required pursuant to its Builder's
Pavement Plan (the "Builder's Pavement Plan Work") and, in such event, shall
not be entitled to the disbursement of the Funding in connection with such
Builder's Pavement Plan Work. If The Times elects to reconstruct the
Whitestone Road,
-18-
<PAGE>
(i) The Times shall have the right to include the Builder's Pavement Plan Work
within the Scope of Work, and (ii) The Times shall perform the Work related to
such reconstruction, and EDC shall disburse to The Times the Funding or any
portion thereof allocable to the Work being performed by The Times, on the
terms and conditions contained in this Agreement.
(b) Notice of Election to Proceed. If The Times elects to exercise its
------------------------------
right to reconstruct the Whitestone Road on behalf of the City in accordance
with Sec.1.1(a) hereof, The Times shall make such election by giving written
notice thereof (the "Road Election Notice") to EDC no later than the date
which is six (6) months prior to the approximate date on which The Times
anticipates that it will commence the reconstruction of the Whitestone Road
(the "Anticipated Road Reconstruction Commencement Date"); provided, however,
that The Times shall have the right to revoke such election at any time prior
to the Actual Road Reconstruction Commencement Date. If The Times elects to
revoke its election in accordance with the foregoing sentence, The Times shall
effect such revocation by giving EDC written notice of such election and upon
EDC's receipt of such notification of election to revoke, this Agreement shall
terminate and thereafter neither Party shall have any rights against or
obligations to the other Party by reason of this Agreement except as otherwise
specifically set forth in this Agreement. The Times acknowledges that if it
revokes its election to reconstruct the Whitestone Road in accordance with the
foregoing, in no event shall EDC be required to disburse the Funding or any
portion thereof to The Times for Work performed, or caused to be performed, by
The Times prior to such
-19-
<PAGE>
revocation (including, without limitation, Design Services). The Road
Election Notice shall specify (i) the Consultant that The Times has selected,
or intends to select, with respect to the design of the Whitestone Road, (ii)
the Anticipated Road Reconstruction Commencement Date, (iii) the Resident
Engineer, Construction Manager, or Owner's Representative that The Times
intends to select with respect to the reconstruction of the Whitestone Road,
and (iv) the Person or Persons on The Times's staff selected by The Times to
be responsible for communicating with EDC regarding the performance and
completion of the Work in connection with the reconstruction of the Whitestone
Road.
(c) Plans and Specifications. (1) If the Times elects to exercise its
-------------------------
right to reconstruct the Whitestone Road, The Times shall design the
Whitestone Road and prepare the Plans and Specifications in connection
therewith in accordance with the Scope of Work prepared in accordance with
Sec.1.1(a) hereof. The Plans and Specifications shall be subject to the review
and approval of the Reviewing Parties and The Times shall deliver to EDC all
Plans and Specifications submitted to the Reviewing Parties for their review
and approval and EDC shall have the right to comment on such Plans and
Specifications (provided that such comments by EDC shall not be binding on The
Times). The Plans and Specifications shall describe all the Work, whether or
not paid in whole, in part or at all with the Funding.
(2) The Times shall obtain, or shall cause its Contractors to
obtain, all appropriate permits, consents, certificates, licenses,
authorizations and approvals necessary for the construction of the
Improvements (the "Approvals"). Upon request of The Times, EDC shall assist
The Times or its Contractors in obtaining such Approvals. The cost of
-20-
<PAGE>
obtaining such permits, consents, certificates, licenses, authorizations and
approvals shall be considered Eligible Costs payable with the Funding if such
costs are included in The Times's Contractors' contract price.
(3) Any changes required to be made to the Final Plans and
Specifications shall be made in accordance with the terms and conditions set
forth in Sec.2.4 hereof.
(d) Right to Proceed. The Times may only proceed with the
-------------------
Construction Work if and only if (i) all Approvals necessary for the
construction of the Improvements have been obtained, (ii) certificates, in
form and substance reasonably satisfactory to EDC, evidencing the insurance
policies referred to in Appendix C and Appendix C-1 (as applicable), naming
the City and EDC as additional insureds, providing not less than thirty (30)
days notice of cancellation to the City and EDC and, if the certificates of
insurance described above do not indicate thereon the receipt of due and
payable premiums, proof of payment of such premiums, shall have been obtained
and delivered to EDC, and (iii) all other Requirements have been complied
with, it being expressly agreed that The Times shall bear the entire risk of
constructing the Improvements in variance with the Final Plans and
Specifications and that EDC will not be obligated to disburse any of the
Funding before all Approvals have been obtained and all conditions to
disbursement under this Agreement have been satisfied. The fact that EDC has
approved the Final Plans and Specifications, or any other action or failure to
act by EDC or the Reviewing Parties, shall in no way constitute a
representation that all applicable Requirements have been complied with or
relieve The Times of its obligations to abide by the terms of this Agreement.
-21-
<PAGE>
(e) Performance of the Work. (i) The Times covenants and agrees to
-------------------------
cause the Improvements to be constructed in accordance with the requirements
of this Agreement and with the Final Plans and Specifications and all
applicable Requirements. The Times shall obtain all final acceptances from
the appropriate Reviewing Parties as necessary to complete the Improvements.
(ii) At all times during the performance of the Construction
Work, The Times shall maintain, or cause to be maintained, the Construction
Site in a neat and orderly condition and shall protect the Construction Site
against deterioration, loss, damage or theft.
(f) Site Inspections. Subject to the provisions of Sec.9.11(b) hereof,
The Times shall permit EDC and the Reviewing Parties, their agents, employees
and/or professional consultants to make inspections of the Construction Site
during normal business hours or otherwise when Construction Work is in
progress, at reasonable times and upon reasonable notice to The Times and in
accordance with applicable safety standards, (i) with respect to EDC, as it
deems necessary to observe compliance with and performance under this
Agreement, and (ii) with respect to the Reviewing Parties, as are normally
made by the City and its agencies in the course of a project or projects of
similar nature and magnitude to the Work. Such inspection shall not require
the uncovering of any work unless specifically requested in writing by EDC or
the Reviewing Parties. If EDC requested the uncovering of the work and the
work that has been uncovered is determined to have been performed in
accordance with the Final Plans and Specifications and the Requirements,
EDC shall pay the costs associated with the uncovering requested by EDC;
if the work that has been
-22-
<PAGE>
uncovered is determined to be unacceptable because it was not performed in
accordance with the Final Plans and Specifications or the Requirements, The
Times shall pay the costs associated with the uncovering. EDC shall use its
good faith efforts to cause such inspection to be made in a manner that will
not interfere with the progress of the Work. A representative of The Times
shall, if available, accompany the person or persons making such inspection on
behalf of EDC or the Reviewing Parties, unless The Times elects to forego such
right. The Times shall cause a complete set of the Final Plans and
Specifications, as then in effect, and shop drawings to be maintained at the
Construction Site or at the Premises for inspection by EDC, the Reviewing
Parties and each of their respective employees, consultants and agents. The
omission or failure of EDC or the Reviewing Parties or any representative
thereof to make such inspections, to identify any defects or to notify The
Times of any observable defects or any non-compliance with the terms of this
Agreement or the Final Plans and Specifications, shall in no way relieve The
Times of its obligations under this Agreement or impose any liability upon
EDC, the Reviewing Parties, or any of their respective employees, consultants
and agents.
(g) Completion.
-----------
(1) The Times shall notify EDC of the date the Construction Work shall
have been Substantially Completed. EDC shall have ten (10) Business Days
after the giving of the notice referred to in the preceding sentence to
inspect the Improvements and notify The Times in writing of its acceptance of
The Times's determination of Substantial Completion or to notify The Times in
writing of specific objections which it believes renders the
-23-
<PAGE>
Construction Work not Substantially Completed and prepare the Substantial
Completion Punch List, if necessary, and deliver the same to The Times within
such ten (10) Business Day period. The Times shall Substantially Complete
those items of the Work, if any, specified in EDC's notice as not
Substantially Complete or otherwise in the Substantial Completion Punch List.
(2) After EDC's acceptance of The Times's determination of Substantial
Completion, The Times shall cause the Resident Engineer or the Construction
Manager to prepare a Final Punch List. Such Final Punch List shall be
prepared after inspection of the substantially completed Improvements by the
Reviewing Parties and shall incorporate those items determined by such
Reviewing Parties to be necessary for Final Completion of the Construction
Work.
(3) The Times shall use its good faith efforts to cause Final
Completion to occur as soon as reasonably possible after Substantial
Completion and, to the extent reasonably achievable, shall complete all items
on the Final Punch List within ninety (90) days after the Substantial
Completion Date.
Sec.1.2 Procurement of Bids, Services and Goods
---------------------------------------
(a)(1) If The Times elects to reconstruct the Whitestone Road as
provided in Sec.1.1(a) hereof, The Times shall enter into a Construction
Contract or Construction Contracts and a Design Contract or Design Contracts
independently and not as agent of the City or EDC for the performance of the
Construction Work in accordance with the Final
-24-
<PAGE>
Plans and Specifications and for the performance of the Design Services, so as
to facilitate the construction of the Improvements.
(2) Any Design Contract entered into by The Times in accordance
herewith shall provide solely for the performance of Design Services in
connection with the reconstruction of the Whitestone Road and shall be
separate and apart from any other contract entered into by The Times for the
performance of design services in connection with the Project.
(3) Any Construction Contract entered into by The Times (and any bid
packages prepared by The Times for the bid of the Construction Work) shall
instruct the Contractors (or bidders, as appropriate) as follows: title to the
Construction Site and the Improvements shall be and vest in the City.
Materials to be incorporated into the Construction Site shall, effective upon
their purchase and at all times thereafter, constitute the property of the
City and upon incorporation of such materials into the Construction Site title
thereto shall be and continue in the City. In accordance therewith, purchases
of tangible personal property by the Contractors arising in connection with
the construction of the Improvements are exempt from the payment of certain
sales and compensating use taxes to the extent that such property (i) is used
to alter, maintain or improve, and becomes an integral component part of, the
Construction Site, or (ii) remains tangible personal property and is installed
on the Construction Site. This exemption does not apply to tools, machinery,
equipment or other property leased by The Times or its Contractors, or to
supplies, materials or other property which are consumed in the course of
construction or for any other reason not incorporated into the Construction
Site.
-25-
<PAGE>
(b) The Times shall have the right to enter into Design Contracts with
a Person or Persons selected by The Times in its sole discretion; provided
however, that any such Person shall be subject to EDC's prior written approval
solely as to whether such Person is a Prohibited Person. Prior to letting any
Design Contract, The Times shall submit to EDC by hand delivery, registered or
certified mail, or national overnight courier service, a statement as to the
Person or Persons with whom The Times intends to enter into a Design Contract.
EDC shall advise The Times, within fifteen (15) Business Days after receipt of
such statement, whether any such Person or Persons is a Prohibited Person. If
EDC fails to so advise The Times within such fifteen (15) Business Day period
as to whether any such Person or Persons is a Prohibited Person, such Person
shall be deemed not to be a Prohibited Person. Notwithstanding anything to
the contrary contained herein, once The Times has entered into a Design
Contract or Design Contracts with a Person or Persons based on EDC's advice
that such Person or Persons are not Prohibited Persons (or EDC's failure to
notify The Times within the fifteen (15) Business Day period described above
that such Person or Persons are Prohibited Persons), The Times shall in no
event be required to terminate such Design Contract or Design Contracts even
if EDC thereafter determines that such Person or Persons were, or had become,
Prohibited Persons and the rights of The Times and EDC under this Agreement
shall be unaffected and remain in full force and effect as if such Person or
Persons were not, or had not become, Prohibited Persons.
(c)(1) Prior to letting any Construction Contract to be entered into
directly by The Times or by The Times's Construction Manager, if any, The
Times shall submit to EDC a
-26-
<PAGE>
list of proposed bidders and, to the extent known to The Times, identify the
principals of the bidders (the "Proposed Bidders List"). EDC shall advise The
Times in writing within fifteen (15) Business Days after receipt of the
Proposed Bidders List, as to which bidders on the Proposed Bidders List are
acceptable or unacceptable and, if any bidders are unacceptable, the specific
reasons therefor. EDC may also advise The Times, within such fifteen (15)
Business Day Period, of additional bidders that it proposes that The Times
include on the Proposed Bidders List. If EDC fails to provide such advice
within such fifteen (15) Business Day Period, all of the bidders on the
Proposed Bidders List shall be deemed approved. For purposes hereof, any
bidder other than a bidder that is a Prohibited Person or has received a
negative contractor evaluation from EDC or the City within the five (5) years
prior to the date of the Proposed Bidders List, shall be deemed acceptable to
EDC. The Times shall obtain proposals from at least six (6) qualified bidders
from the list of acceptable bidders and if EDC has proposed additional bidders
to be included on the Proposed Bidders List as provided above, at least three
(3) of such six (6) qualified bidders shall be bidders proposed by EDC (or if
EDC has proposed less than three (3) bidders, then the qualified bidders shall
include all the bidders proposed by EDC). The Times shall submit to EDC by
hand delivery, registered or certified mail, or national overnight courier
service, a bid summary, analysis and statement as to which bidder The Times
intends to select, which statement shall be certified by The Times and give
specific reasons for The Times's preference. The Times shall not accept a bid
which is not the lowest bid without EDC's prior written approval. EDC, in its
sole discretion, may (but is not obligated to)
-27-
<PAGE>
either accept a bid which is not the lowest bid if necessary to enable The
Times to achieve the total W/MBE Participation Dollar Value and the total
W/MBE Percentage or, in the alternative, reduce the W/MBE Participation Dollar
Value and the W/MBE Percentage in an amount equal to the portion of the W/MBE
Participation Dollar Value and the W/MBE Percentage that would have been
achieved by accepting such bid. EDC's approval of a bid which is not the
lowest bid shall be deemed given if not denied in writing within ten (10)
Business Days of The Times's written request therefor.
(2) EDC reserves the right, at any time prior to The Times's
acceptance of a bid in accordance with Sec.1.2(c)(1) above, to withdraw its
prior approval of the bidder chosen in the event that EDC shall learn that the
bidder shall have committed any act, or if the bidder shall become the subject
of any investigation or legal proceeding, either or both of which would have
disqualified the bidder from receiving EDC's original approval. Nothing
contained in Sec.1.2(c)(1) or this Sec.1.2(c)(2) shall limit The Times's right
to reject all bids in its sole discretion.
(3) Notwithstanding anything to the contrary contained herein, in the
event that EDC (A) does not approve any bidder selected by The Times, or (B)
withdraws its prior approval of any bidder chosen in accordance with
Sec.1.2(c)(1) above, then The Times shall have the right to revoke its election
to reconstruct the Whitestone Road. Upon The Times's revocation of its
election and reimbursement to EDC of the Funding previously disbursed as
provided in the foregoing sentence, this Agreement shall terminate and
thereafter neither
-28-
<PAGE>
Party shall have any rights against or obligations to the other Party by
reason of this Agreement, except as otherwise specifically set forth in this
Agreement.
(4) For purposes hereof, the term "Prohibited Person" shall mean:
(i) Any Person (A) that is in default or in breach, beyond any
applicable grace period, of its obligations under any
material written agreement with EDC or Landlord, or (B) that
directly or indirectly controls, is controlled by, or is
under common control with a Person that is in default or in
breach, beyond any applicable grace period, of its
obligations under any material written agreement with EDC or
Landlord, unless, such default or breach has been waived in
writing by EDC or Landlord, as the case may be.
(ii) Any Person (A) that has been convicted in a criminal
proceeding for a felony or any crime involving moral
turpitude or that is an organized crime figure or is reputed
to have substantial business or other affiliations with an
organized crime figure, or (B) that directly or indirectly
controls, is controlled by, or is under common control with
a Person that has been convicted in a criminal proceeding
for a felony or any crime involving moral turpitude or that
is an organized crime figure or is reputed to have
substantial business or other affiliations with an organized
crime figure.
-29-
<PAGE>
(iii) Any government, or any Person that is directly or indirectly
controlled (rather than only regulated) by a government,
that is finally determined to be in violation of (including,
but not limited to, any participant in an international
boycott in violation of) the Export Administration Act of
1979, as amended, or any successor statute, or the
regulations issued pursuant thereto, or any government that
is, or any Person that, directly or indirectly, is
controlled (rather than only regulated) by a government that
is subject to the regulations or controls thereof.
(iv) Any government, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a government,
the effects or the activities of which are regulated or
controlled pursuant to regulations of the United States
Treasury Department or executive orders of the President of
the United States of America issued pursuant to the Trading
with the Enemy Act of 1917, as amended.
(v) Any Person that is in default in the payment to the City of
any real estate taxes, sewer rents or water charges
totalling more than $10,000, (or any person that directly
controls, is controlled by, or is under common control with
a Person in such default), unless such default is then being
contested in good faith in accordance with the law.
(vi) Any Person (A) that has owned at any time during the three
(3) years immediately preceding a determination of whether
such Person is a
-30-
<PAGE>
Prohibited Person any property which, while in the ownership
of such Person, was acquired by the City by in rem tax
foreclosure, other than a property in which the City has
released or is in the process of releasing its interest
pursuant to the Administrative Code of the City or (B) that,
directly or indirectly controls, is controlled by, or is
under common control with such a Person.
(d) The Times shall provide EDC with a list of all Contractors, other
than suppliers, whose Contract amount totals more than $100,000, on the form
attached hereto as Exhibit B. The Times will furnish each Contractor, other
than a supplier, whose Contract amount totals more than $100,000, with a
subcontractor questionnaire in the form attached hereto as Exhibit C and/or
such other qualification and background investigation form(s) as may be used
by the City at such time ( collectively, "Investigation Forms") provided by
EDC to The Times, and shall use its good faith efforts to cause each such
Contractor to fill out and complete the Investigation Forms in a timely
fashion but in no event later than the completion of the work performed by
such Contractor pursuant to its Contract.
(e) All Construction Contracts, in order to be eligible for
disbursement under this Agreement, shall provide, in substance:
(1) that the Contractor shall obtain and maintain comprehensive
general liability insurance and other insurance in the amounts and
in accordance with the applicable provisions set forth in Appendix
C;
-31-
<PAGE>
(2) that neither the Contractor nor any of its employees or
subcontractors is or shall be deemed to be an agent, servant,
employee or contractor of the City or EDC by virtue of this
Agreement or by virtue of any approval, permit, license, grant,
right or other authorization given the City, EDC or any of their
respective officers, officials, directors, members, agents or
employees; and that the Contractor shall not commence any legal
proceeding against the City or EDC to recover any compensation
which may be payable under the Construction Contract;
(3) that the Contractor is solely responsible for the work, direction,
compensation and personal conduct of its employees and
subcontractors;
(4) that the Contractor shall indemnify and hold harmless the City,
EDC and their respective agents, officers, directors, officials,
members and employees from any and all claims, judgments or
liabilities to which they may be subject because of any act or
omission of the Contractor or its respective agents, officers,
directors, employees or subcontractors arising out of or in
connection with the pertinent Construction Contract or because of
any negligence, fault or default of the Contractor or its
respective agents, employees, officers, directors or
subcontractors (as the case may be);
(5) that the Contractor shall maintain accurate, readily auditable
records and accounts with supporting documentation, in accordance
with Accounting Principles, of all work performed, and receipts
and expenditures made, in
-32-
<PAGE>
connection with the pertinent Construction Contract, and that the
Contractor shall make such records and accounts available to EDC,
the City and each of their respective agents and employees, for
inspection and audit at reasonable times and upon reasonable
written notice for a period of six (6) years after completion of
the pertinent Construction Contract;
(6) provisions incorporating the requirements of Sec.6.5(a) (Compliance
with Applicable Law) and Sec.9.1 (Conflict of Interests); and
(7) that the Contractor represents and warrants, and shall cause its
subcontractors and material suppliers to represent and warrant,
that state and local sales tax has been excluded from the contract
price, to the extent applicable; provided, however, that the
Contractor and its subcontractors and material suppliers shall be
responsible for and pay any and all applicable taxes, including
sales and use taxes, imposed upon leased tools, machinery,
equipment, and upon all supplies and materials and other property
which are consumed in the course of construction or for any other
reasons not incorporated into the Construction Site.
(f) All Design Contracts, in order to be eligible for disbursement
under this Agreement, shall:
(1) provide, in substance that the Consultant shall obtain and
maintain comprehensive general liability insurance and other
insurance in the amounts
-33-
<PAGE>
and in accordance with the applicable provisions set forth in
Appendix C-1; and
(2) contain substantially the same provisions as the provisions
described in Sec.1.2(e)(2), (3), (4), (5) and (6) hereof.
(g) Any proposed changes or amendments to a Construction Contract or
Design Contract which affect the provisions to be included in such
Construction Contract pursuant to Sec.1.2(e) hereof, or the provisions to be
included in such Design Contracts pursuant to Sec.1.2(f) hereof, shall not be
made unless approved in writing by EDC, which approval shall not be
unreasonably withheld and shall be deemed given unless denied in writing
within five (5) Business Days after EDC's receipt of The Times's written
request for such approval, and no Funding shall be disbursed in respect of any
Work affected by any such change or amendment unless approved in writing or
deemed approved by EDC.
(h) In addition to the provisions required to be included in the
Construction Contracts and Design Contracts pursuant to Sec.1.2(e) and
Sec.1.2(f) hereof, The Times may include in the Construction Contracts (and
the bid packages therefor) and the Design Contracts such other provisions as
The Times deems necessary to incorporate the requirements of this Agreement
therein, including without limitation, that the Contractor or Consultant
shall not receive payment under its Construction Contract or Design
Contract, as applicable, until all the conditions for disbursement described
in Article 4 hereof have been satisfied and The Times has received payment
of the Funding from EDC under this Agreement.
-34-
<PAGE>
Sec.1.3 Liaison to EDC
--------------
The Times agrees that it will notify EDC, in writing, prior to the
commencement of any Work, of the Person or Persons on The Times's staff
primarily responsible to communicate with EDC regarding the performance of the
Work, to be available to the extent reasonably required by EDC in connection
with this Agreement. The Times further agrees to use its good faith efforts
to notify EDC in writing of any intended substitution of said Person or
Persons at least five (5) days prior to the date such substitution will take
effect but in any event will notify EDC in writing of any such substitutions
on the day such substitution will take effect.
-35-
<PAGE>
ARTICLE TWO - THE FUNDING
-------------------------
Sec.2.1 Determination of Total Reimbursement Amount; Reallocation of
------------------------------------------------------------------
Funding from Funding Agreement #1 to this Agreement. (a) Upon Final
- ---------------------------------------------------------
Completion of the Improvements, The Times shall submit to EDC by hand
delivery, registered or certified mail, or national overnight courier service,
a written notice (the "Final Completion Notice") stating that the Improvements
have been completed in accordance with the terms of this Agreement and setting
forth the total amount of Eligible Costs incurred by The Times in connection
with the design and construction of the Improvements. The Final Completion
Notice shall be accompanied by such documents and materials, more particularly
set forth in Article 4 hereof, not already submitted to EDC in accordance with
Article 4 hereof, in support of its statement of Eligible Costs incurred (the
"Final Requisition Report"). EDC shall advise The Times, within fifteen (15)
days after receipt of the Final Completion Notice (the "Final Completion
Notice Dispute Period"), that it agrees and accepts the Times's determination
of Eligible Costs incurred or that it disagrees with such determination of
Eligible Costs incurred. If EDC fails to notify The Times, within the Final
Completion Notice Dispute Period, of its agreement and acceptance of or
disagreement with The Times's determination, such determination shall be
deemed accepted by EDC and such amount shall be deemed to be the Total
Reimbursement Amount. If EDC accepts The Times's determination of the total
amount of Eligible Costs incurred in connection with the design and
construction of the Improvements, such amount shall be deemed to be the Total
-36-
<PAGE>
Reimbursement Amount. If EDC disagrees with such determination, EDC will
notify The Times in writing, within the fifteen (15) day time period specified
herein, of such disagreement, specifying in a detailed manner the reasons for
such disagreement and what it believes to be the total amount of Eligible
Costs incurred by The Times in connection with the design and construction of
the Improvements ("EDC's Disagreement Notice"). The Times shall advise EDC,
within fifteen (15) days after receipt of EDC's Disagreement Notice (the "EDC
Disagreement Notice Dispute Period"), that it agrees and accepts EDC's
determination or that it disagrees with EDC's determination. If The Times
accepts EDC's determination of the total amount of Eligible Costs incurred in
connection with the design and construction of the Improvements, such amount
shall be deemed to be the Total Reimbursement Amount. If The Times's
disagrees with such determination, The Times will notify EDC in writing,
within the EDC Disagreement Notice Dispute Period, of such disagreement
specifying in a detailed manner the reasons for such disagreement ("The
Times's Disagreement Notice"). If The Times fails to notify EDC within the
EDC Disagreement Notice Dispute Period of its agreement and acceptance or
disagreement of EDC's determination, such determination shall be deemed
accepted by The Times and such amount shall be deemed to be the Total
Reimbursement Amount. Upon EDC's receipt of The Times's Disagreement Notice,
the Parties shall attempt to arrive at a mutually acceptable determination of
the amount of the total Eligible Costs incurred by The Times in connection
with the design and construction of the Improvements, provided however that
that The Times shall have the right to submit to arbitration, in accordance
with the
-37-
<PAGE>
provisions of Article 34 of the Lease, the proper amount of the Total
Reimbursement Amount, taking into account the terms and conditions of this
Agreement and the Lease. The determination in such arbitration of the Total
Reimbursement Amount shall be conclusive and binding upon the parties hereto.
(b) Within four (4) months after the Total Reimbursement Amount is
established in accordance with Sec.2.1(a) hereof, EDC shall obtain such
approvals and perform such acts as may be necessary to cause a portion of the
funds allocated under Funding Agreement #1 to be reallocated under this
Agreement. The Times understands that the total amount of funds that shall be
so reallocated shall be equal to the Total Reimbursement Amount, provided that
in no event shall such amount exceed $3,750,000. The Times further understands
and acknowledges that (i) the funds to be reallocated from Funding Agreement
#1 to this Agreement shall consist solely of such funds allocated under
Funding Agreement #1 to pay for Phase Five Construction (as such term is
defined in Funding Agreement #1) and that The Times shall have no right to
seek the reallocation of funds from Funding Agreement #1 to this Agreement
from any other source of funds under Funding Agreement #1 other than that
allocated for Phase Five Construction, and (ii) once the reallocation of funds
from Funding Agreement #1 to this Agreement occurs, The Times shall have no
further right to seek any additional reallocations.
(c) Notwithstanding anything to the contrary contained herein, in no
event shall EDC be required to disburse the Funding to The Times if the Total
Reimbursement Amount is $650,000 or less.
-38-
<PAGE>
Sec.2.2 Agreement to Fund. (a) Subject to the terms, conditions,
--------------------
representations and warranties contained in this Agreement, EDC agrees to
disburse to The Times, in an amount not to exceed the Funding, and The Times
agrees to accept the Funding, for performance by The Times of the Work. The
Times agrees to utilize the Funding solely in connection with the Work.
Subject to EDC's remedies upon an Event of Default and except as otherwise
provided herein, the Funding, once disbursed under this Agreement, shall not
be subject to any reimbursement whatsoever to EDC.
(b) The Times acknowledges that neither EDC nor the City has
represented or warranted that the Funding will be sufficient to pay for the
entire cost of the Work. The Times agree that The Times will be solely
responsible to the extent that the Eligible Costs of the Work exceed the
amount of the Funding for any reason. The Times acknowledges that the Funding
is not a fee or other compensation earned by or paid to The Times.
Sec.2.3 Disbursements. (a) The Times agrees to accept the Funding and to
--------------
utilize the proceeds thereof solely in connection with the Work. After the
Final Completion of the Work, disbursements shall be made by EDC to The Times
as follows:
(1) With respect to Hard Costs, after receipt by EDC of all items
required by Sec.4.2 hereof, equal to the product of (i) the measurements of
the quantities of items attributable to the Construction Work (as certified by
the Resident Engineer or the Construction Manager) and (ii) the unit price for
each such item;
-39-
<PAGE>
(2) With respect to Resident Engineer Costs, after receipt by EDC of
all items required by Sec.4.2 hereof, equal to the Resident Engineer Costs
calculated based on the Resident Engineer's fee schedule attached to the
Construction Contract with respect to the Resident Engineer;
(3) Intentionally omitted;
(4) With respect to Design Costs, after receipt by EDC of all items
required by Sec.4.2 hereof, equal to the Design Costs calculated based on the
Consultant's fee schedule attached to the Design Contract with respect to the
Consultant.
(b) Intentionally omitted.
(c) All disbursements shall be made by check at the principal office
of EDC, or at such other place within the City of New York as EDC may
designate. Disbursement requests shall be submitted within the time periods
and in the manner provided therefor in Article 4.
(d) No portion of the Funding shall be advanced for materials not
incorporated into the Construction Site.
(e) Disbursements of the Funding shall be made by EDC within four (4)
months after all of the following occurs: (1) EDC receives from The Times a
Final Completion Notice, together with a Final Requisition Report and all such
other documentation as may be required or reasonably requested by EDC, and
(ii) the Total Reimbursement Amount shall have been established in accordance
with Sec.2.1(a) hereof.
-40-
<PAGE>
Sec.2.4 Funding of Costs of Changes
---------------------------
(a) Notwithstanding any provision to the contrary contained in this
Agreement, EDC shall not disburse increased Funding on account of Eligible
Costs covered by changes to the Final Plans and Specifications except as
expressly provided in this Sec.2.4. The Eligible Costs incurred in connection
with all changes made in accordance with Sec.2.4(b) hereof shall be paid for
with the Funding.
(b) Changes. Except as limited in this Sec.2.4, EDC shall disburse the
--------
Funding on account of (i) each change to the Plans and Specifications that is
not a Material Change, provided that the need for such change does not result
from or arise out of an error or omission on the part of The Times or an
Affiliate, any Contractor or subcontractor, and (ii) each Material Change,
provided that, subject to the provisions of Sec.2.4(c) hereof, EDC shall not
be required to disburse the Funding with respect to any material change which
EDC, acting in its reasonable discretion, has disapproved and (y) the need for
such change does not result from or arise out of an error or omission on the
part of The Times or an Affiliate, any Contractor or subcontractor.
(c) Arbitration of Material Changes. The Times shall have the right to
--------------------------------
submit to arbitration, in accordance with the provisions of Article 34 of the
Lease and substantially in accordance with the procedure set forth in Sec.2.1
hereof, whether EDC has acted reasonably in disapproving any Material Change.
The aribtration conducted pursuant to this Sec.2.4(c) shall determine the
portion, if any, of such Material Change that should be included
-41-
<PAGE>
in the Total Reimbursement Amount and such determination shall be binding upon
EDC and The Times.
-42-
<PAGE>
ARTICLE THREE - TERM
--------------------
Sec.3.1 Term. The term of this Agreement (the "Term") shall commence upon
-----
the execution of this Agreement by both Parties and the unconditional delivery
of this Agreement by each Party to the other and shall expire upon the
occurrence of any of the following events: (i) the date on which a
Certificate of Occupancy with respect to the Project is issued if The Times
fails to deliver to EDC a Road Election Notice prior to such date, (ii) the
date on which EDC receives notice from The Times, in accordance with Sec.1.1(b)
hereof, of The Times's revocation of its election to reconstruct the
Whitestone Road, or (iii) if The Times has delivered to EDC a Road Election
Notice and has not revoked such election and has in fact commenced the
Construction Work, then upon the complete disbursement by EDC to The Times of
all amounts payable to The Times pursuant to the terms of this Agreement,
unless sooner terminated by EDC in accordance with this Agreement. All
rights, remedies and liabilities arising prior to the termination or
expiration of the Term shall survive the date of termination or expiration, as
the case may be.
-43-
<PAGE>
ARTICLE FOUR - CONDITIONS FOR DISBURSEMENT
------------------------------------------
Sec.4.1 Initial Submissions by The Times. EDC shall not be obligated to
---------------------------------
disburse any of the Funding to The Times unless, at any time prior to the
Actual Road Reconstruction Commencement Date, EDC shall have received the
following documents, together with a cover sheet (a "Completed Cover Sheet")
listing the items submitted:
(a) a legal opinion by counsel to, or general counsel of, The Times
(addressed to EDC) in the form annexed hereto as Exhibit E, to the
effect that (I) this Agreement is legal, valid and binding upon
and enforceable against The Times in accordance with its terms
(subject, as to enforceability, to principles of equity and
applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), and (II) The Times has been duly
authorized to execute and deliver this Agreement;
(b) a certificate, in the form annexed hereto as Exhibit F, of an
authorized officer of The Times certifying the specimen signature
of each officer, director or agent of The Times authorized to
deliver Requisition Reports under this Agreement;
(c) copies of any then executed Construction Contract(s) and Design
Contracts, containing all the provisions required pursuant to
Sec.1.2(e) and Sec.1.2(f) hereof;
(d) a collateral assignment by The Times to EDC of The Times's right,
title and interest to the Construction Contracts and Design
Contracts, which collateral
-44-
<PAGE>
assignment shall be effective only upon an Event of Default and
the termination of this Agreement; and
(e) as described in Sec.6.12 hereof, a completed and duly executed
W/MBE Plan in the form annexed hereto as Exhibit H.
Sec.4.2 Documentation for Disbursements on Account of Eligible Costs. EDC
-------------------------------------------------------------
shall not be obligated to disburse the Funding unless the following
conditions, in addition to the conditions described in Sec.4.1, shall have
been satisfied:
(a) The following documents, in form and substance reasonably
satisfactory to EDC, together with a Completed Cover Sheet, shall, except to
the extent previously submitted by The Times, be delivered to EDC once a month
commencing on the Actual Road Reconstruction Commencement Date and continuing
until Final Completion:
(i) copies of all Approvals necessary to lawfully perform the
Construction Work for which the Funding is being sought in
accordance with the Final Plans and Specifications;
(ii) a report executed and certified by an authorized representative of
The Times (and addressed to EDC), setting forth: (x) the amount of
funds requested by Contractors and Consultants to be paid in
connection with the performance of the Work for such monthly
reporting period, (y) an itemization of the Eligible Costs for
which such payment is sought, and (z) either (I) a list of
Contractors whose work is covered by the report, indicating the
amount
-45-
<PAGE>
requested with respect to each such Construction Contract, or (II)
that the work covered by the report is Design Services and
indicating the amount requested with respect to such Design
Services, together with a certification by such authorized
representative that the Eligible Costs described in accordance
with (y) above have not previously been paid by The Times to such
Contractors or Consultants. The report shall be accompanied by the
certification described in Sec.6.1 hereof and copies of (I) all
Construction Contracts and/or Design Contracts on account of which
payment is being sought that have not been previously delivered,
containing all the provisions required pursuant to Sec.1.2(e) and
Sec.1.2(f) hereof (or for Construction Contracts and Design
Contracts that have been previously delivered, a statement to that
effect and copies of any amendments thereof); (II) as applicable,
requisitions or applications for payment by the Consultant,
Resident Engineer or the Construction Manager to The Times and
with regard to Design Costs, supporting bills, invoices or other
documentation reflecting such Eligible Costs; (III) as applicable,
a copy of an "Application and Certificate for Payment",
substantially in the forms annexed hereto as Exhibit G, completed
and executed by the Resident Engineer or the Construction Manager
with respect to all work performed by Contractor(s) and covered by
The Times's report, together with a statement of the Resident
Engineer or the Construction Manager addressed to EDC stating the
quantities of materials
-46-
<PAGE>
installed with respect to the Construction Work completed as of the date of
the report and that, to the Resident Engineer's or the Construction Manager's
knowledge, the Construction Work performed by the Contractor(s) and covered by
the report has been performed to the Resident Engineer's or the Construction
Manager's reasonable satisfaction substantially in accordance with the Final
Plans and Specifications; (IV) any change order requests made by the
Contractors to The Times during the reporting period; and (V) at the request
of EDC, in connection with each payment request other than the first payment
request made by Contractors, subcontractors and suppliers of The Times,
partial releases of liens from such Contractors, subcontractors and suppliers
in respect to Construction Work performed under a Construction Contract or
subcontract and for which the Eligible Costs in connection therewith that are
to be reimbursed with the Funding have been paid for by The Times pursuant to
a prior requisition (the items described in this paragraph (ii), collectively,
the "Requisition Report");
(iii) such additional documents, data or information reasonably
requested by EDC with respect to the Construction Site and the
Work or in support of the Requisition Report, including without
limitation, documents as would customarily be required by City
agencies engaged in projects similar in scope to the Work such as
trade payment breakdowns in support of all
-47-
<PAGE>
subcontractors' requisitions to the Resident Engineer,
Construction Manager or General Contractor (as the case may be),
if any, invoices, and receipts; and
(iv) a written statement by DLS certifying that each Contractor
performing Construction Work has complied with the City's equal
employment requirements under mayoral Executive Order No. 50
(April 25, 1980), as amended, if applicable, or evidence from The
Times or DLS that Executive Order No. 50 or its successor does not
apply, it being understood that such written statement or other
satisfaction by DLS for each Contractor only needs to be submitted
at the time of the submission of the first requisition covering
such Contractor's work and it being further understood that,
notwithstanding anything to the contrary contained herein, for so
long as New York State Labor Law Sec.220 or any successor statute
requires contractors performing work on public works projects to
pay journey-level wages to trainees, the trainee requirements of
Executive Order No. 50 shall not be applicable to the Construction
Work, the Contractors and the subcontractors and the Contractors
and the subcontractors shall in no event be deemed to be in
noncompliance with Executive Order No. 50 due to noncompliance
with such trainee requirements.
(b) As of the date of the Requisition Report, (i) the representations
and warranties made in Article Five shall be correct and complete and (ii)
there shall exist no unbonded public improvement lien relating to the Funding;
provided, however, that in the
-48-
<PAGE>
event there exists an unbonded public improvement lien relating to the
Funding, EDC shall continue to disburse to The Times those portions of the
Funding which are otherwise payable hereunder reduced only by the amount of
such unbounded lien.
Sec.4.3 Direction of Submissions. All submissions to EDC pursuant to this
-------------------------
Article Four shall be directed to EDC's Vice President for Construction.
Sec.4.4 Failure to Make Submissions on a Timely Basis. Nothing contained
-----------------------------------------------
herein shall be construed to cause The Times to forfeit all or any portion of
the Funding as the result of (i) its failure to make any submission required
hereunder on a timely basis, or (ii) its failure to provide EDC with the
documents described in this Article 4 (subject to the obligation of The Times
to provide all such documents to qualify for the disbursement of the Funding);
provided, however, that if The Times fails to make submissions on a timely
basis or fails to make complete submissions, then EDC shall have an additional
period of time as may be reasonable, beyond the Final Completion Notice
Dispute Period, to review the Final Requisition Report and the Final
Completion Notice and advise The Times, in accordance with Sec.2.1(a) hereof,
of its agreement and acceptance of, or disagreement with, The Times's
determination of Eligible Costs incurred in connection with the design and
construction of the Improvements.
-49-
<PAGE>
ARTICLE FIVE - REPRESENTATIONS OF THE TIMES
-------------------------------------------
To induce EDC to disburse the Funding, The Times represents and warrants
as follows:
Sec.5.1 Organization; Standing. The Times is a corporation duly organized
-----------------------
and validly existing under the laws of the State of New York and has all
requisite power, authority and legal right to execute, deliver and perform its
obligations under this Agreement. A copy of The Times's certificate of good
standing from the Secretary of State of the State of New York is attached
hereto as Appendix D, and hereby made a part hereof.
Sec.5.2 Intentionally omitted.
Sec.5.3 Conflict, etc. under Other Documents. The execution and delivery
-------------------------------------
of this Agreement by The Times is not, and the performance of this Agreement
by The Times will not be, effectively prohibited or prevented by, or in breach
of (i) the certificate of incorporation or by-laws of The Times, or (ii) to
the best of The Times's knowledge, any presently existing or effective law,
judgment, order, writ, injunction, decree, rule or regulation of any court or
Governmental Authority applicable to The Times, or (iii) any agreement,
instrument or undertaking which is binding on The Times.
-50-
<PAGE>
Sec.5.4 No Litigation. As of the date of this Agreement there are no
--------------
suits or proceedings pending or, to the best of The Times's knowledge,
threatened against The Times which would materially affect the construction of
the Improvements, the consummation of the transactions contemplated by this
Agreement, or the full performance of the obligations of The Times under this
Agreement.
Sec.5.5 Nonrecourse. From and after Final Completion, EDC and the City
------------
shall have no recourse against The Times with respect to the Work. For the
one year period commencing with Final Completion, The Times shall have no
recourse against EDC or the City, with respect to the Work.
-51-
<PAGE>
ARTICLE FIVE-A - REPRESENTATIONS AND WARRANTIES OF EDC
------------------------------------------------------
To induce The Times to enter into this Agreement and perform the Work,
EDC represents and warrants as follows:
Sec.5A.1 Organization; Standing. EDC is a not-for-profit corporation,
------------------------
organized pursuant to Sec.1411 of the New York State Not-For-Profit Corporation
Laws and has all the requisite power, authority and legal right to execute,
deliver and perform its obligations under this Agreement.
Sec.5A.2 Due Authorization; Enforceable Obligations. This Agreement has
--------------------------------------------
been duly authorized, executed and delivered by EDC and constitutes a legally
binding obligation of EDC enforceable in accordance with its terms. A legal
opinion by general counsel of EDC (addressed to The Times) providing that this
Agreement is legal, valid and binding upon and enforceable against EDC in
accordance with its terms (subject, as to enforceability, to principles of
equity and applicable bankruptcy, insolvency and other laws affecting the
rights of creditors generally), is attached hereto as Appendix E and hereby
made a part hereof. A certificate of the Secretary of EDC, dated as of the
date of this Agreement, certifying to the adoption of resolutions by the Board
of Directors of EDC authorizing the execution and delivery of this Agreement
by EDC is attached hereto as Appendix F and hereby made a part hereof.
-52-
<PAGE>
ARTICLE SIX
-----------
COVENANTS
---------
Sec.6.1 Requisitions Update The Times's Representations. The Times
---------------------------------------------------
covenants that each Requisition Report presented to EDC under Article Four
shall be accompanied by a completed certification, in the form attached hereto
as Exhibit I.
Sec.6.2 Compliance with Other Agreements and Law; Legal Status. During the
-------------------------------------------------------
Term, The Times shall:
(a) comply with all of the terms, conditions and covenants now or in
the future binding upon or applicable to The Times under this Agreement;
(b) do all things necessary to maintain and keep in full force and
effect its existence, rights and privileges under the laws of the State of New
York; and
(c) comply with, and do all things reasonably necessary to cause the
Work to be performed in compliance with all Requirements applicable to the
Work and/or the Construction Site.
Sec.6.3 Maintenance of and Compliance with Insurance Requirements. The
------------------------------------------------------------
Times shall maintain or cause to be maintained the insurance coverage
described in Appendix C and Appendix C-1 attached hereto. The Times shall
comply with all of the applicable
-53-
<PAGE>
provisions of such insurance policies. Nothing contained in this Sec.6.3 is
intended to confer any rights upon any third party.
Sec.6.4 Maintenance of Office. The Times will maintain an office in the
----------------------
City of New York where notices with respect to this Agreement may be delivered
to it and inspections and audits in accordance with Sec.6.7 may be conducted.
Sec.6.5 Compliance with Applicable Law. (a) The Times shall include, or
-------------------------------
cause to be included, the following requirements, as applicable, in all
Construction Contracts and all Design Contracts, and shall require, or cause
to be required, all subcontracts with respect to the Construction Work and the
Design Services to include the same requirements, so that the Contractor(s)
and any subcontractors and the Consultant(s) and any subconsultants shall
agree, in substance:
(i) to comply with (1) the applicable provisions of City and New
York State equal employment and affirmative action laws applicable
to construction contractors and non-construction contractors which
are annexed to and made a part of this Agreement as Appendix G
(consisting of "Construction Contract Rider" pursuant to mayoral
Executive Order No. 50, provided, however that the trainee
requirements set forth therein shall be inapplicable for so long
as New York State Labor Law Sec. 220 or any successor statute
requires contractors performing work on public works projects to
pay journey-level wages to
-54-
<PAGE>
trainees), and the filing of any required construction employment
reports with the City's Bureau of Labor Services on the forms
annexed hereto as Appendix H; (2) New York State Labor Law
Sec.220e, and (3) City Administrative Code Sec.6-108;
(ii) to comply with the applicable provisions of the New York
City Noise Control Code (Administrative Code Sec.24-216, as amended,
and related regulations); and
(iii) to pay no less than prevailing wage rates and supplemental
benefits to laborers, workers and mechanics pursuant to Sec.220(3)
of the New York State Labor Law in accordance with the currently
scheduled rates, as amended from time to time.
(b) The Times shall use its good faith efforts to promptly, diligently
and continuously enforce the full and faithful performance by the Contractors
and Consultants with whom The Times enters into Construction Contracts and
Design Contracts hereof with the provisions of law referred to in Sec.6.5(a)
hereof, and shall use its good faith efforts to cause such Contractors and
Consultants to enforce such compliance by the subcontractors and materials
suppliers hired by such Contractors in connection with the Construction Work
and by the subconsultants hired by such Consultants in connection with the
Design Services.
Sec.6.6 Assignment. Without EDC's prior written consent, The Times shall
-----------
not assign this Agreement except that The Times may assign this Agreement to
an Affiliate without
-55-
<PAGE>
EDC's prior written consent, provided that such Affiliate assumes all the
rights and obligations of The Times under this Agreement, and that all the
representations, warranties and covenants made by The Times in this Agreement
shall be similarly made by such Affiliate, and further provided that the Times
provides to EDC a copy of the executed written agreement evidencing such
assignment and assumption.
Sec.6.7 Maintenance of Records. The Times agrees to maintain accurate,
-----------------------
readily auditable records and accounts with supporting documentation, of (i)
all of the costs related to the design and construction of the Improvements,
(ii) all of its receipts and expenditures in connection with the Funding and
with the Work, and (iii) all financial accounts and transactions maintained or
undertaken in connection with this Agreement. The Times shall make such
records available for inspection and audit at The Times's place of business
within New York City by EDC and the City at reasonable times and upon
reasonable advance notice. All such records and accounts shall be maintained
for a period of six years after termination of this Agreement. The provisions
of this Sec.6.7 shall survive the expiration or earlier termination of this
Agreement.
Sec.6.8 Intentionally omitted.
Sec.6.9 Due Application of Funding Proceeds. The Times shall receive and
------------------------------------
hold the proceeds of the Funding (including any insurance proceeds arising out
of any casualty
-56-
<PAGE>
affecting property purchased with the Funding) as a trust fund to be applied
exclusively for the payment of Eligible Costs (or reimbursement to The Times
for the payment of Eligible Costs) in accordance with the terms of this
Agreement and shall not use any part of the same for any other purpose.
Sec.6.10 Defects; Non-Conforming Work. The disbursement of any portion of
-----------------------------
the Funding shall not constitute a waiver of any default by The Times on
account of defective construction work in performance of the Work or deviation
from the Final Plans and Specifications. No part of the Funding shall be
disbursed for the correction of such non-conforming work unless such non-
conforming work was the result of a deviation from the Final Plans and
Specifications necessitated due to unexpected field conditions and was
performed in accordance with good construction practices and EDC approved
(which approval shall not be unreasonably withheld or delayed), in writing,
the performance of such work.
Sec.6.11 Participation by Women and Minority Owned Businesses
----------------------------------------------------
(a) EDC is committed to maximizing meaningful participation by women-
owned business enterprises ("WBEs") and minority-owned business enterprises
("MBEs") (WBEs and MBEs collectively referred to as "W/MBEs") in its
contracting opportunities. Based on its review of the scope of the Work and
the lists of certified W/MBEs maintained by the interested government entities
identified below, EDC estimates that a total aggregate
-57-
<PAGE>
W/MBE percentage of twenty-five percent (25%) can be attained by The Times for
the Work. Accordingly, prior to receipt of any disbursements hereunder, The
Times shall complete a utilization plan (the "W/MBE Plan"), in the form of
Exhibit H attached hereto, describing The Times's plan for participation of
W/MBEs in the Work.
(b) In order to be considered W/MBEs for purposes of inclusion in the
W/MBE Plan submitted by The Times, the WBEs and MBEs identified in the W/MBE
Plan must have received certification, as WBEs and/or MBEs, from the New York
City Department of Business Services ("DBS"). Businesses that have been
certified as being women or minority owned by the New York State Department of
Economic Development or the Port Authority of New York and New Jersey may be
eligible to receive expedited certification from DBS, after completing the DBS
"Expedited Certification Affidavit" in the form of Exhibit H-1 attached
hereto. Each of these entities maintain current lists of certified W/MBEs;
The Times is encouraged to contact these entities in order to obtain copies of
their current lists of certified W/MBEs who may be qualified to participate,
either as Contractors, subcontractors or materials suppliers, in the Work.
Together with submission of the W/MBE Plan, The Times shall submit
verification acceptable to EDC showing that all W/MBEs named in the W/MBE Plan
are certified as WBEs and/or MBEs by DBS prior to the award of the contract
with respect to such Contractor, subcontractor or material supplier.
(c) The Times should use the W/MBE Plan to identify potential W/MBEs
that The Times, the Resident Engineer, the Construction Manager or the General
Contractor
-58-
<PAGE>
intends to employ as Contractors, subcontractors or materials suppliers. The
W/MBE Plan requires the identification of the specific trade and/or the
specific material to be supplied by such W/MBEs. The W/MBE Plan requires that
the level of participation by W/MBEs be described based on (i) a dollar value
estimate of participation by W/MBEs (the "W/MBE Participation Dollar Value")
and (ii) the percentage of the total Funding that will be passed on to W/MBEs
(the "W/MBE Percentage").
(d) The Times shall not be required to utilize the specific W/MBEs
listed in the W/MBE Plan and substitutions may be made; however, The Times
shall provide for the participation of W/MBEs in the Work at a level equal to
or greater than the total aggregate W/MBE Participation Dollar Value and the
total aggregate W/MBE Percentage as each are set forth in the W/MBE Plan. The
W/MBE Participation Dollar Value and the W/MBE Percentage recorded on the
W/MBE Plan are a part of this Agreement. The Times cannot reduce the W/MBE
Participation Dollar Value or the W/MBE Percentage.
(e) If The Times breaches the foregoing obligation relating to the
participation of W/MBEs in the Work, then, as its sole and exclusive remedy
against The Times with respect to such breach, EDC shall be entitled to
withhold from disbursement to The Times a portion of the Funding in the amount
equal to the difference between (i) the W/MBE Participation Dollar Value set
forth in the W/MBE Plan and (ii) the actual W/MBE Participation Dollar Value
achieved by, and in fact paid to participating W/MBEs by or on behalf of, The
Times in respect of the completed Work. No portion whatsoever of any of
-59-
<PAGE>
the Funding that is withheld pursuant to this Sec.6.11(e) shall be charged to
the account of any W/MBEs employed in respect of the Work.
(f) The Times may substitute other certified W/MBEs for those
identified in the W/MBE Plan, but all W/MBEs must be approved by EDC (which
approval shall not be unreasonably withheld) before being employed, either as
Contractors, subcontractors, or as materials suppliers, in respect of the
Work. The Times may also add additional W/MBEs to the W/MBE Plan provided
that neither the W/MBE Participation Dollar Value nor the W/MBE Percentage
falls below that identified in the W/MBE Plan.
Sec.6.12 No Liens. (a) Without EDC's prior written consent, The Times
---------
shall not create, permit or suffer to exist any mortgage, encumbrance, lien,
security interest, claim or charge against the Construction Site.
(b) The Times will cause the Improvements to be constructed free and
clear of liens of mechanics, material persons and suppliers, including public
improvement liens, or claims for any such liens subject to The Times's right
to cause any such lien to be removed or bonded within sixty (60) days after
the placement of such lien. The costs of removing or bonding such lien shall
be paid by The Times except if such lien was placed solely as a result of
EDC's failure to disburse to The Times the Funding in accordance with this
Agreement, in which case EDC shall pay for the costs of removing or bonding
such lien.
Sec.6.13 Intentionally omitted.
-60-
<PAGE>
Sec.6.14 Intentionally omitted.
Sec.6.15 Intentionally omitted.
Sec.6.16 MacBride Principles. The Times hereby agrees that with respect
--------------------
to any Construction Contract entered into for the performance of the
Construction Work and with respect to any Design Contract entered into for the
performance of the Design Services, The Times shall (i) include in such
Construction Contract and Design Contract the requirements of the MacBride
Principles Rider, attached hereto as Appendix J, and shall (ii) require its
Contractors and Consultants (A) to comply with applicable covenants and
representations set forth in Appendix J, and (B) to cause, as applicable, its
contractors, subcontractors, and materials suppliers performing the
Construction Work and its subconsultants performing the Design Services, to
also comply with the requirements of Appendix J. Notwithstanding anything to
the contrary contained herein, the provisions of this Sec.6.16 shall not apply
to any contractor, subcontractor, materials supplier, consultant or
subconsultant with respect to which there is not another contractor,
subcontractor, materials supplier, consultant or subconsultant to perform work
or supply materials of comparable quality at a comparable price.
Sec.6.17 No Waiver of Compliance. The disbursement by EDC of any portion
-------------------------
of the Funding to The Times shall not constitute a waiver of EDC's right to
require compliance
-61-
<PAGE>
with any of the covenants contained in this Article Six or otherwise contained
in this Agreement.
-62-
<PAGE>
ARTICLE SEVEN - DEFAULT AND TERMINATION
---------------------------------------
Sec.7.1 Events of Default. An "Event of Default" shall exist if any of
------------------
the following shall have occurred:
(a) if The Times shall have applied the Funding in violation of the
covenant set forth in Sec.6.9 and such misapplication was not corrected within
ten (10) Business Days after receipt of written notice thereof; or
(b) if The Times fails to duly observe or perform any of the material
covenants and agreements contained in this Agreement (other than the covenants
contained in Sec.6.9) and if such failure continues for twenty (20) Business
Days after receipt of written notice to The Times by EDC specifying with
particularity such material default and requiring such material default to be
remedied; provided, however, that if because of Unavoidable Delays or if the
nature of the default is such that The Times cannot reasonably be expected to
cure the same within such period, then such material default shall not be an
Event of Default if, within such period (subject to Unavoidable Delays), The
Times commences in good faith to cure such material default and (subject to
Unavoidable Delays) diligently prosecutes such cure to completion; or
(c) if an "Event of Default" (as defined in the Lease) has occurred
under the Lease and EDC has taken action to terminate the Lease in accordance
with the terms thereof; or
(d) if there is any cessation of the Construction Work for any period
in excess of ninety (90) successive calendar days after the date upon which
the Construction Work shall
-63-
<PAGE>
commence, unless the cessation of the Construction Work shall have been caused
by Unavoidable Delays and construction or construction-related activities
shall have resumed promptly after the cause of the Unavoidable Delay shall
have been removed and shall be diligently pursued (it being understood that
during any such cessation of the Construction Work, EDC shall have the right,
upon three (3) days prior written notice to The Times, to enter upon the
Construction Site for the purpose of protecting the Construction Site against
deterioration, loss, damage or theft if the Contractor or Contractors
required, pursuant to its respective Construction Contract(s), to provide such
services has ceased providing the services); or
(e) if any representation or warranty by The Times contained in this
Agreement shall be materially false when made or reaffirmed and such
materially false representation or warranty materially adversely affects The
Times's ability to enter into this Agreement and perform the Work in
accordance with the terms hereof.
Sec.7.2 Default Remedies; Exculpation.
------------------------------
(a) Upon an Event of Default, EDC may exercise any right or remedy
permitted to it by law, in equity, or under this Agreement, including, without
limitation, the right to obtain restitution of any portion of the Funding
which is applied by The Times, The Times's employees, agents or contractors in
violation of Sec.6.9, with interest from the date of EDC's disbursement at the
Late Charge Rate. Without limiting the generality of the foregoing, upon an
Event of Default, EDC shall have the right to elect to terminate this
Agreement
-64-
<PAGE>
(reserving, however, all remedies provided in this Article Seven or existing
otherwise) or to make no further disbursements until such default is remedied
or determined not to be an Event of Default.
(b) Subject to the provisions of Sec.7.2(c) and Sec.9.11(a) hereof,
the liability of The Times and its Affiliates under this Agreement for damages
or otherwise shall be limited to (i) any sums advanced hereunder to The Times
but not heretofore expended by it, (ii) the proceeds (to the extent actually
received by The Times) of any insurance policies covering or relating to the
Work or the Construction Site, (iii) the obligations of The Times set forth in
Sec.5.7, and (iv) the third party guarantees set forth in Sec.5.7 for the
period prior to their assignment to EDC. In no event shall EDC look to the
property or assets of any of the individuals who are the directors, officers,
employees, shareholders, agents or servants of The Times, and no property or
assets of any of the aforesaid Persons shall be subject to levy, execution or
other enforcement procedure for the satisfaction of The Times's obligations
under this Agreement, except in the event such individual has misapplied the
Funding as described in Sec.7.2(c) below and then only to the extent of the
actual dollar amount that such individual has misapplied the Funding;
provided, however, that if such misapplication was the result of such
individual's fraudulent conduct, such individual's liability shall be as set
forth in Sec.7.2(c)(i) below. Except as specifically set forth herein, in no
event shall The Times Indemnitees be liable for consequential damages under
this Agreement.
-65-
<PAGE>
(c)(i) Each of the individuals described in Sec.7.2(b) above shall be
personally liable (as distinguished from collective liability), to the full
extent provided by law, in equity, and by this Agreement if any such relevant
individual shall have applied the Funding in violation of the covenant
contained in Sec.6.9 of this Agreement and such misapplication was not
corrected within ten (10) Business Days of notice thereof; provided, however,
that such liability shall be limited to the actual dollar amount that was
misapplied unless the misapplication was the result of fraudulent conduct, in
which case such liability shall not be limited as provided above.
(ii) The Times shall be liable to the full extent provided by law, in
equity, and by this Agreement if The Times shall have applied the Funding in
violation of the covenant contained in Sec.6.9 of this Agreement and such
misapplication was not corrected within ten (10) Business Days of notice
thereof; provided, however, that such liability shall be limited to the actual
dollar amount that was misapplied unless the misapplication was the result of
fraudulent conduct on the part of The Times as opposed to the fraudulent
conduct of an individual not authorized by The Times to act in such a manner,
in which case such liability shall not be limited as provided above.
(d) No course of dealing on the part of EDC or any failure on the part
of EDC to exercise any right shall operate as a waiver of such right or
otherwise prejudice EDC's remedies. No right or remedy conferred upon or
reserved to EDC is intended to be exclusive of any other right or remedy.
Every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy contained
-66-
<PAGE>
in this Agreement or existing at any time at law or in equity, or otherwise,
and may be exercised from time to time and as often and in such order as EDC
may deem appropriate. The exercise of any right or remedy shall not be
construed as an election or a waiver of any other right or remedy. No delay
or omission of EDC in exercising any right or remedy occurring upon an Event
of Default shall impair any such right or remedy or constitute a waiver of or
acquiescence in such Event of Default.
(e) The provisions of this Sec.7.2 shall survive the expiration or
termination of the Term.
Sec.7.3 Termination. If, upon the occurrence of an Event of Default
------------
described in Sec.7.1(a), (b), (d) or (e) above, EDC elects to terminate this
Agreement, or for any other reason provided for under this Agreement, this
Agreement is terminated, EDC agrees that, provided that the Lease remains in
full force and effect and no "Event of Default" (as defined in the Lease)
shall have occurred and be continuing thereunder, EDC shall have the right
(but shall not be obligated) to undertake the reconstruction of the Whitestone
Road in accordance with the Final Plans and Specifications with such
reasonable changes therein as EDC may from time to time and in its reasonable
discretion, deem appropriate; provided that, in no event shall such
discretionary changes (i.e. changes which are not required by the
Requirements, field conditions or other unexpected conditions, or are not
necessitated by reason of The Times's default under this Agreement) cause
"Substantial Completion" (as such term is defined in the Lease) of the Project
to be delayed by virtue
-67-
<PAGE>
of the inability to obtain a Certificate of Occupancy with respect to the
Project. In such circumstances, EDC shall have the right (but shall not be
obligated) to assume any Construction Contract or any Design Contract made by
or on behalf of The Times in any way relating to the Work and to take over and
use all or any part or parts of the labor, materials, supplies and equipment
contracted for, by, or on behalf of The Times, whether or not previously
incorporated into the Construction Site, all in EDC's discretion. To
effectuate the provisions of this paragraph, The Times hereby collaterally
assigns to EDC all such Construction Contracts and all such Design Contracts,
whether presently existing or made in the future, as more particularly set
forth in Sec.4.1(d) hereof, and, if EDC exercises its rights under such
collateral assignment, EDC shall assume all of the obligations and liabilities
of The Times under such Construction Contracts and Design Contracts. In
connection with any demolition or construction undertaken by EDC pursuant to
the provisions of this Sec.7.3, EDC may (i) engage builders, contractors,
architects, engineers and others for the purpose of furnishing labor,
materials and equipment, (ii) reasonably pay, settle or compromise all bills
or claims which may become liens against the Construction Site, or which have
been or may be properly incurred, or for the discharge of liens, encumbrances
or defects in the title of the Construction Site, and (iii) take such other
reasonable action (including the employment of watchmen) to protect the
Construction Site. Any costs incurred by EDC in connection with the
performance of the above-described work which are in excess of the amount of
the Funding and which are necessitated as a result of the earlier termination
of this Agreement by reason of The Times's default or The Times's
-68-
<PAGE>
failure to perform its obligations with respect to the construction of the
Improvements in accordance with this Agreement and the Final Plans and
Specifications shall be paid by The Times. The provisions of this Sec.7.3 shall
survive the expiration or termination of the Term.
-69-
<PAGE>
ARTICLE EIGHT - NOTICES
-----------------------
Sec.8.1 Notices. All notices under this Agreement shall be in writing and
--------
shall be deemed to have been sufficiently given or served for all purposes as
of the date when sent by hand, or by a national overnight courier service, or
by certified or registered mail, return receipt requested, and addressed as
follows (or to such other addresses as may from time to time be designated by
EDC or The Times by notice delivered to the other in accordance with this
Sec.8.1):
(i) if to EDC:
New York City Economic Development Corporation
110 William Street
New York, N.Y. 10038
Attention: President
with a copy via ordinary mail to General Counsel, at the
same address
and to:
New York City Law Department
100 Church Street
New York, New York 10007
Attention: Chief, Economic Development Division;
(ii) if to The Times:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Solomon B. Watson, IV, Esq.
General Counsel
-70-
<PAGE>
with a copy via ordinary mail to David Thurm, Executive
Director of Project Development, at the same address, and
with a copy in the same manner sent to The Times to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin Polevoy, Esq.
Sec.8.2 Disbursement Submissions. All Requisitions and other submissions
-------------------------
for disbursements required to be made pursuant to Article Four of this
Agreement shall be addressed as directed in Sec.4.3 hereof.
-71-
<PAGE>
ARTICLE NINE - GENERAL CONDITIONS
---------------------------------
AND COVENANTS
-------------
The following terms, covenants and conditions shall be applicable
throughout the Term:
Sec.9.1 Conflict of Interests. No member, officer, director or employee
----------------------
of EDC or the City, or their designees, consultants or agents; no member of
the governing body of the City and no public official of the City who
exercises or exercised any functions or responsibilities with respect to the
subject matter of this Agreement during his/her tenure, if known to The Times,
shall have any interest, direct or indirect, in any contract or subcontract,
or the proceeds thereof, for work to be performed in connection with the Work
or in any activity or benefit arising out of or in connection with the
performance of the Work. Upon receiving actual notice or knowledge of any of
the circumstances specified in the preceding sentence, The Times shall deliver
notice to EDC of the circumstances and immediately shall use good faith
efforts to cause the Persons affected to terminate their interest in the
prohibited contract or property. The Times shall require the Resident
Engineer, Construction Manager, Owner's Representative or General Contractor
(as the case may be) and the Contractors, subcontractors, materials suppliers,
Consultants and subconsultants to make appropriate representations in writing
that they, their employees and principals do not have any conflict of interest
prohibited under this Sec.9.1, and to covenant to use good faith
-72-
<PAGE>
efforts to cause the prohibited persons to terminate their interest in
the relevant contract or property upon demand by The Times.
Sec.9.2 No Liability of Individuals. No officer, employee, director,
------------------------------
member, agent or other person authorized to act on behalf of EDC or the City
shall have any personal liability in connection with this Agreement or any
default by EDC or the City.
Sec.9.3 Anti-Boycott Provisions.
------------------------
(a) The Times agrees that it is not now participating, nor shall it
participate during the Term, in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder.
(b) Upon the final determination by the United States Department of
Commerce or any other agency of the United States as to conviction of The
Times for participation in an international boycott in violation of the
provisions of the Export Administration Act of 1979, as amended, or the
regulations promulgated thereunder, EDC may, at its option, declare a default
under this Agreement (which default is subject to cure by The Times in
accordance with the terms of this Agreement).
(c) The Times shall comply in all respects with the provisions of
Sec.6-114 of the Administrative Code of the City and the rules and
regulations issued by the Comptroller of the City thereunder.
-73-
<PAGE>
Sec.9.4 Governing Law. The provisions of this Agreement shall be governed
-------------
and interpreted in accordance with the law of the State of New York.
Sec.9.5 Liability of EDC. (a) Subject to the provisions of Sec.9.11(b)
------------------
hereof, EDC shall not be liable for consequential damages under this Agreement
to The Times or to any other Person in any matter arising out of the
construction of the Improvements.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, if (i) EDC defaults in the disbursement of the Funding for which it
is obligated, pursuant to the terms of this Agreement, to disburse to The
Times and fails to cure such default within thirty (30) days after The Times
delivers notice (the "EDC Default Notice") to EDC of such default, (ii) the
Funding shall not be made available to EDC by the City, in whole or in part
for any reason, then, for each dollar of Funding not so disbursed by EDC or
made available to EDC by the City, The Times shall have the right to offset
against future Rental (other than Impositions) due under the Lease and against
College Point Improvement Fund Payments due under the Lease an amount equal to
the Funding not so disbursed by EDC until such time as EDC recommences the
disbursement of the Funding. The Times agrees that the right to on offset
against Rental (other than Impositions) and against College Point Improvement
Fund Payments as hereinabove described is The Times's sole remedy against EDC
arising out of the failure of EDC to receive the Funding from the City and The
Times shall not commence any action or proceeding against EDC as a result of
such failure, except as otherwise provided in this Agreement.
-74-
<PAGE>
(c) In the event that EDC (i) defaults in the performance of any
obligation on EDC's part to perform under this Agreement other than the
disbursement of the Funding or (ii) defaults in the disbursement of the
Funding and continues to be in default thereof after the receipt of the EDC
Default Notice and expiration of the thirty (30) day cure period provided
therein, then The Times shall have all of its rights at law and in equity
against EDC.
(d) Except as otherwise provided in this Agreement; (i) no course of
dealing on the part of The Times or any failure on the part of The Times to
exercise any right shall operate as a waiver of such right or otherwise
prejudice The Times's remedies, (ii) no right or remedy conferred upon or
reserved to The Times is intended to be exclusive of any other right or
remedy, (iii) every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy contained in this
Agreement or existing at any time at law or in equity, or otherwise, and may
be exercised from time to time and as often and in such order as The Times may
deem appropriate, and (iv) the exercise of any right or remedy shall not be
construed as an election or a waiver of any other right or remedy. No delay
or omission of The Times in exercising any right or remedy occurring upon
EDC's failure to disburse the Funding in accordance with this Agreement or to
otherwise perform its obligations in accordance with the terms of this
Agreement shall impair any such right or remedy or constitute a waiver of or
acquiescence in any such failure.
-75-
<PAGE>
Sec.9.6 Amendments. This Agreement may not be amended, waived or
-----------
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the amendment, waiver or termination is sought.
Sec.9.7 Successors and Assigns. The provisions of this Agreement shall be
-----------------------
binding upon and shall inure to the benefit of EDC and The Times and their
respective successors and permitted assigns.
Sec.9.8 Assignment of Funds. Except as specifically provided in Sec.10.1
---------------------
hereof, The Times acknowledges that the City capital budget dollars which form
the Funding are not and shall not be deemed to be an assignment of any funds
received by EDC from the City. The Times confirms that its rights to the
Funding arise exclusively under this Agreement.
Sec.9.9 Counterparts. This Agreement may be executed in one or more
-------------
counterparts which, when taken together, shall constitute one and the same
document.
Sec.9.10 Interpretation. The provisions of the Lease incorporated by
---------------
reference into this Agreement are intended to supplement the other provisions
of this Agreement. In the event of any conflict between the Lease provisions
and the other provisions of this Agreement, the provisions of the Lease shall
control.
-76-
<PAGE>
Sec.9.11 Indemnity. (a) In this Sec.9.11(a), EDC and the City, and their
----------
respective departments, offices, officers, members, directors, employees and
agents shall collectively be referred to as "the Public Parties". The Times
shall defend, indemnify and hold harmless the Public Parties, from and against
any and all claims, damages (including consequential damages awarded to third
parties against the Public Parties), judgments, liabilities and causes of
action whatsoever to which they may be subject arising out of the acts or
omissions of The Times, its Contractors, subcontractors, agents, employees or
material suppliers, Consultants and subconsultants, and any and all Persons,
in connection with the performance of the Work, or because of any negligence,
fault or default of The Times, its agents, employees, material suppliers,
subcontractors or subconsultants. The obligation of The Times to indemnify
and hold harmless the Public Parties shall include but not be limited to the
payment of any and all costs and reasonable legal fees as may be actually
incurred by the Public Parties. The termination of this Agreement shall not
release The Times from any liability to the Public Parties arising out of any
act or omission of The Times in connection with this Agreement.
(b) In this 9.11(b), The Times and its officers, members, directors,
employees and agents shall collectively be referred to as "The Times
Indemnitees". EDC shall indemnify and hold harmless The Times Indemnitees
from and against any and all claims, damages (including consequential damages
awarded to third parties against The Times Indemnitees), judgments,
liabilities and causes of action whatsoever to which they may be subject to
the extent caused as a result of the negligence or misconduct of EDC or its
agents or
-77-
<PAGE>
professional consultants arising out of or in connection with EDC's or its
agents' or professional consultants' inspections of the Construction Site or
uncovering of work in accordance with Sec.1.1(e) hereof. The obligation of EDC
to indemnify and hold harmless The Times Indemnitees pursuant to this
Sec.9.11(b) shall include, but not be limited to, the payment of any and all
costs and reasonable legal fees as may be actually incurred by The Times
Indemnitees in connection with any such claim, damage, judgment, liability or
causes of action. The termination of this Agreement shall not release EDC from
any liability to The Times Indemnitees described in this Sec.9.11(b).
Sec.9.12 No Agency. Neither The Times nor any of its employees,
-----------
Contractors or subcontractors, Consultants or subconsultants is, shall be or
shall represent that he, she or it is an agent, servant or employee of EDC or
the City by virtue of this Agreement or by virtue of any approval, permit,
license, grant, right or authorization given by the EDC or the City or any of
their officers, agents or employees. The Times shall be solely responsible
for the work, direction, compensation and personal conduct of its officers,
agents, employees, subcontractors and subconsultants.
Sec.9.13 Venue
-----
(a) Any and all claims asserted by or against EDC or by or against The
Times arising under this Agreement or related hereto shall be heard and
determined either in the courts of the United States ("Federal Courts")
located in the City or in the courts of the
-78-
<PAGE>
State of New York ("New York State Courts") located in the City of New York.
To effect this agreement and intent, EDC and The Times agree and, where
appropriate, shall require each Contractor and Consultant to agree, as
follows:
(i) If either Party initiates any action against the other
Party in Federal Court or in New York State Court, service of
process may be made on The Times either in person, or by
registered or certified mail (return receipt requested) addressed
to the office of the General Counsel of The Times at the address
set forth in Article Eight of this Agreement, or to such other
address as The Times may provide to EDC in writing, and service of
process may be made on EDC, either in person or by registered or
certified mail (return receipt requested) addressed to EDC at its
address as set forth in Article Eight of this Agreement, or to
such other address as EDC may provide to The Times in writing.
(ii) With respect to any action between EDC and The Times
in New York State Court, each Party hereby expressly waives and
relinquishes any rights it might otherwise have (A) to move to
dismiss on grounds of forum non conveniens, (B) to remove to
----- --- ----------
Federal Court wholly outside New York City, and (C) to move for a
change of venue to New York State Court outside New York City.
(iii) With respect to any action between EDC and The Times
in Federal Court located in New York City, each Party expressly
waives and
-79-
<PAGE>
relinquishes any right it might otherwise have to move
to transfer the action to a Federal Court outside the City of New
York.
(iv) If either Party commences any action against the other
Party in a court located other than in the City and State of New
York, then, upon request of the Party against whom the action is
brought, the Party bringing the action shall either consent to a
transfer of the action to a court of competent jurisdiction
located in the City and State of New York or, if the court where
the action is initially brought will not or cannot transfer the
action, then to dismiss such action without prejudice, and may
thereafter reinstitute the action in a court of competent
jurisdiction in New York City.
Sec.9.14. Investigations; Cooperation.
----------------------------
(a) Definitions. As used in this Sec.9.14:
------------
(i) "Investigation" shall mean any investigation, audit or
inquiry conducted by the Department of Investigation with respect
to the obtaining and/or performance of the Transaction Documents
or any of them,
(ii) "Department of Investigation" shall mean the Department of
Investigation of the City or any City department or agency
succeeding to the functions thereof,
(iii) "Commissioner" shall mean the Commissioner or Acting
Commissioner of the Department of Investigation,
-80-
<PAGE>
(iv) "Deputy Mayor" shall mean the Deputy Mayor for Finance and
Economic Development of the City (or the officer of the City
succeeding to the functions of that office),
(v) "Entity" shall mean any firm, partnership, corporation,
association or Person that receives monies, benefits, licenses,
leases or permits from or through the City or otherwise transacts
business with EDC or the City,
(vi) "Member" shall mean any Person associated with another
Person or entity as a partner, director, officer, principal or
employee, and
(vi) "Transaction Documents" shall mean the Lease, this
Agreement, Funding Agreement #1, Funding Agreement #2 and Funding
Agreement #3.
(b) Cooperation with Investigations. Subject to the exclusions set
---------------------------------
forth in paragraph (c) of this Sec.9.14, The Times shall during the term of
this Agreement:
(i) cooperate fully and faithfully, and utilize good faith
efforts to cause its Members to cooperate fully and
faithfully, with any Investigation; and
(ii) report, and utilize its good faith efforts to cause its
Members to report, in writing to the Commissioner, any
solicitation of which The Times has actual knowledge of
money, goods, requests for future employment or other
benefit or thing of value, by or on behalf of any employee
of the City or any other Person, for any purpose relating to
the procurement or obtaining and/or performance of any
Transaction Document by The Times.
-81-
<PAGE>
(c) Exclusions. The provisions of Sec.9.14(b) above shall not apply:
-----------
(i) to any information or document known, prepared or obtained
by The Times or its Members (and the sources of such
information or documents), that is protected from compelled
disclosure by any present or future "Shield Law" or any
other statute, constitutional provision, rule, regulation or
case law related to the rights of reporters and/or news
organizations;
(ii) to any Person who refuses to testify based on his or her
privilege against self-incrimination after having been given
assurances that his or her statement, and any information
from such statement, will not be used against such Person in
any subsequent criminal proceeding in any forum (provided,
however, that any Person given such assurances shall have
the right to have the legal sufficiency of such assurances
adjudicated by a court of competent jurisdiction as a
precondition of the applicability of Sec.9.14(b) to such
Person); and
(iii) to any construction contract or other agreement (or the
obtaining or performance thereof) with parties other than
the City or EDC, including without limitation, any contract
or agreement being funded through any Transaction Document.
(d) Hearing. If The Times or any Member of The Times refuses to
--------
testify in an Investigation and, in connection with such failure to testify,
the Commissioner determines
-82-
<PAGE>
that The Times has failed to cooperate in the Investigation in violation of
the provisions of Sec.9.14(b) hereof, then the Commissioner may request the
Deputy Mayor to convene a hearing (the "Hearing"), upon not less than five (5)
days written notice to The Times, to determine if any penalties should be
imposed for The Times's failure to so cooperate in accordance with this
Sec.9.14.
(e) Adjournments of Hearing
-----------------------
(i) The Times shall have the right to require that the Hearing
be adjourned for a period of not more than thirty (30) days.
(ii) The Deputy Mayor may grant other adjournments of the
Hearing, in the exercise of his or her reasonable
discretion; provided however, that in the case of an
adjournment occasioned by The Times's failure to appear, the
Deputy Mayor may, if he or she determines that there was no
reasonable cause for the requested adjournment or failure to
appear, impose an Interim Penalty.
(iii) The City shall not incur any penalty or damages for delay or
otherwise occasioned by an adjournment of the Hearing.
(f) Penalties.
----------
(i) The Deputy Mayor may impose a penalty during an adjournment
due to The Times's failure to appear or proceed with the
scheduled Hearing pursuant to Sec.9.14(d)(ii) hereof
("Interim Penalty") of not more than $1,000 per day for each
day of such adjournment, provided,
-83-
<PAGE>
however, that such daily penalties shall cease to accrue
from and after the date that The Times makes itself
available to appear at or proceed with the scheduled Hearing
or gives written notice to the Deputy Mayor that it does not
intend to appear at or proceed with the scheduled Hearing,
in which event the Deputy Mayor shall have the right to
continue the Hearing and reach a determination without The
Times's participation.
(ii) If, after the Hearing, the Deputy Mayor determines that The
Times failed to cooperate in the Investigation in violation
of this Sec.9.14, and The Times fails to commence to
cooperate fully in such Investigation within five ( 5)
Business Days following its receipt of written notice
of such determination, the Deputy Mayor may:
(A) impose a penalty ("Final Penalty") which may not, in
conjunction with any Interim Penalty or Final Penalty
imposed during the term of this Agreement under this
Agreement and/or during the term of the Lease with
respect to any other Transaction Document, exceed
$500,000 in the aggregate during the term of the
Lease; and/or
(B) disqualify The Times, for a period not to exceed five
(5) years, from submitting bids for, or transacting
business with, or entering into or obtaining any
contract, lease, permit or license
-84-
<PAGE>
with or from EDC or the City, other than as
contemplated in the Transaction Documents.
Notwithstanding anything to the contrary contained herein, in the event
that The Times is found after the Hearing to have failed to cooperate in the
Investigation, but nonetheless is not subjected to a Final Penalty because The
Times commences to cooperate fully in such Investigation within five (5)
Business Days following its receipt of written notice of such determination,
The Times shall be liable for the cost of conducting such Hearing in an amount
not to exceed $5,000.
(g) Criteria for Determination. The Deputy Mayor shall consider and
----------------------------
address in reaching his or her determination and in assessing an appropriate
Interim Penalty, Final Penalty, and/or disqualification, the factors in
clauses (i) and (ii) of this Sec.9.14(g). He or she may also consider, if
relevant and appropriate, the criteria established in clauses (iii) and (iv)
of this Sec.9.14(g), in addition to any other information which may be
relevant and appropriate:
(i) The Times's good faith endeavors or lack thereof to cooperate
fully and faithfully with the Investigation, including but not
limited to the discipline, discharge or disassociation of any
Person failing to testify, the production of accurate and
complete books and records, and the forthcoming testimony of
all other Members, agents, assignees or fiduciaries whose
testimony is sought (the Deputy Mayor shall take into
account whether the discipline, discharge
-85-
<PAGE>
or disassociation of any Persons failing to testify would
violate any union or other contract),
(ii) the relationship of the Person who refused to testify to The
Times, including, but not limited to, whether the Person whose
testimony is sought has an ownership interest in The Times and/or
the degree of authority and responsibility the Person has within
The Times,
(iii) The nexus of the testimony sought to The Times and the
Transaction Documents, and/or
(iv) the effect a penalty may have on an unaffiliated and
unrelated party or Entity that has a significant interest in The
Times, provided that (x) such unrelated party or Entity has given
actual notice to the Commissioner or EDC upon the acquisition of
the interest, or (y) at the Hearing such unrelated party or Entity
gives notice and proves that such significant interest was
previously acquired; under either circumstance, such unrelated
party or Entity must present evidence at the Hearing demonstrating
the potential adverse impact a penalty will have on such party or
Entity.
(h) Payment of Penalties. Any Interim or Final Penalty hereunder
-----------------------
shall, upon imposition thereof, be applied to reduce the aggregate of Offset
Amounts (as such term is defined in the Lease) then available to The times
under Article 4 of the Lease and the balance, if any, shall be paid promptly
as additional Rental, or at the landlord under the
-86-
<PAGE>
Lease's option, such balance shall be applied to reduce EDC's obligations with
respect to any undisbursed Funding.
(i) Exclusive Remedy. Notwithstanding anything to the contrary con-
------------------
tained in this Agreement, the remedies set forth in Sec.9.14(f) hereof shall
be the sole and exclusive remedies available to EDC in the event that The
Times breaches any of its obligations under this Sec.9.14, and no other
remedies, including, without limitation, the remedies set forth elsewhere in
this Agreement for defaults by The Times in the performance of its obligations
under this Agreement, shall be applicable to a breach by The Times of any of
its obligations under this Sec.9.14.
(j) Right to Dispute Determinations of Deputy Mayor. Nothing
-------------------------------------------------------
contained herein shall be construed to limit in any manner whatsoever The
Times's right or ability to challenge or seek to enjoin, overturn, set aside
or modify any action taken, determination made or penalty imposed by the
Deputy Mayor pursuant to the provisions of this Sec.9.14.
(k) Concurrent Lease Obligation. The obligations of The Times under
----------------------------
this Sec.9.14 constitute a portion of the obligations of The Times under
Article 40A of the Lease, and nothing contained herein shall be construed as
expanding, enlarging or increasing in any way, or as being separate from or in
addition to, the obligations and liabilities of The Times pursuant to Article
40A of the Lease.
-87-
<PAGE>
Sec.9.15. Intentionally Omitted.
Sec.9.16 Maximum Interest Rate
---------------------
In the event that any interest payable under this Agreement shall be
deemed to exceed the maximum rate permitted by law, then the amount of
interest to be paid shall be the maximum rate so permitted.
Sec.9.17 Captions
--------
The captions in this Agreement are inserted for convenience of reference
only and in no way define, describe or limit the scope or intent of this
Agreement or any of the provisions hereof.
Sec.9.18 Gender, Etc.
------------
The gender used in this Agreement shall be deemed to refer to the
masculine, feminine, or neuter gender, as the context or the identity of the
persons being referred to may require. The singular shall include the plural
and vice versa as the context may dictate.
Sec.9.19 Assignment by EDC. EDC shall not assign this Agreement without
-------------------
the prior written consent of The Times, except that EDC shall have the right,
upon ten (10) Business Days prior written notice, to assign this Agreement
and/or EDC's rights under this Agreement, without any further consent on the
part of The Times, to the City.
-88-
<PAGE>
Sec.9.20 Obligations of Newspaper Division. EDC acknowledges and agrees
-----------------------------------
that all non-monetary obligations set forth in this Agreement as being
obligations of The Times shall apply only to, and be performed by, The New
York Times Newspaper Division of The New York Times Company (the "Newspaper
Division") and its employees and agents, and EDC shall look solely to the
Newspaper Division for the performance of such non-monetary obligations;
provided, however, that any default by the Newspaper Division in the
performance of such non-monetary obligations shall be treated with the same
force and effect pursuant to the applicable provisions of this Agreement as if
such default had been committed by The Times.
-89-
<PAGE>
ARTICLE TEN - AGREEMENT OF THE CITY
-----------------------------------
Sec.10.1 City's Agreement to Fund EDC. The City, by executing this
--------------------------------
Agreement as it effects this Article Ten only, (i) acknowledges that it is
becoming a signatory to this Agreement as a material inducement to The Times
to enter into this Agreement, (ii) warrants and represents that the
Consolidated Contract is in full force and effect and legally binding upon the
City; and (iii) covenants and agrees to provide EDC with City capital budget
funds in such amounts and at such times as will permit EDC to comply with its
obligations to disburse the Funding pursuant to the provisions of this
Agreement, without regard to whether the Consolidated Contract is then in full
force and effect or whether EDC is in compliance with the terms thereof.
Sec.10.2 Valid Agreement of the City. A legal opinion of the Corporation
----------------------------
Counsel (addressed to The Times) providing that this Agreement is legal, valid
and binding upon the City with respect to the provisions of this Article Ten
in the form attached hereto as Appendix K, is being delivered to The Times
concurrently herewith.
Sec.10.3 The Times's Rights Against the City. In the event that the City
-------------------------------------
has defaulted in the performance of any obligation of the City pursuant to
this Article Ten and continues to be in default thereof after notice from The
Times and a thirty (30) day period to cure, The Times shall have all of its
rights at law and in equity against the City.
-90-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
By: /s/ Carl Weisbrod
----------------------
Title: President
THE NEW YORK TIMES COMPANY
By: /s/ Katharine P. Darrow
-------------------------
Title: Senior Vice President
THE CITY, BY SIGNING IN THE
PLACE PROVIDED BELOW,
AGREES TO BE BOUND BY THE
PROVISIONS OF ARTICLE TEN HEREOF:
THE CITY OF NEW YORK
By: /s/ Barry F. Sullivan
APPROVED AS TO FORM:
By: /s/
--------------------------
Acting Corporation Counsel
-91-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came
Carl Weisbrod, to me known, who, being by me duly sworn, did depose
and say that s/he resides at 11010 St. NY, NY; that s/he is
the President of New York City Economic Development Corporation, the
corporation described in and which executed the foregoing instrument; and that
s/he signed her/his name thereto by authority of the board of directors of
such corporation.
Colleen B. McHale
---------------------------
Notary Public
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993,before me personally came
Katharine Darrow, to me known, who, being by me duly sworn, did depose
and say that s/he resides at 16 Garden Place, Brooklyn, NY; that s/he is
the S.V.P. of The New York Times Company, the corporation described
in and which executed the foregoing instrument; and that s/he signed her/his
name thereto by authority of the board of directors of such corporation on
behalf of such corporation.
Beverly Sturr
--------------------------
Notary Public
-92-
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On the 17th day of December, 1993, before me personally came
Barry F. Sullivan, to me known, who, being by me duly sworn, did depose
and say that s/he resides at c/o City Hall, NY, NY; that s/he is
the Deputy Mayor of The City of New York, the same person who executed the
foregoing instrument; and that s/he acknowledged that s/he signed her/his name
thereto on behalf of The City of New York and pursuant to the authority vested
in her/him.
Colleen B. McHale
-----------------------------
Notary Public
-93-
=================================================================
NEW YORK CITY PUBLIC UTILITY SERVICE
POWER SERVICE AGREEMENT
Made as of May 3, 1993
between
THE CITY OF NEW YORK, Acting
by and through its Public Utility Service
and
THE NEW YORK TIMES NEWSPAPER DIVISON OF THE
NEW YORK TIMES COMPANY
=================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE TITLE PAGE
Article 1 Definitions 1
Article 2 Sale and Purchase of Electricity 11
Article 3 Type of Service 17
Article 4 Term 18
Article 5 Quantity of Electricity to be Supplied 19
Article 6 Use of Service 22
Article 7 Billing 22
Article 8 Apportionment of Service 26
Article 9 Employment and Power Usage Levels 27
Article 10 Intentionally Omitted 36
Article 11 Breach of Contract 37
Article 12 Third Party Beneficiary 41
Article 13 Records 42
Article 14 Force Majeure 42
Article 15 Assignability of Agreement 44
Article 16 Notices 44
Article 17 Modifications to Agreement 45
Exhibit I NYPA/NYCPUS Contract
Exhibit II NYPA Service Tariff No. 35
Exhibit III Con Edison Delivery Agreement
Exhibit IV NYPA Resolution
Exhibit V NYCPUS General Terms and Conditions
- i -
<PAGE>
TABLE OF CONTENTS (cont'd)
Exhibit VI NYCPUS Service Tariff No. 4
Exhibit VII Annual Job Report Form
Exhibit VIII Customer's Agreement to Purchase
- ii -
<PAGE>
NEW YORK CITY PUBLIC UTILITY SERVICE
POWER SERVICE AGREEMENT
THIS AGREEMENT made as of this May 3, 1993 between THE
CITY OF NEW YORK, a municipal corporation of the State of New
York, acting by and through its Public Utility Service, having
an office at 75 Park Place, Sixth Floor, New York, New York
10007 and THE NEW YORK TIMES NEWSPAPER DIVISION OF THE NEW YORK
TIMES COMPANY, having an address at 229 West 43rd Street, New
York, New York.
Article 1 - DEFINITIONS
As used throughout this Agreement, the following
terms, whether in the singular or plural, shall have the
meaning set forth below:
1.1 Abandonment of the Project - The occurrence of
any of the following:
(i) notification by Customer to EDC, in writing,
that it intends to abandon the Project as of
the date specified in such notice, or
(ii) at any time during the period between the
date hereof and the date on which Customer
has equipped the Project with the initial
printing presses to be used in connection
therewith and commenced the operation
thereof (the "Operational Date"), Customer
permanently relocates substantially all of
the jobs and/or functions directly related
<PAGE>
to the printing, collating, bundling and
distribution of the New York Times newspaper
located, on the date of this Agreement, at
Customer's 43rd Street facility (the "43rd
Street Facility"), to another facility
outside of New York City, or
(iii) at any time after the Construction
Commencement Date, Customer fails to make
reasonable and diligent efforts to construct
the minimum facility required to be
constructed pursuant to the terms of the
Lease (the "Minimum Printing Facility"), and
as a result of such failure Customer shall
not Substantially Complete (as such term is
defined in the Lease) construction of the
Minimum Printing Facility by the Scheduled
Completion Date (subject to Unavoidable
Delays), and such failure continues for
thirty (30) days after written notice given
to Customer pursuant to the terms of the
Lease or
(iv) by the date (the "Outside Operation Date")
which is five (5) years after Substantial
Completion (as such term is defined in the
Lease) of construction of the Minimum
Printing Facility,
-2-
<PAGE>
Customer shall have failed to (a) equip such
Minimum Printing Facility with the printing
presses to be used by Customer in connection
therewith and (b) commence the operation of such
Minimum Printing Facility, or
(v) at any time after the Operational Date, Customer
ceases such operation and fails to resume such
operation within a five (5) year period (subject
to Unavoidable Delays) and such failure
continues for thirty (30) days after written
notice given to Customer pursuant to the terms
of the Lease.
Abandonment of the Project shall be deemed to have occurred
effective as of: (I) the date specified in the notice
described in (i) above; (II) the date on which Customer
permanently relocates substantially all of the jobs and/or
functions directly related to the printing, collating, bundling
and distribution of the New York Times newspaper located at the
43rd Street Facility to another facility outside of New York
City; (III) the date which is thirty (30) days after the notice
described in (iii) above (provided, that prior to the
expiration of such thirty-day period, Customer has not
commenced to cure the failure described in such notice);
(IV) the Outside Operational Date; or (V) the date which is
thirty (30) days after the notice described in (v) above
(provided, that prior to the expiration of such thirty-day
-3-
<PAGE>
period, Customer has not commenced to cure the failure
described in such notice).
1.2 Actual Demand - The integrated demand registered by
Customer during each consecutive thirty (30) minute period
during the term of this Agreement.
1.3 Affiliate - (i) Any Person which, directly or
indirectly, through one or more intermediaries controls, or is
under common control with, or is controlled by, Customer, or
(ii) such other Person which may be requested by Customer to be
treated as an Affiliate for purposes of this Agreement and
approved in writing by the Director. The term "control"
(including the related terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of
voting securities, or partnership or other ownership interests,
by contract or otherwise; provided that in any event, any
Person (including the family members of such Person) which owns
directly or indirectly 50% or more of the securities having
ordinary voting power for the election of directors or other
governing body of a corporation or which is a general partner
of a partnership is deemed to control such corporation or
partnership.
1.4 Allocation Increase Notice - Shall have the meaning
provided in Section 5.2 of this Agreement.
-4-
<PAGE>
1.5 Building - A printing facility consisting of not less
than 360,000 square feet to be constructed at the Project by
Customer pursuant to the terms of the Lease.
1.6 City - The City of New York, its departments and
political subdivisions, including the New York City Public
Utility Service.
1.7 College Point Power Commencement Date - The date,
chosen at Customer's discretion, at or about the beginning of a
calendar month to coincide with the appropriate Con Edison "trip
cycle" for such calendar month, which shall be specified by
Customer in the College Point Power Commencement Notice, on
which NYCPUS shall discontinue the allocation of Low-Cost Power
to Customer at the 43rd Street Facility (and nothing contained
herein shall be construed to mean that the power consumed by
Customer at the 43rd Street Facility thereafter shall be reduced
as the result thereof, or that such power shall not thereafter
be provided by Con Edison to Customer at Con Edison's rates
which are applicable to Customer) and commence the allocation of
Low-Cost Power to Customer at the Project. In the event that
Customer desires that NYCPUS provide 6.0 megawatts of Low-Cost
Power to the Project as of the College Point Power Commencement
Date, Customer shall give the College Point Power Commencement
Notice not less than thirty (30) days prior to the College Point
Power Commencement Date. In the event that Customer desires
that NYCPUS provide more than 6.0 megawatts of Low-Cost Power
-5-
<PAGE>
to the Project as of the College Point Power Commencement Date,
Customer shall give the College Point Power Commencement Notice
in accordance with the provisions of Section 5.2 hereof.
1.8 College Point Power Commencement Notice - The notice
to be given by Customer to NYCPUS pursuant to Section 1.7
hereof, which notice shall specify (a) the College Point Power
Commencement Date and (b) the number of megawatts of Low-Cost
Power to be provided to the Project as of the College Point
Power Commencement Date.
1.9 Con Edison - The Consolidated Edison Company of
New York, Inc.
1.10 Construction Commencement Date - Shall have the
meaning provided for that term in the Lease.
1.11 Construction Completion Date - The date upon which
Customer Substantially Completes (as that term is defined in the
Lease) construction of the Building.
1.12 Contract Demand - The amount of power determined from
time to time in accordance with Articles 5 and 9 of this
Agreement.
1.13 Customer - The New York Times Newspaper Divison of The
New York Times Company; provided, however, that any obligation
of Customer to be performed under this Agreement may be
-6-
<PAGE>
performed by Customer or by one or more of Customer's
Affiliates; provided, however, that any such performance by
Customer's Affiliates shall be in accordance with all terms and
conditions of this Agreement including, without limitation, job
reporting and affirmative action requirements, to the extent
that such terms and conditions are applicable to such
performance.
1.14 Delivery Agent - The Consolidated Edison Company of
New York, Inc.
1.15 Delivery Agreement - The Agreement between the City of
New York and Consolidated Edison Company of New York, Inc. for
the delivery of power and energy from the James A. FitzPatrick
Power Project, dated October 23, 1987, attached hereto as
Exhibit III, including the schedule of rates, terms, and
conditions implementing said agreement duly and lawfully filed
by Con Edison with the Federal Energy Regulatory Commission and
the New York State Public Service Commission, and any amendments
or changes thereto.
1.16 Director - The Director of the New York City Public
Utility Service.
1.17 EDC - The New York City Economic Development
Corporation.
1.18 EDPAB - The Economic Development Power Allocation
Board as defined by the Economic Development Law Section 182.
-7-
<PAGE>
1.19 General Terms and Conditions - "General Terms and
Conditions Applicable to the Rates and Charges of the New York
City Public Utility Service," attached hereto as Exhibit V, as
approved pursuant to Law and any amendments thereto.
1.20 Job Recalculation Notice - Shall have the meaning
provided in Section 9.0 hereof.
1.21 Jobs - Positions filled by full-time equivalent
production jobs and full-time equivalent non-production jobs in
New York City only. Production jobs shall be defined as jobs
associated with Customer's printing functions or successor
functions thereto. Non-production jobs shall be defined as jobs
other than those associated with Customer's printing functions.
Full-time equivalent production jobs and non-production jobs
shall be calculated in the manner provided in Section 9.9
hereof.
1.22 Law - The term "Law" shall include, but not be limited
to, any federal or state law or rule or regulation, the New York
City Charter, the New York City Administrative Code, a local law
of the City of New York, and any ordinance, rule or regulation
having the force of law.
1.23 Lease - That certain lease to be entered into between
the City and EDC and simultaneously assigned by EDC to Customer
in connection with the development by Customer of a printing and
distribution facility at College Point, New York.
1.24 Lease Execution Date - The date on which the Lease is
executed.
-8-
<PAGE>
1.25 Low-Cost Power - Power and energy provided by NYCPUS
to Customer pursuant to the terms of this Agreement from the
power and energy provided to NYCPUS by NYPA or any successor to
NYPA pursuant to Service Tariff No. 35 or any successor tariff
to Service Tariff No. 35. Such Low-Cost Power shall consist of
(a) 6.0 megawatts of economic development power provided to
NYCPUS by NYPA or any successor to NYPA, and (b) up to 4.5
additional megawatts from NYCPUS' Reserved Allocation (as that
term is defined in the NYPA/NYCPUS Contract) provided by NYPA or
any successor to NYPA.
1.26 Maximum Power Allocation - 10.5 megawatts of Low-Cost
Power.
1.27 Minimum Production Jobs - Shall have the meaning
provided in Section 9.0 hereof.
1.28 Minimum Non-Production Jobs - Shall have the meaning
provided in Section 9.0 hereof.
1.29 NYCPUS - The New York City Public Utility Service.
1.30 NYCRR - New York Code of Rules and Regulations.
1.31 NYPA - The New York Power Authority (also known as the
Power Authority of the State of New York ("PASNY").
1.32 NYPA Capability Period - Approximately November 1
through April 30 and May 1 through October 31 of each year.
1.33 Person - Any individual, corporation, partnership,
joint venture, trust or unincorporated organization.
-9-
<PAGE>
1.34 Project - A printing and distribution facility in
College Point, New York, to be constructed by Customer pursuant
to the terms of the Lease.
1.35 Scheduled Completion Date - Shall have the meaning
provided for that term in the Lease.
1.36 Summer Temporary Reduction Month - Shall have the
meaning provided in Section 9.7 of this Agreement.
1.37 Temporary Reduction Month - Shall have the meaning
provided in Section 9.7 of this Agreement.
1.38 Winter Temporary Reduction Month - Shall have the
meaning provided in Section 9.7 of this Agreement.
1.39 Unavoidable Delays - Delays caused by strikes,
slowdowns, walkouts, lockouts or other labor troubles; acts of
God; catastrophic weather conditions; inability to obtain labor
or materials due to labor disputes; court orders enjoining
commencement or continuation of construction work; enemy action;
civil commotion; shortage of fuel, supplies or labor resulting
from governmental declared priorities in connection with a
public emergency; failure or defect in the supply of
electricity, oil, gas or water to the Project provided that such
failure or defect is not due to the action or inaction of
Customer or any of its contractors; fire, casualty; the failure
of the Lease Administrator (as such term is defined in the
Lease) to review, comment on, approve, disapprove and/or inform
-10-
<PAGE>
the Buildings Department of its approval of the Plans and
Specifications (as such term is defined in the Lease) for the
Project within the specified time periods, provided that such
failure is not a result of Customer's failure to submit Plans
and Specifications in sufficient detail to permit the Lease
Administrator to properly review such Plans and Specifications
or Customer's failure to submit Plans and Specifications
appropriately modified to reflect the Lease Administrator's
comments thereon; the failure of EDC to disburse any Funding
under Funding Agreement #l (as such terms are defined in the
Lease) and/or any other cause or causes not within Customer's
control that are causing a delay in Customer's performance of
its construction obligations under the Lease.
Article 2 - SALE AND PURCHASE OF ELECTRICITY
2.0 The provision of Low-Cost Power under this Agreement
is in consideration of: (1) Customer's commitment to make, or
to cause one or more of Customer's Affiliates to make, certain
investments in connection with the Project, as hereinafter
provided, and (2) Customer's commitment, except as hereinafter
provided, to retain, or to cause one or more of Customer's
Affiliates to retain, an aggregate total of 3,200 Jobs in New
York City for the duration of this Agreement pursuant to the
provisions of Article 9 hereof including, without limitation,
the last sentence of Section 9.0 hereof. Customer hereby
-11-
<PAGE>
commits to complete an investment associated with the Project in
an aggregate amount of no less than $5.8 million, which
represents 12.5 percent of the equalized assessed value of
Customer's facility at 229 W. 43rd Street, New York, New York.
Such investment shall be completed no later than December 31,
1995 and may include, without limitation, architectural,
engineering, legal and other professional costs and fees, and
the cost of deposits made for the purchase of printing presses
and other equipment ordered for the Project. In addition to the
$5.8 million investment required to be made by December 31,
1995, Customer commits to expend no less than $89.2 million in
connection with the contemplated construction of the Project
(including architectural and engineering costs).
2.1 Customer expects to enter into an Assignment and
Assumption Agreement whereby it will accept an assignment of the
Lease from EDC no later than October 31, 1993. In the event
that Customer (a) does not enter into such an Assignment and
Assumption Agreement by October 31, 1993 (unless Customer is
delayed or prevented from doing so by the acts or omissions of
EDC or the City) or, (b) does enter into such an Assignment and
Assumption Agreement but does not commence construction of the
Project within ten years of the date the Lease is executed,
subject to Unavoidable Delays as that term is defined in and
pursuant to the terms of the Lease, then the breach and benefit
recapture provisions of Article ll, infra, shall apply.
-12-
<PAGE>
2.2 Customer anticipates that construction of the Building
shall be substantially completed by the Scheduled Completion
Date. In the event that Customer does not substantially
complete construction of the Building by the Scheduled
Completion Date, then the breach and benefit recapture
provisions of Article 11, infra, shall apply.
2.3 Beginning on February 28, 1994, and on each
anniversary of such date through and concluding on February 28,
of the year following the earlier to occur of (a) the calendar
year during which Customer shall have completed or exceeded the
investment requirement set forth in Section 2.0 hereof or (b)
the calendar year in which the Construction Completion Date
occurs, Customer shall provide NYCPUS with a report of the
investments and expenditures described in Section 2.0 hereof
made during the previous calendar year (except that the first
report will contain all expenditures made from the inception of
the Project, including calendar years prior to 1993, but not
earlier than calendar year 1992) toward the investment
requirements set forth herein. Such report may be in the form
of a letter indicating for each expenditure: (a) the amount of
such expenditure, (b) a description of the expenditure, and
(c) the payee. Such data set forth in such letter shall be
certified to be correct by an authorized representative of
Customer reasonably acceptable to NYCPUS. For the sole purpose
of verifying Customer's compliance with this provision, NYCPUS
-13-
<PAGE>
shall have the right to examine and audit on reasonable advance
notice all written and electronic records and data directly
concerning such expenditures. Customer's failure to comply with
the investment requirements or the investment reporting
requirement shall constitute breach and subject Customer to the
termination provisions of Article 11.
2.4 The City promises and agrees to sell and Customer
promises and agrees to purchase Low-Cost Power in accordance
with the terms of this Agreement and NYCPUS' Firm Industrial
Economic Development Nuclear Power Service Tariff No. 4 and the
accompanying General Terms and Conditions, which rates and
regulations are duly established from time to time by or under
authority of Law. A copy of Power Service Tariff No. 4 is
attached hereto as Exhibit VI.
2.5 This Agreement and the furnishing of Low-Cost Power
hereunder are contingent upon the receipt of power and energy by
NYCPUS from NYPA and access to necessary transmission and
distribution facilities and subject in all respects to a
contract between NYCPUS and NYPA entitled, "Application for
Electric Service to Municipal Customers within Downstate New
York State", effective on September 10, 1990 ("the NYPA/NYCPUS
Contract") (attached hereto as Exhibit I), NYPA Service Tariff
No. 35 - Firm Nuclear Power Service-Industrial Economic
Development (attached hereto as Exhibit II), the relevant
provisions of the Official Compilation of Codes, Rules and
-14-
<PAGE>
Regulations of the State of New York, including but not limited
to 21 NYCRR Part 370 and 21 NYCRR Part 460, the Delivery
Agreement (attached hereto as Exhibit III), and any and all
applicable tariffs, rules and regulations of the Delivery Agent
(including without limitation Con Edison's "Schedule for
Electricity Service, PSC No. 8 - Electricity"), and any
amendment, changes, or renewals to any of the foregoing;
provided, however, that notwithstanding anything to the contrary
contained in this Section 2.5 (and without limiting the ability
of NYCPUS to reduce Customer's Contract Demand pursuant to the
provisions of Article 9 hereof): (i) the provision of Low-Cost
Power to Customer pursuant to the terms of this Agreement shall
not be diminished or suspended in a discriminatory manner if
there is a reduction in the amount of power and energy provided
by NYPA to NYCPUS or a reduction in NYCPUS' access to necessary
transmission and distribution facilities, (ii) the rates charged
to Customer for Low-Cost Power shall be at uniform,
non-discriminatory rates pursuant to applicable law, including,
without limitation, Section l005(d) of the Public Authorities
Law and (iii) the rates charged to Customer by Distribution
Agent shall at no time be higher than the lowest distribution
rate for Low-Cost Power charged by Distribution Agent to any
customer in New York City.
2.6 Service hereunder shall commence on or about May 3,
1993. Customer shall provide City prior to the commencement of
service hereunder with a signed statement indicating that
Customer agrees to purchase the quantities of power and energy
-15-
<PAGE>
prescribed hereunder during the contract period, and Customer is
to receive such power and energy in lieu of purchasing power and
energy from Con Edison during the term of this Agreement, such
statement to be substantially in the form of Exhibit VIII
attached hereto. Customer understands that Con Edison will not
be required to initiate delivery of power and energy to Customer
if Customer is not current on its payments for service from Con
Edison and has not paid its outstanding financial obligations to
Con Edison, if any.
2.7 Notwithstanding anything to the contrary contained in
this Agreement including, without limitation, references stating
that NYCPUS will "provide" or "discontinue" service to Customer,
the parties to this Agreement acknowledge and agree that the
actual delivery of electricity to Customer at the Project and at
Customer's 43rd Street Facility shall be performed by Con Edison
pursuant to the Delivery Agreement and any other applicable
rules, regulations or agreements governing the relationship
between Con Edison and Customer and that the "provision" or
"discontinuance" of Low-Cost Power by NYCPUS shall relate to an
allocation of Low-Cost Power with a corresponding change in the
manner in which Customer is billed for that portion of its
consumption of power that is equal to its allocation of Low-Cost
Power, and shall not be construed to limit in any way the amount
of power that Customer shall be entitled to purchase from Con
Edison or the amount of power that Con Edison shall be obligated
-16-
<PAGE>
to sell to Customer pursuant to the Delivery Agreement and any
other applicable rules, regulations, or agreements governing the
relationship between Con Edison and Customer.
Article 3 - TYPE OF SERVICE
3.0 All Low-Cost Power to be sold and distributed pursuant
to the provisions of this Agreement shall be 60 hertz electric
service supplied to NYCPUS from NYPA, pursuant to a resolution
of NYPA's Trustees to be attached hereto as Exhibit IV.
3.1 The points of delivery of all Low-Cost Power supplied
under this Agreement shall be determined in accordance with the
Delivery Agent's procedures for establishing point of service
termination. Customer will deal directly with Delivery Agent in
establishing the service point at which Delivery Agent will
deliver Low-Cost Power to Customer's premises and in
establishing, reinforcing, maintaining and removing Delivery
Agent's facilities related to the provision of service under
this Agreement. Customer will notify NYCPUS of delivery points
and facility modifications and reinforcements so determined.
Upon Customer's request, NYCPUS shall use reasonable efforts to
cause Delivery Agent to accommodate Customer's reasonable needs
and desires in establishing points of delivery and in
establishing, reinforcing, maintaining and removing Delivery
Agent's facilities related to the provision of service under
this Agreement. NYCPUS shall enforce (or commence to enforce
-17-
<PAGE>
and pursue such enforcement diligently) the obligations of
Delivery Agent under the Delivery Agreement in the event that
Delivery Agent does not abide by the terms of the Delivery
Agreement governing its treatment of Customer.
Article 4 - TERM
4.0 Power service pursuant to this Agreement shall begin on
or about May 3, 1993 and shall continue through June 30, 2010,
unless extended pursuant to the provisions of Section 5.3 hereof
or otherwise, or terminated at an earlier date pursuant to the
provisions hereof. Before this Agreement shall become
effective, it shall be subject to approval of the Low-Cost Power
Allocation Board and NYPA.
4.1 Customer shall have the right, to be exercised at
Customer's sole discretion at any time during the term of this
Agreement, to terminate this Agreement effective as of the date
(the "Early Termination Date") to be set forth in a written
notice given by Customer to NYCPUS (the "Early Termination
Notice"), provided that (i) the Early Termination Date shall be
the last day of a NYPA Capability Period, (ii) the Early
Termination Notice shall be given at least twelve (12) months
prior to the Early Termination Date and (iii) the Early
Termination Date shall not occur prior to the end of the fourth
(4th) NYPA Capability Period during which Customer receives
Low-Cost Power pursuant to the terms of this Agreement.
-18-
<PAGE>
Article 5 - QUANTITY OF ELECTRICITY TO BE SUPPLIED
5.0 Beginning on or about May 3, 1993, the City shall
supply 6.0 megawatts of Low-Cost Power to Customer's 43rd Street
Facility. This power shall be supplied to the 43rd Street
Facility until the College Point Power Commencement Date.
5.1 Beginning on the College Point Power Commencement Date,
NYCPUS will provide 6.0 megawatts of Low-Cost Power to Customer
(or such greater amount not to exceed 10.5 megawatts as Customer
may designate in the College Point Power Commencement Notice) at
the Project. NYCPUS shall simultaneously discontinue supplying
Low-Cost Power to Customer's 43rd Street Facility and, subject
to the provisions of Section 2.7 hereof, Customer's power
requirements at the 43rd Street Facility shall thereafter be
supplied by Con Edison at Con Edison's then-applicable rates for
Customer. In no case shall Low-Cost Power be allocated
simultaneously to Customer's 43rd Street Facility and the
Project. The cost of the Low-Cost Power to be provided to the
Project will be further reduced through the reduction provided
as set forth in the General City Law Sections 25-s and 25-t.
NYCPUS shall provide Low-Cost Power to the Project through June
30, 2010 or such later date to which the term of this Agreement
may be extended pursuant to the provisions of Section 5.3 hereof
or otherwise.
5.2 In the event that Customer shall require more than 6.0
megawatts of Low-Cost Power on the College Point Power
-19-
<PAGE>
Commencement Date or at any time thereafter in one or more
incremental increases not to exceed the Maximum Power
Allocation, Customer shall so advise NYCPUS by written notice
(an "Allocation Increase Notice"), which notice shall (i)
specify the first day of the NYPA Capability Period on which
Customer desires such increase or increases to become effective
and (ii) be given at least six (6) months prior to the first day
of such NYPA Capability Period. NYCPUS shall provide Customer
with such increased amounts of Low-Cost Power on the first day
of the NYPA Capability Period specified in the Allocation
Increase Notice; provided, however, that if NYCPUS does not have
sufficient Low-Cost Power to fulfill the request set forth in
any Allocation Increase Notice (taking into account any power
from NYCPUS' Reserved Allocation that NYCPUS has committed to
provide to another customer from the start of the next NYPA
Capability Period), NYCPUS shall fulfill such request to the
full extent that it is able to on the first day of the NYPA
Capability Period designated in the Allocation Increase Notice
and shall thereafter fulfill such request in its entirety on the
first day of the first NYPA Capability Period thereafter on
which it has sufficient Low-Cost Power, but in no event later
than the first day of the NYPA Capability Period occurring on or
immediately after the two (2) year anniversary of such
Allocation Increase Notice. All increases in Contract Demand
shall be in 100 kilowatt increments. Customer's Contract Demand
-20-
<PAGE>
may be permanently reduced upon Customer's request and upon
twelve (12) months notice to NYCPUS, with such changed Contract
Demand always to occur at the beginning of a NYPA Capability
Period and always to occur in 100 Kilowatt increments.
5.3 NYCPUS shall use its best efforts to obtain extensions
of (i) the NYPA/NYCPUS Contract and (ii) NYPA's approval of the
extension of the term of this Agreement and if such extensions
are obtained the term of this Agreement shall be extended and
NYCPUS shall give to Customer the same allocation of Low-Cost
Power for the full duration of any such extension at rates which
will at all times be (i) uniform, non-discriminatory rates for
Low-Cost Power pursuant to applicable law, including, without
limitation, Section l005(d) of the Public Authorities Law, and
the most favorable Con Edison distribution rate for Low-Cost
Power given to any customer in New York City and (ii) further
reduced through the reduction provided in New York City's Energy
Cost Savings Program as set forth in General City Law Section
25-s and 25-t. In the event that the NYPA/NYCPUS Contract is
extended but NYPA refuses to approve the extension of the term
of this Agreement for an allocation of 10.5 megawatts of
Low-Cost Power, NYCPUS shall use best efforts to obtain any
required approvals for the extension of the term of this
Agreement for up to 4.5 megawatts of NYCPUS' Reserved Allocation.
-21-
<PAGE>
Article 6 - USE OF SERVICE
6.0 All Low-Cost Power sold and distributed hereunder
shall be used by Customer for its own use according to the
schedule set forth in Article 5, supra. Customer agrees not to
resell or otherwise redistribute such Low-Cost Power to any
other Persons other than "Permitted Users" (hereinafter
defined). For purposes hereof, Permitted Users shall mean
subtenants, licensees and other occupants of the Project whose
presence at the project facilitates or is in connection with
Customer's use of the Project for printing and uses related
thereto. For example, if Customer were to sublease to an
operator a garage on the Project used by Customer's vehicles,
such operator would be a Permitted User.
Article 7 - BILLING
7.0 Customer agrees to pay City for Low-Cost Power billed
hereunder in accordance with the NYCPUS General Terms and
Conditions and the NYCPUS Service Tariff No. 4. Copies of the
NYCPUS General Terms and Conditions and the NYCPUS Service
Tariff No. 4 are attached hereto as Exhibits V and VI. In the
event that such General Terms and Conditions or Tariff No. 4 are
changed, as provided by Law, Low-Cost Power supplied after such
change is to be paid for in accordance with such change, except
to the extent that such change would conflict with the
provisions of Sections 5.3 and 7.6 hereof. NYCPUS shall provide
-22-
<PAGE>
Customer with timely notice of any such change in the General
Terms and Conditions or Service Tariff No. 4.
7.1 Customer agrees that, within thirty (30) days after the
initiation of service hereunder, it will provide NYCPUS with a
security deposit. The security deposit, as provided in 21 NYCRR
451.1 and in the NYCPUS General Terms and Conditions, shall
equal Five Hundred Sixty Thousand ($560,000) Dollars. NYCPUS
shall hold the security deposit in a separate interest bearing
thirty (30) day, automatically renewing certificate of deposit
at a Customer selected bank from a list provided by NYCPUS. The
deposit shall be held in the account for two years, at which
time, if Customer is not delinquent in the payment of bills to
NYCPUS, the account balance with accrued interest shall be
returned to Customer. If Customer is delinquent, the account
balance shall be used as an offset account. Notwithstanding the
foregoing, if the security deposit is returned to Customer, and
Customer subsequently becomes delinquent in its payments to
NYCPUS under this Agreement, or if NYCPUS determines in
accordance with the applicable provisions of 21 NYCRR 451.1 and
the NYCPUS General Terms and Conditions that such measure is
warranted, NYCPUS may require Customer to again provide a
security deposit equal to two months' estimated billings on the
same terms as for the initial security deposit.
-23-
<PAGE>
7.2 For the purpose of rendering bills to Customer, the
actual demand and billing demand under this Agreement shall be
determined in accordance with the NYCPUS applicable Service
Tariff.
7.3 The City will submit bills to Customer in accordance
with the provisions set forth in the General Terms and
Conditions. In the event that there is a dispute on any item of
a current bill rendered by the City, Customer shall pay such
bill in its entirety within the prescribed period; provided,
however, that upon delivery of a notice by Customer to City of a
billing dispute hereunder, (i) City shall reasonably determine
whether City is obligated to currently pay any such disputed
amount to Delivery Agent or NYPA, in which case Customer is
obligated to currently pay such disputed amount to City, and
(ii) if City has a defense to avoid current payment of such
disputed amount, City shall assert such defense in which case
Customer may avoid current payment of such disputed amount to
City. The City shall promptly notify Customer of its
determination regarding obligations for current payment. In any
event, including disputes regarding past bills, City shall
diligently pursue any defense to payment available to it against
third parties in order to resolve any billing dispute arising
hereunder. If Customer is obligated to pay disputed amounts and
it is thereafter determined that Customer should not have been
obligated to pay all or any portion of such amounts, an
appropriate refund will be made to Customer by the City,
-24-
<PAGE>
together with any interest collected by the City in connection
therewith. Customer may designate by written notice to City an
agent for purposes of receiving bills and making payments under
this Agreement, provided that any such designation shall not
relieve Customer of any liability for such agent's or Customer's
failure to make any payments required hereunder.
7.4 Customer shall arrange directly with Delivery Agent for
establishing, reinforcing, maintaining and removing facilities
related to the interconnection of Customer's facilities to those
of the Delivery Agent. Customer shall be responsible for all
costs lawfully charged by Delivery Agent to establish such
interconnection.
7.5 Customer is on notice that pursuant to the Billing
Adjustment section of the applicable Con Edison Economic
Development Delivery Service Tariff, NYCPUS is authorized to act
as collection agent for Con Edison regarding: (a) a billing
adjustment per kilowatt/hour permitting the assessment of a
charge or credit attributable to a 40-day deferred fuel cost for
the billing period immediately preceding Customer's becoming a
customer of NYCPUS, and (b) a charge representing PASNY's share
of the savings passed on to Madison Square Garden in accordance
with Section 3, Chapter 459, 1982 N.Y. Laws, allocated to
service provided under the Rate Schedule.
-25-
<PAGE>
7.6 Notwithstanding anything to the contrary contained in
this Agreement, throughout the term of this Agreement and any
extension thereof, the rates charged to Customer for Low-Cost
Power shall at all times be (i) uniform, non-discriminatory
rates pursuant to applicable law, including, without limitation,
Section l005(d) of the Public Authorities Law, and the most
favorable Con Edison distribution rate for Low-Cost Power given
to any customer in New York City and (ii) further reduced
through the reduction provided by New York City's Energy Cost
Savings Program as set forth in General City Law Sections 25-s
and 25-t.
Article 8 - APPORTIONMENT OF SERVICE
8.0 If Customer combines service under this Agreement with
power and energy from other sources, the total power and energy
utilized by Customer from all sources at a particular facility
shall be apportioned as determined by the City, consistent with
any applicable requirements of Law, NYPA, and the Delivery
Agreement. The City will consult with Customer prior to
determining any such apportionment.
8.1 The portion of Customer's electricity requirements at a
particular facility in excess of that supplied by the City may
be supplied by Con Edison and billed at the appropriate rates
and charges of Con Edison's "Schedule for Electricity - PSC No.
8". If Customer receives retail electric service from both the
-26-
<PAGE>
City and Con Edison at such facility, then, pursuant to the
Delivery Agreement, Con Edison shall, as to the electricity
purchased by Customer from Con Edison, perform all billing,
metering, collection and customer service functions as it
customarily performs for customers purchasing their full
requirements from Con Edison. Customer, or its designated agent
pursuant to Section 7.3, will deal directly with Con Edison
respecting metering, billing, payment and collection for
Customer's purchases from Con Edison.
Article 9 - EMPLOYMENT AND POWER USAGE LEVELS
9.0 During the term of this Agreement, Customer shall,
subject to the provisions of this Article 9, maintain in New
York City through direct employment or subcontracting the
"Minimum Production Jobs" and the "Minimum Non-Production
Jobs." For purposes of this Agreement, the terms "Minimum
Production Jobs" and "Minimum Non-Production Jobs" shall mean,
respectively, (a) 1,000 full-time equivalent production Jobs and
(b) 2,200 full-time equivalent non-production Jobs, or such
lesser number of full-time equivalent production Jobs or
full-time equivalent non-production Jobs, as the case may be,
that Customer may request and NYCPUS may approve pursuant to the
provisions of Section 9.1 hereof from time to time by written
notice (the "Job Recalculation Notice") given by Customer to
NYCPUS, in conjunction with Customer's annual report provided
-27-
<PAGE>
pursuant to Section 9.2 hereof, as the then current number of
full-time equivalent production and/or non-production Jobs. For
both such categories of Jobs, such Jobs shall be associated with
the 1,000 full-time equivalent production Jobs and the 2,200
full-time equivalent non-production Jobs in each case currently
associated with the New York Times Newspaper in New York City
and the functions performed in connection with such Jobs as of
the date hereof, as such functions may evolve and be modified
and as such Jobs may be replaced over the term of this Agreement.
9.1 Any Job Recalculation Notice given by Customer shall
indicate the basis for the reported change in the Minimum
Production Jobs and/or the Minimum Non-Production Jobs and shall
indicate the effective date or dates of such changes.
Notwithstanding anything to the contrary set forth in this
Agreement, there shall be no reduction in Customer's Contract
Demand or Maximum Power Allocation as the result of a reduction
in the Minimum Production Jobs or the Minimum Non-Production
Jobs if and to the extent that such reductions are due to events
including, but not limited to, industry productivity trends,
staffing and labor agreements, business cycles, operational
needs, technological advances or temporary factors such as
strikes, and Customer's rebuilding, repair, maintenance and
upgrading of its facility and equipment. Each Job Recalculation
Notice shall be accompanied by supporting documentation and
NYCPUS shall approve any variation in employment levels with
-28-
<PAGE>
respect to which Customer has submitted documentation sufficient
in NYPA's and NYCPUS' reasonable opinion to establish such
variation in employment levels. Promptly after its receipt of a
Job Recalculation Notice, NYCPUS shall notify Customer in
writing that either (a) it approves the variation in employment
levels set forth in such Job Recalculation Notice or (b) it
disapproves such variation in employment levels, in which event
it shall set forth in detail its reasons for such disapproval
and specify any variation in employment levels that it does
approve.
9.2 Beginning on February 28, 1994, and on each February
28, during the term of this Agreement, Customer shall provide
NYCPUS with an annual report indicating for the preceding
calendar year, on a monthly basis, the total number of full-time
equivalent production Jobs and full-time equivalent
non-production Jobs at its facilities in New York City. NYCPUS
shall provide Customer with the form of the annual report (Form
RF l), which shall be in the form attached hereto as Exhibit
VII, and the request for its completion, with not less than
sixty days advance notice. Such report shall consist of two
separate Forms RF l - one labeled "Full-Time Equivalent
Production Jobs" and the other labeled "Full-Time Equivalent
Non-Production Jobs" and (i) all references on Form RF 1 to
forms provided to the Unemployment Insurance Division of the New
York State Department of Labor shall be stricken and (ii) the
-29-
<PAGE>
number of employees reported on Form RF 1 shall be the monthly
number of full-time equivalent Jobs computed pursuant to Section
9.9 hereof. Such completed report shall be certified to be
correct by an officer of Customer, or such other person
authorized by Customer to prepare and file such report.
Customer shall reasonably promptly notify NYCPUS of any material
inaccuracies or changed circumstances of which Customer becomes
aware which would render inaccurate or misleading in a material
manner any annual report submitted to NYCPUS pursuant to this
Section. NYCPUS and NYPA also shall have the right to examine
and audit (but no more frequently than twice in any twelve-month
period) on reasonable advance written notice all written and
electronic records and data directly concerning employment
levels of Customer in New York City for the purpose of
determining whether the prescribed number of production and
non-production Jobs are being maintained by Customer in New York
City. The annual report for calendar year 1993 shall include
all twelve (12) months of 1993, even though the term of this
Agreement began in May, 1993.
9.3 In the event that Customer does not maintain in New
York City ninety percent (90%) of the Minimum Production Jobs
and the Minimum Non-Production Jobs in effect from time to time
pursuant to Section 9.0 hereof, NYCPUS may, subject to the
provisions of Article 14 (Force Majeure) hereof, reduce
proportionately Customer's power allocation associated with such
-30-
<PAGE>
category of Jobs in the manner set forth in Section 9.6 hereof.
For the purposes of calculating such proportionate power
reduction, 1 megawatt shall be associated with the Minimum
Non-Production Jobs and the remainder of the then existing
Contract Demand shall be associated with the Minimum Production
Jobs.
9.4 NYCPUS shall determine compliance with the 90% minimum
requirement for each calendar year by comparing the reported
annual average number of production Jobs and non-production Jobs
reported by Customer with the Minimum Production Jobs and the
Minimum Non-Production Jobs, respectively, for such calendar
year as determined pursuant to Section 9.0 hereof. For each
category of Jobs, the annual average number of such Jobs shall
be the sum of the monthly number of such Jobs reported pursuant
to Section 9.2 hereof divided by twelve (including calendar year
1993). It is hereby stipulated that a reduction in the Contract
Demand or Maximum Power Allocation pursuant to this Article
shall not take place if Customer can indicate that any reduction
in the number of Jobs is due to events including but not limited
to, industry productivity trends, staffing and labor agreements,
business cycles, operational needs, technological advances and
such temporary factors as strikes and Customer's rebuilding,
repair, maintenance and upgrading of its facility and
equipment.
-31-
<PAGE>
9.5 If Customer does not comply with the 90% requirement
and fails to cure such non-compliance within ninety (90) days
after its receipt of written notice from NYCPUS, NYCPUS may,
subject to the provisions of Article 14 (Force Majeure) hereof,
permanently reduce the Maximum Power Allocation and the then
current Contract Demand; provided, however, that all future
increases in the Contract Demand, not to exceed the permanently
reduced Maximum Power Allocation, are contingent upon the
submission to NYCPUS of documentation sufficient in NYCPUS'
reasonable opinion to establish increased load requirements. In
the event that NYCPUS reduces the Contract Demand pursuant to
the provisions of this Section 9.5, the reduced Contract Demand
shall be determined by the formula shown below. The Maximum
Power Allocation shall then be immediately reduced by the same
amount as the reduction in the Contract Demand.
Reduced Contract Demand = the sum of:
1.0 Megawatt x reported non-production Jobs
-------------------------------------------
Minimum Non-Production Jobs
plus
(Contract Demand - 1.0 Megawatt) x reported production Jobs
-----------------------------------------------------------
Minimum Production Jobs
Immediately subsequent to any such permanent reduction, the
required number of Jobs pursuant to this Agreement shall be
reduced to the reported number of production and non-production
-32-
<PAGE>
Jobs in the report for the immediately preceding year that
resulted in such power reduction.
9.6 From and after January 1, 1996, if the average of
Customer's six (6) highest Actual Demands for Low-Cost Power
supplied under this Agreement in any consecutive twelve (12)
month delivery period is less than 90% of the then current
Contract Demand, the City may reduce the Contract Demand. The
maximum amount of such reduction shall be the Contract Demand
minus the amount by which the average of the six (6) highest
Actual Demands in such twelve (12) month delivery period is
less than 90% of the Contract Demand. Thus, for example, if
the average of Customer's six (6) highest Actual Demands during
a consecutive twelve (12) month period is 89% of the Contract
Demand, the Contract Demand will be reduced by 1%. Any such
reduction shall be rounded to the nearest 100 kilowatts.
Notwithstanding anything to the contrary contained herein: (i)
in the event that any such consecutive twelve (12) month period
contains one or more "Summer Temporary Reduction Months" (as
such term is hereinafter defined), the number of Actual Demands
averaged for purposes of this Section 9.6 shall be the
remainder of (a) six (6) minus (b) the number of Summer
Temporary Reduction Months during such consecutive twelve (12)
month period (e.g., if July and August were Summer Temporary
Reduction Months, the computation to be performed hereunder
would be with respect to Customer's four (4) highest Actual
Demands during a consecutive twelve (12) month period) and (ii)
-33-
<PAGE>
in the event that any such consecutive twelve (12) month period
contains one or more "Winter Temporary Reduction Months" (as
such term is hereinafter defined), the number of months in such
consecutive twelve (12) month period shall be increased by the
number of Winter Temporary Reduction Months (e.g., if December
were a Winter Temporary Reduction Month, the computation to be
performed hereunder would be with respect to Customer's six (6)
highest Actual Demands during a consecutive thirteen (13) month
period). For purposes hereof: (i) a "Summer Temporary
Reduction Month" shall mean a "Temporary Reduction Month" (as
such term is hereinafter defined) that occurs during the period
designated as a Summer Billing Period by Delivery Agent and
(ii) a "Winter Temporary Reduction Month" shall mean a
Temporary Reduction Month that occurs during the period
designated as the Winter Billing Period by Delivery Agent. For
purposes hereof, a "Temporary Reduction Month" shall mean any
month during which Customer's highest Actual Demand is less
than 90% of the then current Contract Demand due to temporary
causes such as events of force majeure, strikes, damage to or
defects in the construction, design or manufacture of a
facility or equipment, or the upgrading, maintenance or
rebuilding of a facility or equipment.
9.7 Any permanent reduction pursuant to this Article 9
shall be made upon 60 days prior written notice to Customer,
which notice shall be given after the expiration of any
-34-
<PAGE>
applicable cure period, and shall be consistent with the
applicable provisions of Law, the NYPA/NYCPUS Contract, and the
terms of the Delivery Agreement. Before making any such
reduction the City shall give Customer a full and fair
opportunity to present extenuating events and circumstances and
the City shall act in a reasonable manner in making its
determination as to whether circumstances justify making such
reductions.
9.8 Customer may, at any time after having received
service, permanently reduce the Contract Demand in whole 100
kilowatt amounts; provided, however, that Customer shall
provide the City with at least twelve (12) months' prior
written notice of its intent to make such election and such
reduction shall take place as of the first day of a NYPA
Capability Period. Customer's financial obligation with regard
to the Contract Demand and any other charges shall be reduced
accordingly. If requested by Customer, the City will in good
faith endeavor to obtain NYPA approval for such reduction
within a shorter time period.
9.9 For purposes of this Agreement, monthly full-time
equivalent production Jobs and monthly full-time equivalent
non-production Jobs shall be computed separately, using the
following formula:
Monthly Full-Time = Aggregate Monthly Hours
-----------------------
Equivalent Jobs Stipulated Monthly Hours
-35-
<PAGE>
For purposes of this Agreement, the term "Aggregate Monthly
Hours" shall mean the total number of hours credited during the
month being reported on for regular time, overtime, vacation,
holiday, sick leave, disability and other employer-paid hours
for all production or non-production workers, as the case may
be, associated with the Jobs or functions described in the last
sentence of Section 9.0 hereof, whether employed by Customer,
an Affiliate of Customer or one or more subcontractors or
subsubcontractors of Customer or an Affiliate of Customer. For
purposes of this Agreement, the term "Stipulated Monthly Hours"
shall mean, with respect to each month being reported on, the
product of (x) thirty-four (34) hours, multiplied by (y) the
number of weeks in the month being reported on (e.g., 4 3/7
weeks in January, multiplied by 34 equals 150.6 Stipulated
Monthly Hours); provided, however, that Customer may revise the
term "Stipulated Hours" for purposes hereof upon submitting
documentation reasonably satisfactory to NYCPUS that, due to
reasons such as the renegotiation of union contracts, the
average full-time employee of Customer is employed less than
thirty-four (34) hours per week.
Article 10 - INTENTIONALLY OMITTED
-36-
<PAGE>
Article 11 - BREACH OF CONTRACT
11.0 Notwithstanding any other rights and remedies
provided to the City herein or in NYCPUS's General Terms and
Conditions of Service, and without derogation of such rights or
remedies, the City may, after the expiration of any applicable
notice, grace or cure period provided for herein, elect to
terminate this Agreement if Customer materially breaches any of
the following obligations hereunder: (i) the obligation to
enter into the Assignment and Assumption Agreement referred to
in Section 2.1 hereof by October 31, 1993 (unless Customer is
delayed or prevented from doing so by the acts or omissions of
EDC or the City), (ii) the obligation to cause the Construction
Commencement Date to occur within ten (10) years after the date
the Lease is executed, subject to Unavoidable Delays, (iii) the
obligation to cause the Construction Completion Date to occur
by the Scheduled Completion Date, subject to Unavoidable
Delays, (iv) the obligation to make the payments required
pursuant to the terms of this Agreement, (v) the obligation to
avoid an Abandonment of the Project, and (vi) the obligation to
comply with the Job reporting requirements set forth herein.
NYCPUS shall provide Customer with written notice of breach and
notice that the Agreement is subject to termination. As set
forth in the General Terms and Conditions regarding
discontinuance of service, NYCPUS shall afford Customer the
opportunity to cure monetary breach within fifteen days after
-37-
<PAGE>
delivery of such written notice. NYCPUS shall afford Customer
the opportunity to cure (or commence to cure) non-monetary
breach within thirty (30) days. Should Customer not cure (or
commence to cure and diligently pursue such cure) within such
thirty (30) day period, or agree to take such other corrective
action as may be reasonably satisfactory to the Director, this
Agreement is terminable if such non-monetary breach is with
respect to one of the obligations described in the first
sentence of this Section 11.0. In the event of a breach of the
Agreement related to Customer's failure to pay NYCPUS,
termination shall be in accordance with the provisions set
forth in the General Terms and Conditions.
11.1 If this Agreement is terminated because either (i)
Customer does not enter into the Assignment and Assumption
Agreement referred to in Section 2.1 hereof by October 31, 1993
(unless Customer is delayed or prevented from doing so by the
acts or omissions of EDC or the City), (ii) Customer informs
EDC or NYCPUS in writing that it intends to abandon the
Project, (iii) Customer fails to cause the Construction
Commencement Date to occur within ten (10) years of the date
the Lease is executed, subject to Unavoidable Delays, or (iv)
Customer fails to complete construction of the Building by the
Scheduled Completion Date, subject to Unavoidable Delays, or if
any of the events described in subsections (i) through (iv) of
this Section ll.l shall occur after Customer has exercised its
-38-
<PAGE>
option to terminate this Agreement pursuant to Section 4.l
hereof, then Customer shall be liable to repay NYCPUS the value
of Customer's accrued savings, calculated as the difference
between the cost of service at the then-applicable Con Edison
retail rate and the cost of service from NYCPUS's Firm
Industrial Economic Development Nuclear Power Service Tariff
No.4, with non-compounded interest at the rate of 5.73% per
annum.
11.2 The liability of Customer hereunder for Customer's
failure to make payments hereunder shall be limited to the
amount of such payments, with interest at the rate of one and
one-half (l l/2%) percent per month from the date such payment
was due until the date such payment is made. The liability of
Customer hereunder for non-monetary breach of this Agreement or
for any other claim against Customer arising under this
Agreement other than claims described in the first sentence of
this Section 11.2, shall be limited to Customer's accrued
savings, calculated in accordance with the provisions of
Section 11.1 hereof. None of the directors, officers,
principals, partners, shareholders, employees, agents or
servants of Customer shall have any liability (personal or
otherwise) under this Agreement. This Section 11.2 shall
survive the expiration of this Agreement.
-39-
<PAGE>
11.3 Customer and NYCPUS anticipate that the Lease will be
finalized and entered into prior to October 31, 1993.
Customer, the City and EDC have not, as of the date hereof,
reached agreement as to the covenants applicable to Customer
that should be included in the Lease (the "Non-Discrimination
and Affirmative Action Covenants") with respect to:
(i) discrimination against employees or applicants for
employment because of race, creed, religion, color or certain
other statuses with respect to employment decisions, (ii) the
statement in solicitations or advertisements for employees by
or on behalf of Customer that all qualified applicants will be
afforded equal employment opportunity, (iii) non-discrimination
against minority and women-owned businesses in the awarding of
contracts and subcontracts and (iv) the submission of workforce
utilization analyses. Customer, the City, and EDC have also
not reached agreement, as of the date hereof, as to the
remedies (the "Affirmative Action Remedies") that should be
available in the event of a breach by Customer of the
Non-Discrimination and Affirmative Action Covenants. Customer
and NYCPUS hereby agree that upon the execution and delivery of
the Lease and the Assignment and Assumption Agreement in
connection therewith, the Non-Discrimination and Affirmative
Action Covenants and the Affirmative Action Remedies will be
deemed to be incorporated herein by reference (such
incorporation by reference to be retroactive to the date of
-40-
<PAGE>
this Agreement), except to the extent that their application
would be inapplicable to this Agreement or the context may
otherwise require; provided, however, that: (i) any
restrictions contained in the Lease with respect to the
utilization or application of the Affirmative Action Remedies
shall also be applicable to NYCPUS and NYPA hereunder and
(ii) in no event may NYCPUS or NYPA terminate or seek to
terminate this Agreement, reduce or suspend Customer's Contract
Demand or Maximum Power Allocation, or increase the rates
charged to Customer for Low-Cost Power as the result of a
breach of the Non-Discrimination and Affirmative Action
Covenants.
Article 12 - THIRD PARTY BENEFICIARY
Pursuant to NYPA's Procedures for Allocation of Industrial
Power and Enforcement of Contracts (21 NYCRR Part 370), NYPA
shall be a third party beneficiary of the contractual
commitments made by Customer under this Agreement, including
the provisions of Article 2 (Investment in Real Property and
Jobs retention), Article 9 (Employment and Power Usage Levels)
and Article 10 (Affirmative Action), and NYPA shall have the
independent right to enforce all such commitments.
-41-
<PAGE>
Article 13 - RECORDS
Customer agrees to maintain any and all books, documents,
papers and records which are directly pertinent to, and to the
extent necessary to confirm Customer's compliance with, its
obligations under this Agreement, including the real property
investment, Jobs and affirmative action requirements described
herein, for a period of six (6) years after Customer's
compliance with such obligations and to grant access to such
records to the City or NYPA or any of their duly authorized
representatives for the purpose of making audits, examinations,
excerpts, and transcriptions.
Article 14 - FORCE MAJEURE
The term "force majeure" as used herein, shall include but
not be limited to destruction, condemnation, repairs,
rebuilding or defects in the construction, design or
manufacture of part or all of Customer's 43rd Street Facility
or the Project or the equipment located in either such
facility, acts of God, fires, floods, storms, strikes, labor
disputes, riots, insurrections, acts of war (whether declared
or otherwise), unforeseeable acts of governmental, regulatory,
or judicial bodies, or any other unforeseeable causes beyond
the reasonable control of the party claiming force majeure. If
either party because of force majeure is rendered wholly or
partly unable to perform its obligations under this Agreement,
-42-
<PAGE>
except for the obligation to make payments of money, that party
shall be excused from whatever performance is affected by the
force majeure to the extent so affected, provided that:
(a) the non-performing party, within thirty (30) days
after it becomes aware or should have become aware that it
would be unable to perform, gives the other party written
notice describing the particulars of the occurrence;
(b) the suspension of performance is of no greater scope
and of no longer duration than is required by the force majeure;
(c) no obligations of either party which arose before the
occurrence causing the suspension of performance are excused as
a result of the occurrence; and
(d) the non-performing party endeavors to remedy its
inability to perform.
This subparagraph shall not require the settlement of
any strike, walkout, lockout or other labor dispute on terms
which, in the sole judgment of the party involved in the
dispute, are contrary to its interest. It is understood and
agreed that the settlement of strikes, walkouts, lockouts or
other labor disputes shall be entirely within the discretion of
the party having the difficulty. Customer shall assume the
risk for any and all Contract Demand charges and/or other
minimum charges which are lawfully due and owing under NYCPUS'
applicable tariff, and Customer shall pay any and all such
amounts to the City when due, regardless of the occurrence of
-43-
<PAGE>
force majeure, as defined in this Article, except to the extent
that this Agreement expressly provides to the contrary. Upon
the occurrence and continuance of an event of force majeure,
the City agrees to use its best efforts to obtain from NYPA or
Delivery Agent a temporary reduction in the applicable Contract
Demand, or a waiver of Contract Demand or other minimum
charges, to the extent Customer's electricity requirements are
reduced by the occurrence and continuance of such event of
force majeure.
Article 15 - ASSIGNABILITY OF AGREEMENT
This Agreement shall not be assigned without the prior
consent of the City. Any assignee of the rights of the
Customer hereunder shall be subject to all of the terms of this
Agreement. Notwithstanding anything to the contrary contained
herein, Customer shall have the right to assign this Agreement
to an Affiliate of Customer without the City's consent.
Notwithstanding such an assignment, Customer shall remain fully
liable with the performance and observance of the obligations
of Customer under this Agreement.
Article 16 - NOTICES
All notices under this Agreement shall be in writing and
shall be deemed to have been sufficiently given or served for
all purposes as of the date when sent by hand, or by a national
-44-
<PAGE>
overnight courier service, or by certified or registered mail,
return receipt requested, and addressed as follows (or to such
other addresses as may from time to time be designated by the
City or Customer by notice delivered to the other in accordance
with this Article 16):
For the City:
Director
New York City Public Utility Service
75 Park Place - Sixth Floor
New York, New York 10007
For Customer:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Solomon B. Watson IV, Esq.
General Counsel
and to:
The New York Times Company
229 West 43rd Street
New York, New York 10036
Attention: Mr. David Thurm
Executive Director of Project Development
with a copy in the same manner sent to Customer to:
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
Attention: Martin D. Polevoy, Esq.
Article 17 - MODIFICATIONS TO AGREEMENT
All previous communications between the parties hereto,
either verbal or written, with reference to the subject matter
-45-
<PAGE>
of this Agreement are hereby abrogated, and this Agreement, duly
accepted and approved, constitutes the Agreement between the
parties hereto, and no modifications of this Agreement shall be
binding upon the parties or either of them unless such
modifications shall be in writing, duly accepted by Customer and
executed by NYCPUS.
IN WITNESS WHEREOF, the Parties have executed this Agreement
made as of this May 3, 1993 at New York, New York.
Approved as to form: THE CITY OF NEW YORK
/s/ By: /s/
- ---------------------------- ----------------------------
Acting Corporation Counsel Director, New York City
of the City of New York Public Utility Service
THE NEW YORK TIMES NEWSPAPER
DIVISON OF THE NEW YORK
TIMES COMPANY
By: /s/
----------------------------
-46-
<PAGE>
EXHIBIT IV
----------
April 27, 1993
5. Allocation of FitzPatrick Power to Citibank, N.A.,
Republic New York Corporation, and New York Times
Company
--------------------------------------------------
The President submitted the following report:
SUMMARY
- -------
"The Trustees are requested to approve the allocation of
FitzPatrick industrial power to Citibank, N.A. ('Citibank'),
Republic New York Corporation ('Republic'), and the New York
Times Newspaper Division of the New York Times Company ('New York
Times') as listed in Exhibit '5-A'.
BACKGROUND
- ----------
"On March 4, 1993, the Economic Development Power Allocation
Board ('EDPAB') recommended the allocation of 6.6 MW of Economic
Development Power ('EDP') to Citibank and 1.0 MW to Republic for
job retention purposes. The applicable provisions of the
Economic Development Law require the unanimous approval of all
four EDPAB members for job retention allocations. The three
members present on March 4, 1993, voted in favor of approval.
EDPAB intends to meet again within several months to ratify these
recommendations. In the interim it is recommended that the
Authority make temporary allocations of FitzPatrick power to the
companies. When EDPAB confirms its recommendation to the
Authority, the necessary permanent EDP power allocations would
commence.
"On November 24, 1992, the Trustees approved the allocation
of 6.0 MW of EDP to the New York Times on the basis of a
recommendation by EDPAB. The New York City Public Utility
Service ('NYCPUS') has requested the allocation of an additional
4.5 MW of power from the 50 MW block of FitzPatrick industrial
power reserved for NYCPUS and other downstate municipal
distribution agencies ('MDAs'). Approximately 33 MW of this
amount were reserved for NYCPUS.
"The proposed FitzPatrick allocations would be sold to NYCPUS
under an existing Authority contract for resale to the designated
consumers. Service to these companies would commence on or about
May 1, 1993.
<PAGE>
DISCUSSION
- ----------
"Citibank is consolidating its operations and evaluating
relocation options for several divisions particularly its
Financial Institutions and Transaction Services Group ('FITS')
which has an existing operation in Tampa, Florida. After
discussions with the New York City Economic Development
Corporation ('NYCEDC'), Citibank has proposed to commit to retain
most of its non-retail employees in New York City, as well as to
bring some jobs into the city, primarily at four facilities which
would be renovated and upgraded at a cost of $73 million.
"Citibank has requested 6.6 MW of EDP for the energy
intensive FITS operation which will be enlarged at 111 Wall
Street. Citibank would commit to maintain at least 10,500
non-retail jobs in New York City (1,428 of these jobs would be
consolidated at 111 Wall Street), resulting in a ratio of 1,590
jobs per megawatt. The renovation projects will utilize energy
efficient air handling and lighting equipment. Savings are
estimated to be approximately $700,000 annually over Consolidated
Edison Company of New York, Inc. ('Con Edison's') standard rates
for the full allocation which would have a term ending June 30,
2010.
"Republic is a New York City-based commercial bank which has
acquired the Manhattan Savings Bank and Williamsburg Savings
Bank. The bank has examined space options for its growing
operations. The lowest cost sites are in New Jersey, but NYCEDC
has discussed incentives that would help reduce the cost gap,
including an allocation of EDP for back office operations in
Brooklyn. With the proposed 1.0 MW allocation, Republic would
relocate and consolidate its back office and training facilities
at 1 Hanson Place, Brooklyn, and commit to retain 562 jobs at
this location. The bank would also retain at least 1,462 jobs
city-wide. Approximately $4.6 million would be invested in the
Brooklyn building. Energy conservation measures include the
installation of thermopane replacement windows and high
efficiency lighting and investigation of gas absorption air
conditioning for the building. The 15 year allocation will save
an estimated $55,000 annually over Con Edison's standard rates.
"On November 24, 1992, the Trustees approved the allocation
of 6.0 MW of EDP to the New York Times in connection with a
proposal to construct a 1.2 million square foot printing and
distribution facility in College Point, Queens and to maintain
-2-
<PAGE>
a total of 3,000 newspaper jobs in New York City. Beginning in
May 1993, this power will be used at the New York Times facility
on West 43rd Street. When the College Point plant is opened, the
EDP will be transferred to that site.
"NYCPUS has requested allocation of an additional 4.5 MW to
supply to the College Point plant to the extent its total demand
exceeds the 6.0 MW EDP allocation. The total job commitment
would be increased to 3,200 jobs, including 1,000 production
(printing and distribution) and 2,200 non-production jobs. The
increased allocation would be made from the quantity of
FitzPatrick power reserved for NYCPUS as a downstate MDA
contingent upon withdrawal of the required amount from other
NYCPUS customers. The total 10.5 MW allocation would yield a
ratio of 304 jobs per MW.
"The proposed allocations have been reviewed in accordance
with Part 460 of the Authority's Rules and Regulations
(Procedures for Allocation of Industrial Power and Enforcement of
Contracts (21 NYCRR 460 (1988)). The NYCPUS agreements with
Citibank, Republic, and the New York Times (Exhibits '5-B' -
'5-D') provide for reductions in an allocation in the event that
employment or power usage levels are not maintained at specified
levels. Reports regarding employment and affirmative action
commitments and, for job retention purposes, investment in real
property will be submitted to the Authority as provided by
Section 460.4 of the Authority's Rules and Regulations. The
contracts between NYCPUS and each of its proposed customers
require approval of the Authority's Vice President - Industrial
Economic Development.
RECOMMENDATION
- --------------
"The Vice President - Industrial Economic Development
recommends that the Trustees approve the allocation of
FitzPatrick Industrial Power to Citibank, Republic, and the New
York Times as described herein.
"The Senior Vice President - Power Contracts, the Senior Vice
President and General Counsel, the Executive Vice President -
Marketing and Development, and I concur in the recommendation."
In response to questions from Trustee Miller, Mr. Woods
-------------------------------------------------------
explained the job retention framework established by Chapter 32
- ---------------------------------------------------------------
of the Laws of 1987 as well as the procedures adopted and
- ---------------------------------------------------------
implemented pursuant thereto by the Economic Development Power
- --------------------------------------------------------------
Allocation Board.
- -----------------
-3-
<PAGE>
The following resolution, as recommended by the President, was
unanimously adopted:
WHEREAS, the Economic Development Power Allocation Board
has recommended allocations of Economic Development Power to
Citibank, N.A. and Republic New York Corporation; and
WHEREAS, the New York City Public Utility Service has
requested the approval of an allocation of FitzPatrick industrial
power to the New York Times Newspaper Division of the New York
Times Company;
NOW THEREFORE BE IT RESOLVED, That the Authority hereby
approves the allocation of FitzPatrick industrial power to the
companies described in the foregoing report of the President
substantially in accordance with the terms described in such
memorandum; and be it further
RESOLVED, That the resale contracts between the New York
City Public Utility Service and its customers described in the
foregoing report of the President be subject to approval by the
Vice President - Industrial Economic Development; and be it
further
RESOLVED, That the Senior Vice President - Power
Contracts or his designee be, and hereby is, authorized to
execute any and all documents necessary or desirable to
effectuate the above allocations.
-4-
<PAGE>
EXHIBIT V
---------
GENERAL TERMS AND CONDITIONS
APPLICABLE TO THE RATES AND CHARGES OF
THE NEW YORK CITY PUBLIC UTILITY SERVICE
----------------------------------------
The following terms and conditions shall apply to electric
service rendered by the New York City Public Utility Service:
1. Definitions
-----------
"City" The City of New York.
"Con Edison" Consolidated Edison Company of New York,
Inc.
"EDPAB" New York State Economic Development Power
Allocation Board.
"NYCPUS" New York City Public Utility Service.
"NYPA" Power Authority of the State of New York
(also known as the New York Power
Authority).
"Lease and
Operating
Agreement" The Lease and Operating Agreement between
the City of New York and Consolidated
Edison Company of New York, Inc.,
governing the delivery of Niagara/St.
Lawrence hydropower, dated July 1, 1985,
and any renewals or amendments thereof.
"FitzPatrick
Delivery
Agreement" The agreement between the City of New
York and Consolidated Edison Company of
New York, Inc., governing the delivery of
FitzPatrick economic development power,
dated October 23, 1987, as amended, and
any renewals or amendments thereof.
"NYCRR" Official Compilation of Codes, Rules and
Regulations of the State of New York.
"City's Consumers" Any retail customer of NYCPUS receiving
electric service pursuant to a NYCPUS
Service Tariff.
<PAGE>
"Industrial
Economic
Development
Consumer" A City's Consumer who (1) applies to, and
is approved by, NYCPUS for service; (2)
meets the criteria established herein,
including the Lease and Operating
Agreement or the FitzPatrick Delivery
Agreement, whichever is applicable; and
(3) is approved by EDPAB and NYPA, as may
be required, pursuant to 21 NYCRR Part
370 and Part 460.
"Distribution
Agent" or
"Delivery Agent" Con Edison.
2. Applicable Criteria
-------------------
Electricity service shall be supplied to City's Consumers in
accordance with the following, as such may be amended from time
to time, and to the extent of availability of power and energy
from NYPA and access to necessary transmission and distribution
facilities:
- the applicable service tariffs;
- the City's Application for Electric Service to NYPA,
executed by the City on August 12, 1985, and the
accompanying NYPA Service Tariffs, as amended;
- the Lease and Operating Agreement and FitzPatrick
Delivery Agreement;
- Chapters IX and X of Title 21 of the Official
Compilation of Codes, Rules and Regulations of the State
of New York, 21 NYCRR Parts 370 and 460; and
- any and all other applicable laws, rules, regulations,
tariffs, rulings, orders, directives, and guidelines.
3. Rendition of Service
--------------------
(a) Industrial Economic Development Consumers
-----------------------------------------
Potential Industrial Economic Development Consumers
desiring to receive service from NYCPUS will make an
application for service to NYCPUS in such form and at
such times as prescribed by NYCPUS. Applications will
be processed and approved by NYCPUS in accordance with
the requirements described herein and, to the extent
applicable, 21 NYCRR Part 370 and 460, the applicable
-2-
<PAGE>
NYCPUS service tariff, and any regulations or guidelines
adopted by NYCPUS. All allocations of industrial
economic development power shall be subject to approval
by EDPAB and/or NYPA as required by law. Industrial
Economic Development Consumers shall be required to
enter into a power service agreement with NYCPUS and
shall provide such information as may be required, from
time to time, by NYCPUS and its Delivery Agent. Such
City's Consumers shall be required to adhere to any and
all applicable terms and conditions of the City's
Delivery Agent.
(b) Other City's Consumers
----------------------
NYCPUS shall specify the service classifications
eligible to receive power and energy under applicable
tariffs, in accordance with the requirements established
by NYPA. Such City's Consumers shall be required to
adhere to any and all applicable terms and conditions of
the City's Distribution Agent.
4. Load Shapes and Load Factors
----------------------------
(a) Deliveries of power and energy to City's Consumers,
except for Industrial Economic Development Consumers, shall
conform to the load shape of the class of City's Consumers
being served. Such power and energy which does not so
conform may, at the City's option, be reflected as
adjustments in future deliveries or be subject to rejection
by the Distribution Agent.
(b) Industrial Economic Development Consumers which purchase
electricity from both the City and the City's Delivery Agent
shall be supplied by both the City and the Delivery Agent at
the same load factor.
5. Liability
---------
(a) The City and NYCPUS shall not be liable in the event
that the supply of electric service under any of the
foregoing tariffs is interrupted or irregular or defective or
fails from causes beyond their control or through ordinary
negligence of their employees or agents. The City and NYCPUS
shall not be liable for any injury, casualty or damage
resulting in any way from the supply or use of electricity or
from the presence or operation of any structures, equipment,
wires, pipes, appliances or devices on the premises of City's
Consumers or otherwise from any failure of the generation,
transmission, or distribution system, except injuries or
damages resulting from gross negligence on the part of
NYCPUS.
(b) NYCPUS will endeavor to furnish electric service
continuously except:
-3-
<PAGE>
(i) for interruptions or reductions due to
uncontrollable forces;
(ii) for temporary interruptions or reductions which,
in the opinion of NYCPUS, or its suppliers and agents,
are required for power system protection or for
providing temporary emergency assistance to
interconnecting systems; and
(iii) for temporary interruptions or reductions, which,
in the opinion of NYCPUS, or its suppliers or agents,
are necessary or desirable for the purpose of
maintenance, repairs, replacements, installation of
equipment, or investigation and inspection. NYCPUS,
except in case of emergency as determined by it, will
give City's Consumers, to the extent practicable,
reasonable advance notice of such temporary
interruptions or reductions and will exercise due
diligence to remove the cause thereof.
6. Distribution and Customer Billing
---------------------------------
(a) Distribution Agent
------------------
All City's Consumers shall be customers of NYCPUS,
not the Distribution Agent, with respect to the power
and energy supplied under the foregoing service tariffs.
The Distribution Agent shall be responsible only for the
local transmission and distribution of power and energy
to City's Consumers, and such metering, billing and/or
collection functions as described herein and in the Lease
and Operating Agreement or the FitzPatrick Delivery
Agreement, whichever is applicable.
(b) Rates and Charges
-----------------
In addition to the rates and charges specified in
the applicable tariffs, City's Consumers shall be
required to pay, or reimburse the City, for any and all
metering costs and any and all charges incurred by
NYCPUS as a direct result of interconnecting City's
Consumers' facilities with those of Delivery Agent and
supplying electricity to said City's Consumer.
(c) Deposits
--------
Thirty days prior to the initiation of service,
Industrial Economic Development Consumers shall be
required to pay NYCPUS a deposit equal to two months
estimated billings, pursuant to 21 NYCRR
-4-
<PAGE>
section 451.1. The deposit shall be held by NYCPUS for
a period of two years. If, after a two year period, City's
Consumers are not delinquent in the payment of bills, the
deposit shall be refunded promptly, no later than the next bill
for service after such two year period, without
prejudice to NYCPUS' right to require a future deposit
if deemed necessary. Interest shall be paid on the
amount deposited at a rate prescribed annually by NYPA.
(d) Payment of Bills and Late Payment Charges
-----------------------------------------
(i) On or about the tenth day of each month, Industrial
Economic Development Consumers shall receive an
estimated bill statement for the monthly billing period,
indicating the number of kilowatts and and kilowatt
hours estimated to be supplied by NYCPUS during the
billing period and the rates and costs therefor. For
each subsequent bill, NYCPUS will reconcile the
estimated usage with the actual usage for the prior
billing period and the reconciliation amount shall be
reflected in the estimated bill for the current month.
Upon termination of service, a final reconciliation of
any amounts owed by City's Consumers or to be paid by
NYCPUS shall be made. NYCPUS may also make such
reconciliation or adjustments to its rates and charges
as are authorized hereunder or in the applicable NYCPUS
Service Tariff. Where an Industrial Economic
Development Consumer is a retail customer of both NYCPUS
and its Distribution Agent, it shall receive separate bill
statements with regard to each supplier.
(ii) City's Consumers (other than Industrial Economic
Development Customers) shall be billed each month by the
City, through its Distribution Agent. Bills rendered by
NYCPUS, through its Distribution Agent, shall be payable
to said agent in accordance with all applicable rules
and regulations of the Distribution Agent.
(iii) Payment for bill statements rendered by NYCPUS to
Industrial Economic Development Consumers is due on
presentation, if hand delivered, or three days after the
mailing of the bill and is payable by mail, to any duly
authorized collector thereof, or otherwise as may be
specified in the bill statement. A late payment charge
at the rate of one and one half percent (1-1/2%) per
monthly billing period, or such other rate as is
approved by NYPA, may be applied to the account of any
Industrial Economic Development Consumer which is
delinquent in the payment of its bills to NYCPUS. The
charge will be
-5-
<PAGE>
applied to all amounts billed, including arrears, and unpaid
late payment charge amounts applied to previous bills, which
are not received on or before a date specified on the bill.
This includes any additional amounts in cases where NYCPUS
has underbilled, or failed to bill, because the City's
Consumer was receiving service through tampered
equipment. The date so specified shall not be less than
20 days after the date due. The late payment charge
will apply to the amounts found to be owed for each
monthly billing period, including any previous late
payment charges. The late payment charge will not be
applied to the account of any customer who can
demonstrate neither responsibility for the tampering,
nor knowledge that service was received through tampered
equipment.
(e) Discontinuance of Service
-------------------------
(i) NYCPUS may assign to its Distribution Agent the
right to discontinue service or bring any legal action,
as specified in this paragraph, and the Distribution
Agent may take any such action on behalf of NYCPUS,
consistent with the distribution agreement between the
City and said agent. Notwithstanding the foregoing,
NYCPUS reserves the right to discontinue service and/or
to take any other action permitted by law, consistent
with the applicable Lease and Operating Agreement or
FitzPatrick Delivery Agreement with respect to any
City's Consumer who fails to make full and timely
payment of all amounts due, including amounts due for
late payment charges hereunder. In the event that
NYCPUS, or its Distribution Agent, discovers tampering
with equipment or meters, NYCPUS reserves the right to
discontinue service to any City's Consumer and/or bring
any legal action consistent with said Lease and
Operating Agreement or FitzPatrick Delivery Agreement,
to recover damages, including reasonable attorneys fees
and costs, or to take such other action as may be
permitted by law.
(ii) NYCPUS may discontinue service to an Industrial
Economic Development Consumer for failure to pay any and
all amounts due within thirty-five (35) days after
payment was due. Termination will not occur until at
least fifteen (15) days after written notice has been
personally served upon the Industrial Economic
Development Consumer or at least fifteen (15) days after
NYCPUS mails written notice by registered or certified
letter to such customer at the address at which service
is received. If an Industrial Economic Development Consumer
has requested in writing to NYCPUS to have an alternate
-6-
<PAGE>
address for billing purposes, written notice
shall be sent both to the alternate address and to the
premises where service is received. Failure to exercise
any of these termination conditions by NYCPUS shall not
constitute a waiver of any rights and powers set forth
herein.
(f) Determination of Demand
-----------------------
Demand shall be determined in accordance with the
applicable provisions of the Delivery Agent's service
tariffs and any contract between NYCPUS and its
customers.
-7-
<PAGE>
EXHIBIT VI
----------
EFFECTIVE 4/1/93
NEW YORK CITY PUBLIC UTILITY SERVICE
SERVICE TARIFF NO. 4
Firm Industrial Economic
Development Nuclear Service
I. AVAILABILITY
------------
This rate shall be available to specific industrial
economic development consumers ("Customers") designated
by NYCPUS and NYPA or EDPAB, as required by law. (See
General Terms and Conditions.)
II. CHARACTER OF SERVICE:
---------------------
Alternating current, sixty hertz, voltage as available.
III. MONTHLY RATE:
-------------
A. NON-TIME-OF-DAY SERVICE:
------------------------
To Customers with maximum monthly actual demands of less
than 1500 KW. Customers billed under this rate whose
monthly maximum demands are 1500 KW or greater for two
consecutive months shall thereafter be billed under
Time-of-Day Service.
Power charges are billed on the basis of billing
demands. Transmission and delivery charges are billed
on the basis of actual demands.
1) Demand Charge:
--------------
a) High Tension Service
--------------------
Base Power Charge (Summer and Winter) $8.30 per KW
Purchased Power Adjustment Factor $0.77 per KW
Adjusted Power Charge $9.07 per KW
Base Transmission Charge
(Summer and Winter) $1.61 per KW
Purchased Power Adjustment Factor $0.06 per KW
Adjusted Transmission Charge $1.67 per KW
Plus Wheeling Charges:
Summer
------
1st - 900th KW $16.47 per KW
901st KW and over $14.59 per KW
Winter
------
1st - 900th KW $11.93 per KW
901st KW and over $10.05 per KW
<PAGE>
-2-
b) Low Tension Service
-------------------
Base Power Charge (Summer and Winter) $8.97 per KW
Purchased Power Adjustment Factor $0.35 per KW
Adjusted Power Charge $9.32 per KW
Base Transmission Charge
(Summer and Winter) $1.74 per KW
Purchased Power Adjustment Factor ($0.03) per KW
Adjusted Transmission Charge $1.71 per KW
Plus Wheeling Charge:
Summer
------
1st - 900th KW $18.57 per KW
901st KW and over $16.37 per KW
Winter
------
1st - 900th KW $14.03 per KW
901st KW and over $11.82 per KW
2) Energy Charge
-------------
a) High Tension Service 21.55 mills per KWh
Purchased Power Adjustment
Factor 3.98 mills per KWh
Adjusted Energy Charge 25.53 mills per KWh
b) Low Tension Service 23.29 mills per KWh
Purchased Power Adjustment
Factor 2.95 mills per KWh
Adjusted Energy Charge 26.24 mills per KWh
B) TIME-OF-DAY SERVICE:
--------------------
To Customers with maximum monthly actual demands of 1500
KW or greater. Customers billed under this rate
whose monthly maximum demands do not exceed 900 KW for
12 consecutive months shall thereafter be billed under
Non-Time-of-Day Service.
Power charges are billed on the basis of billing
demands. Transmission and delivery charges are billed
on the basis of actual demands.
1) Demand Charge:
--------------
a) High Tension Service
--------------------
Base Power Charge (Summer and Winter) $8.30 per KW
Purchased Power Adjustment Factor $0.77 per KW
Adjusted Power Charge $9.07 per KW
<PAGE>
-3-
Base Transmission Charge
(Summer and Winter) $1.61 per KW
Purchased Power Adjustment Factor $0.06 per KW
Adjusted Transmission Charge $1.67 per KW
Plus Wheeling Charges:
Summer Winter
------ ------
Transmission $6.65 per KW $1.09 per KW
(Monday through
Friday
8:00 A.M. to
6:00 P.M.)
Primary Distribution $11.90 per KW $4.88 per KW
(Monday through
Friday
8:00 A.M. to
10:00 P.M.)
Secondary
Distribution No Charge No Charge
(All hours --
All days)
b) Low Tension Service
-------------------
Base Power Charge (Summer and Winter) $8.97 per KW
Purchased Power Adjustment Factor $0.35 per KW
Adjusted Transmission Charge $9.32 per KW
Base Transmission Charge
(Summer and Winter) $1.74 per KW
Purchased Power Adjustment Factor ($0.03) per KW
Adjusted Transmission Charge $1.71 per KW
Plus Wheeling Charges:
Summer Winter
------ ------
Transmission $6.65 per KW $1.09 per KW
(Monday through
Friday
8:00 A.M. to
6:00 P.M.)
Primary Distribution $11.90 per KW $4.88 per KW
(Monday through
Friday
8:00 A.M. to
10:00 P.M.)
Secondary
Distribution $6.82 per KW $2.03 per KW
(All hours --
All days)
2) Energy Charge
-------------
a) High Tension Service 21.55 mills per KWh
Purchased Power
Adjustment Factor 3.98 mills per KWh
Adjusted Energy Charge 25.53 mills per KWh
b) Low Tension Service 23.29 mills per KWh
Purchased Power
Adjustment Factor 2.95 mills per KWh
Adjusted Energy Charge 26.24 mills per KWh
IV. PROVISIONS APPLICABLE TO RATE:
------------------------------
A. Purchased Power Adjustment Factor. The rate under this
---------------------------------
tariff shall be adjusted by any changes in the
delivered cost of purchased power, pursuant to 21 NYCRR
Section 452.4.
<PAGE>
-4-
B. Contract Demand. The maximum demand to be supplied by
---------------
NYCPUS as set forth in the Power Service Agreement
between a City's consumer and NYCPUS.
C. Billing Demand. Billing demand shall be the greater
--------------
of: a) actual demand, or b) 75 percent of the
Customer's contract demand.
D. Actual Demand. Actual Demand shall be the Customer's
-------------
maximum 30-minute integrated demand established during
the billing period, not to exceed the Contract Demand.
E. Taxes. The rates and charges under this Rate Schedule
-----
shall be increased by the applicable rate of gross
receipts taxes, sales taxes and such other taxes as
NYCPUS may be required to collect by law.
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT dated May 19, 1993 between AFFILIATED
PUBLICATIONS, INC., a Massachusetts corporation located at
135 Morrissey Boulevard, Boston, MA 02107 (the "Company"),
GLOBE NEWSPAPER COMPANY, a Massachusetts corporation located
at the same address (the "Globe"), and WILLIAM O. TAYLOR, an
individual residing at 339 North Street, Medfield,
Massachusetts 02052 (the "Employee").
1. Employment. The Company agrees to employ the
----------
Employee as Chairman and President of the Company and
Chairman, Chief Executive Officer and Publisher of the Globe,
rendering the services and performing the duties prescribed
by the Company's Board of Directors. The Employee agrees,
while employed hereunder, to perform his duties faithfully
and to the best of his ability. The Employee shall be
employed at the Company's offices in Boston, Massachusetts,
and his principal duties shall be performed primarily in
Boston, Massachusetts, except for business trips reasonable
in number and duration. If there should be a Change in
Control of the Company (as defined in Section 5.2), the Globe
shall be substituted for the Company as employer and the
Globe's Board of Directors shall be substituted for the
Company's Board of Directors as the body prescribing the
Employee's duties.
2. Term. The employment of the Employee hereunder
----
shall begin on the date hereof and shall continue through the
earlier of (a) December 31, 1998 or (b) the occurrence of a
Termination Date, as defined in Section 5 (the "Term").
3. Compensation.
------------
3.1. As compensation for the Employee's services
during the Term, the Company shall pay the Employee an
annual base salary at the rate of $382,000 per year,
payable weekly. Prior to the end of each year during
the Term, the Company shall undertake an evaluation of
the services of the Employee during the year then ended
in accordance with the Company's Compensation Program at
the date hereof (the "Program"). The Company shall
consider the performance of the Employee, his
contribution to the success of the Company and entities
under common control with the Company (collectively,
<PAGE>
-2-
"Affiliates"), and other factors and shall fix an annual
base salary to be paid to the Employee during the
ensuing year.
3.2. Notwithstanding the foregoing, the Company may
change the Program from time to time or institute a
successor to the Program, but the Employee's annual base
salary shall in no event be less than his annual base
salary in effect on the date of change adjusted
regularly to reflect increases in the cost of living.
3.3. If the Employee is prevented by disability,
for a period of six consecutive months, from continuing
fully to perform his obligations hereunder, the Employee
shall perform his obligations hereunder to the extent he
is able and the Company may reduce his annual base
salary to reflect the extent of the disability; provided
that in no event may such rate, when added to payments
received by him under any disability or qualified
retirement or pension plan to which the Company or an
Affiliate contributes or has contributed, be less than
one-half of the annual base salary in effect at the time
that such disability commenced. If there should be a
dispute about the Employee's disability, disability
shall be determined by the Board of Directors of the
Company based upon a report from a physician who shall
have examined the Employee. If the Employee claims
disability, the Employee agrees to submit to a physical
examination at any reasonable time or times by a
qualified physician designated by the Chief Executive
Officer and reasonably acceptable to the Employee.
4. Employee Benefits. The Employee shall be entitled
-----------------
to participate in all "employee pension benefit plans," all
"employee welfare benefit plans" (each as defined in the
Employee Retirement Income Security Act of 1974) and all pay
practices and other compensation arrangements maintained by
the Company, on a basis at least as advantageous to the
Employee as the basis on which other similarly situated
executive employees of the Company are eligible to
participate and, except as provided in Section 4.2, on a
basis at least as advantageous to the Employee as the basis
on which he participates therein on the date hereof. Without
limiting the generality of the foregoing, the Employee shall
be entitled to the following employee benefits (collectively,
with the benefits contemplated by this Section 4, the
"Benefits"):
4.1. The Employee shall continue to participate in
the Supplemental Executive Retirement Plan under the
formula in effect on the date hereof; provided that the
Company may from time to time change the Plan or
institute a successor to the Plan, so long as the
<PAGE>
-3-
Employee continues to be entitled to receive benefits in
amounts at least equal to those specified in the Plan as
in effect on the date hereof.
4.2. The Employee and the Employee's dependents
shall be covered by medical insurance comparable in
scope to the coverage afforded on the date hereof, with
only such contribution by the Employee toward the cost
of such insurance as may be required from time to time
from other employees at his level in the Program. If a
Change in Control of the Company, as defined in Section
5.2.2, shall have occurred, the Company may not change
the carriers providing medical insurance immediately
before the change without the consent of the Employee,
which consent will not unreasonably be withheld.
4.3. The Employee shall be covered by the cash
bonus plan currently maintained by the Company and shall
be afforded the opportunity thereunder to receive awards
of percentages of annual base salary specified for his
level in the Program, to be awarded upon the achievement
of reasonable performance goals; provided that the
Company may from time to time change the Program or
institute a successor to the Program, so long as the
Employee continues to be eligible to receive cash bonus
awards of percentages of annual base salary in amounts
at least equal to those specified for his level in the
Program as in effect on the date hereof.
4.4. The Employee shall be eligible each year
during the term of this Agreement to receive stock
options under a stock option plan maintained by the
Company for such numbers of shares and upon such terms
and conditions as determined by the Company's
Compensation Committee. If the Company no longer has a
class of stock publicly-traded by reason of a Change in
Control of the Company, as defined in Section 5.2.2, the
Company's obligation under this Section 4.4 will be
satisfied through options granted by the issuer with
public stock then in control of the Company.
4.5. The Company agrees that if the Employee dies
during the term of this Agreement, the Employee's then
spouse for the duration of her life shall be entitled to
monthly payments equal to 2.5% of the Employee's annual
base salary in effect at the time of his death ("Salary
at Death"). If the Employee is survived by one or more
children less than 23 years of age, 1.25% of the Salary
at Death shall be paid to or for each such child until
that child reaches 23 years of age, provided that each
payment to or for children shall be proportionately
reduced so that the aggregate of the payments for any
month to the spouse and to or for the children shall not
<PAGE>
-4-
exceed 4.167% of the Salary at Death. The aggregate
payments shall be proportionately reduced by the Family
Death Benefits and/or the Normal Form for Married
Participant benefit received by the spouse and children
or other beneficiaries under any qualified retirement or
pension plan to which the Company or any Affiliate
contributes or has contributed (for example, the Family
Death Benefit provided by subsection 6.1 of the Globe
Newspaper Company Retirement Plan and the Normal Form
for Married Participant Benefit provided by subsection
4.3 of that Plan), but in addition to any other death
benefits to which the spouse, the children or other
beneficiaries may be entitled under any other retirement
plan or agreement maintained by the Company or any
Affiliate. Payment to or for a child shall be made to
the child or to a custodian for the child under the
Uniform Transfers to Minors Act (or similar legislation)
or to a trust for the benefit of the child, whether
alone or with his or her siblings, as designated by the
Employee or, in the absence of effective designation, as
determined by the Company in its discretion.
4.6. The Employee shall be entitled to receive a
resignation bonus under the Company's Resignation Bonus
Plan as in effect on the date hereof, based on
compensation and service to the date of termination.
4.7. The Company shall reimburse the Employee from
time to time for the reasonable expenses incurred by the
Employee in connection with the performance of his
obligations hereunder.
4.8. The Employee shall be entitled to legal
holidays and to annual paid vacation in accordance with
the Company's holiday and vacation policy on the date
hereof.
4.9. The Company shall reimburse the Employee for
financial counseling services received, up to $10,000
per year, and shall gross up the reimbursement so that
it will not increase the federal or state income tax
payable by the Employee.
4.10. The Employee shall be entitled to an
automobile, including maintenance and expenses, under
the practice in effect on the date hereof.
Notwithstanding the foregoing, the Company may from time to
time change or substitute a plan or program under which one
or more of the Benefits are provided to the Employee,
provided that the Company first obtains the written consent
of the Employee, which the Employee agrees not unreasonably
to withhold, taking into account his personal situation.
<PAGE>
-5-
5. Termination Date; Consequences for Compensation and
----------------------------------------------------
Benefits
--------
5.1. Definition of Termination Date. The first to
-------------------------------
occur of the following events shall be the Termination
Date:
5.1.1. The date on which the Employee
becomes entitled to receive long-term or shortterm
disability payments by reason of total and
permanent disability;
5.1.2. The Employee's death;
5.1.3. Voluntary resignation after one of
the following events shall have occurred, which
event shall be specified to the Company by the
Employee at the time of resignation: material
reduction in the responsibility, authority, power
or duty of the Employee or a material breach by the
Company of any provision of this Agreement, which
breach continues for 30 days following notice by
the Employee to the Company setting forth the
nature of the breach ("Resignation with Reason");
5.1.4. Voluntary resignation not
accompanied by a notice of reason described in
Section 5.1.3 ("General Resignation");
5.1.5. Discharge of the Employee by the
Company after one of the following events shall
have occurred, which event shall be specified to
the Employee by the Company at the time of
discharge: of a material act by the Employee
against the Company involving moral turpitude,
material willful misconduct in the discharge of his
duties, conviction of the Employee or the entry of
a plea of guilty or nolo contendere by the Employee
to any crime involving moral turpitude, or any
material breach of any term of this Agreement by
the Employee which is not cured within 30 days
after written notice from the Board of Directors of
the Company to the Employee setting forth the
nature of the breach ("Discharge for Cause");
5.1.6. Discharge of the Employee by the
Company not accompanied by a notice of cause
described in Section 5.1.5 ("General Discharge").
5.2. Consequences for Compensation and Benefits.
----------------------------------------------
Following a Termination Date or expiration of this
Agreement and through December 31, 2003, the Company
will furnish to the Employee, at no cost to the
<PAGE>
-6-
Employee, full office facilities with at least half-time
secretarial services at a location selected by the
Employee off the site of the Company's operations. If
the Termination Date occurs by reason of disability,
death, General Resignation, Discharge for Cause or,
before a Change in Control of the Company, Resignation
with Reason, the Company shall pay compensation to the
Employee through the Termination Date and shall pay to
the Employee all Benefits accrued through the
Termination Date, payable in accordance with the
respective terms of the plans, practices and
arrangements under which the Benefits were accrued. If
the Termination Date occurs by reason of General
Discharge or, after a Change in Control of the Company,
Resignation with Reason, (a) all stock options held by
the Employee shall become immediately exercisable and
shall remain exercisable for 30 days after the
Termination Date, (b) the Company shall continue the
health coverage contemplated by Section 4.2 through
December 31, 1998, (c) the Company shall engage for the
Executive, at the Company's expense, outplacement
services appropriate to the Executive's position, for up
to twelve months after the Termination Date, and (d) the
Employee shall be entitled to receive, within 60 days
after the Termination Date, the amount set forth in
Section 5.2.1 or, if Section 5.2.2 is applicable and
yields an amount equal to more than 90% of the amount
set forth in Section 5.2.1 net after all applicable
taxes, the amount set forth in Section 5.2.2.
5.2.1. The present value, calculated using
the Pension Benefit Guaranty Corporation immediate
discount rate for valuing benefits upon plan
termination, of (a) the sum of (i) 125%
of the Employee's annual base salary at the
Termination Date and (ii) the target bonus for the
year in which the Termination Date occurs, (b)
multiplied by the number of weeks between the
Termination Date and December 31, 1998 and (c)
divided by 52.
5.2.2. If a Change in Control of the
Company shall have occurred before the Termination
Date, one dollar less than the amount which is
three times the Employee's "base amount" of
compensation and benefits, as defined in Section
280G of the Internal Revenue Code of 1986.
A Change in Control of the Company shall occur upon the
first to occur of the date when (a) persons who were
Directors of the Company on May 19, 1993 no longer
constitute a majority of the Board of Directors of the
Company or (b) a person other than the trustees of
<PAGE>
-7-
either or both of the (i) Taylor Voting Trust created by
an agreement dated October 1, 1954, as from time to time
amended, or (ii) the trust created under the will of
Eben D. Jordan or any voting trust created to supersede
or succeed such testamentary trust, "beneficially owns"
(as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) in the aggregate 50% or
more of the outstanding shares of capital stock entitled
to vote generally in the election of the Directors of
the Company. If the payments made pursuant to this
Section 5.2 give rise to an excise tax under Section
4999 of the Internal Revenue Code of 1986, the Company
shall also pay to the Employee or directly to the
Internal Revenue Service in a timely fashion an amount
sufficient, after federal and state income taxes, to pay
the excise tax so payable and all directly related
interest and penalties (whether reported initially or
subsequently assessed). In the event of a dispute
between the Company and the Employee with respect to the
amount contemplated by the preceding sentence, the
matter shall be determined (at the Company's expense) by
an independent nationally-recognized accounting firm
reasonably acceptable to both parties; provided,
however, that the Employee shall cooperate with the
Company in his tax reporting position and any defense
thereof (which the Company shall control) in order to
minimize the amount of such payments to the extent the
Company has a reasonable legal basis therefor.
5.3. Liquidated Damages; No Duty to Mitigate
-----------------------------------------------
Damages. The amounts payable pursuant to Section 5.2
-------
shall be deemed liquidated damages for the early
termination of this Agreement and shall be paid to the
Employee regardless of any income the Employee may
receive from any other employer, and the Employee shall
have no duty of any kind to seek employment from any
other employer during the balance of the Term.
6. Indemnification. The Company shall indemnify the
---------------
Employee against all loss, cost, liability and expense
arising from the Employee's service to the Company or any
Affiliate, whether as officer, director, employee, fiduciary
of any employee benefit plan or otherwise, upon terms at
least as favorable to the Employee as those provided by the
Articles of Organization and By-laws of the Company on the
date hereof.
7. Agreement Not to Compete. The Employee agrees
--------------------------
that, while serving as an Employee of the Company, he will
not serve as an employee or director of any business entity
other than the Company and its Affiliates, but may serve as a
director of a reasonable number of not-for-profit
corporations and may devote a reasonable amount of time to
<PAGE>
-8-
charitable and community service. For the period beginning
on the Termination Date and continuing for the number of
weeks or years specified below opposite the termination
benefit payable to the Employee, the Employee shall not
engage, directly or indirectly, in the newspaper business in
the Boston Consolidated Metropolitan Statistical Area as
defined on December 31, 1992:
Termination Benefit Period
----------- ------- ------
Amount set forth in Longer of (a) number of
Section 5.2.1 weeks between Termination
Date and December 31, 1988
or (b) one year
Amount set forth in 3 years
in Section 5.2.2
Neither the amount set 1 year
forth in Section 5.2.1
nor the amount set forth
in Section 5.2.2
The Employee may hold stock or a limited partnership interest
of 5% or less in any publicly-traded entity engaged in such
newspaper business without violating this Agreement.
8. Agreement Not to Solicit. For one year following
-------------------------
any Termination Date, regardless of the reason, the Employee
shall not solicit any employee of the Company or an Affiliate
to leave such employment and to provide services to the
Employee or any business entity by which the Employee is
employed or in which the Employee has a material financial
interest. Soliciting a former employee of the Company and
its Affiliates to provide such services shall not be a
violation of this Agreement.
9. Confidential Information. Unless the Employee
-------------------------
shall first secure consent of the Company, the Employee shall
not disclose or use, either during or after the Term, any
secret or confidential information of the Company or any
Affiliate, whether or not developed by the Employee, except
as required by his duties to the Company or the Affiliate.
10. Arbitration. In the event that any party hereto
-----------
has any claim hereunder, the party shall promptly notify each
other party of such claim. If within 30 days of the receipt
of such notice of claim, the parties cannot agree on a
resolution of such claim, the parties agree to submit such
dispute to binding arbitration to be held in Boston,
Massachusetts under the rules of the American Arbitration
Association. Any such arbitration shall be conducted by
<PAGE>
-9-
three arbitrators, one of whom shall be selected by the
Employee, one of whom shall be selected by the Company and
the Globe and one of whom shall be selected by the
arbitrators so selected. The expenses of any such
arbitration shall be paid by the non-prevailing party, as
determined by the final order of the arbitrators.
11. Guarantee. The Globe guarantees the full and
---------
prompt payment and performance by the Company of all its
obligations under this Agreement. This guarantee is in
consideration of past and future services by the Employee to
the Globe, and this guarantee is intended to take effect as a
sealed instrument under the laws of Massachusetts.
12. Notices. Whenever under this Agreement any notice
-------
is to be given by the Company, the Globe or the Employee to
the others, such notice shall be written and shall be
delivered by hand, if to the Company or the Globe, at 135
Morrissey Boulevard, Boston, MA 02107, Attention:
Treasurer, and if to the Employee, at his address specified
above or at such other address as the Employee shall furnish
to the Company in writing.
13. Governing Law. This Agreement shall be deemed a
--------------
contract made and performed in the Commonwealth of
Massachusetts, and shall be governed by the laws of the
Commonwealth of Massachusetts.
14. Entire Agreement; Amendment. This Agreement
------------------------------
constitutes the entire agreement of the parties. This
Agreement supersedes the Agreement between the Globe and the
Employee dated October 24, 1986 and any other individual
agreement between the Employee and the Company and/or the
Globe and may be altered or amended or any provision hereof
waived only by an agreement in writing signed by the party
against whom enforcement of any alteration, amendment, or
waiver is sought. No waiver by any party of any breach of
this Agreement shall be considered as a waiver of any
subsequent breach.
15. Binding Obligations. This Agreement shall be
--------------------
binding upon and inure to the benefit of the Company and the
Globe and their successors and assigns and the Employee and
his personal representatives.
16. Assignability. Neither this Agreement nor any
------------
benefits payable to the Employee hereunder shall be assigned,
pledged, anticipated, or otherwise alienated by the Employee,
or subject to attachment or other legal process by any
creditor of the Employee, and notwithstanding any attempted
assignment, pledge, anticipation, alienation, attachment, or
other legal process, any benefit payable to the Employee
hereunder shall be paid only to the Employee or his estate.
<PAGE>
-10-
IN WITNESS WHEREOF, the Company and the Globe, by their
officers hereunto duly authorized, and the Employee have
signed and sealed this Agreement as of the date first written
above.
AFFILIATED PUBLICATIONS, INC.
By: s/ William B. Huff
---------------------------
Executive Vice President
GLOBE NEWSPAPER COMPANY
By: s/ Richard C. Ockerbloom
---------------------------
President
s/ William O. Taylor
-------------------------------
William O. Taylor
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
Affiliated Publications, Inc. (the "Company") hereby
restates, effective September 15, 1993, this Executive
Supplemental Retirement Plan, previously known as the
Executive Deferred Compensation Plan I, (the "Plan") for the
benefit of executives of the Company and its affiliates listed
on Exhibit A (collectively, the "Executives"):
------- -
1. Purpose. The purpose of this Plan is to provide
-------
supplemental retirement payments and supplemental death
payments for Executives in salary grade 15 and above who
become entitled to receive benefits under the Globe Newspaper
Company Retirement Plan, as in effect from time to time (the
"Retirement Plan"). Capitalized terms used herein shall have
the meanings given them in the Retirement Plan unless
otherwise defined in this Plan.
2. Supplemental Retirement Payments. The Company or an
------------ ---------- --------
affiliate shall pay to each Executive who has completed 36
months in this Plan (or to such person or persons as may at
that time be entitled to receive payments with respect to such
an Executive under the Retirement Plan) the amount by which
(a) any benefit that would have been payable under the
Retirement Plan if (i) the expression "1.83-1/3%" in the
definition of "Gross Amount" in the Retirement Plan were
changed to "2%," and (ii) clause (b) of the definition of
---
"Gross Amount" were changed to read "the number of his/her
Years of Accrual Service not in excess of 25 plus, if the
Executive had more than 25 Years of Accrual Service, his/her
Additional Earned Service, as defined in Section 2 of the
Supplemental Executive Retirement Plan" and (iii) his/her
---
regular compensation and regular annual bonuses (including any
amounts deferred under the Affiliated Publications, Inc.
Deferment Plan for Key Executives) were included in the
calculation of the accrued amount under the Retirement Plan
(except that for purposes of calculating this amount, the
period used for calculating the average monthly rate of
compensation will be the 260 consecutive weeks prior to
normal retirement date or date of earlier termination), and
---
(iv) the amount so calculated were payable without reference
to any benefit limits affecting the Executive other than
limits on the Family Death Benefit exceeds (b) the sum of (i)
the benefit actually paid from time to time under the
<PAGE>
-2-
Retirement Plan and (ii) the appropriate offset amount, as
defined in the Retirement Plan. The amount payable with
respect to an Executive who shall have completed less than 36
months in this plan shall be calculated as set forth in the
preceding sentence but excluding therefrom all service and
compensation before the Executive became listed on Exhibit A.
------- -
Supplemental retirement payments hereunder shall be made on
the same dates and over the same period as payments under the
Retirement Plan are made. The Additional Earned Service for
any Executive who was in salary grade 15 or 16 when last
employed by the Company or an affiliate shall be .5 times the
number by which the Executive's Years of Accrual Service, not
to exceed 30, exceed 25; and the Additional Earned Service for
any Executive who was in salary grade 17 or higher when last
employed shall be .75 times the number by which the
Executive's Years of Accrual Service, not to exceed 35, exceed
25. Exhibit A shall state for each employed Executive his/her
------- -
salary grade.
3. Return to Active Employment Following Commencement of
------ -- ------ ---------- --------- ------------ --
Benefit. In the event an Executive who has begun to receive a
-------
benefit hereunder is reemployed by the Company or an affiliate
and his/her benefit under the Retirement Plan is suspended,
his/her benefit shall be suspended during the period of such
reemployment that benefits under the Retirement Plan are
suspended. Upon his/her subsequent retirement or earlier
termination of employment, he/she shall become entitled to an
increased benefit, reduced by the actuarial equivalent of the
payments made to him/her prior to reemployment.
4. Supplemental Death Payments. The Company, directly
------------ ----- --------
or through an insurance trust or other vehicle, shall pay as a
supplemental death benefit to the designated beneficiary of
an Executive an amount equal to (a) the product of (i) his/her
regular annual compensation from the Company and its
affiliates in effect on his/her date of death or his/her date
of retirement, whichever is applicable, and (ii) the
multiplier specified below for the status of Executive at the
time of death (the "Multiplier") less the aggregate amount of
life insurance payable upon the death of the Executive under
policies, plans and programs paid for by the Company and its
affiliates:
<PAGE>
-3-
Executive's Status
at Date of Death Applicable Multiplier
------------------------------------------------------
(1) Employed by Company and/or Multiplier set
its subsidiaries, listed opposite name on
on Exhibit A and less than Exhibit A
------- - ------- -
65 years of age
(2) Employed by Company and/or 50% of Multiplier set
its subsidiaries, listed opposite name on
on Exhibit A and 65 years Exhibit A
------- - ------- -
of age or older
(3) Retired from employment 50% of Multiplier set
by Company and its opposite name on
subsidiaries at any time Exhibit B
------- -
after 36 months prior to
Normal Retirement Date
(4) Employed by Company and/or Multiplier set
its subsidiaries, Normal opposite name on
Retirement Date has not Exhibit C
------- -
occurred but taken off
Exhibit A within 36 months
------- -
prior to Normal Retirement
Date
(5) Listed on Exhibit D Multiplier set
------- -
opposite name on
Exhibit D
------- -
"Normal Retirement Date" of an Executive means the first day
of the month coinciding with or next following the first of
the following events (a) his/her 65th birthday or, (b) his/her
62nd birthday if the Executive has then completed 30 calendar
years in which the Executive has 1,000 Hours of Service.
5. Effect on Other Agreements. Nothing in this Plan
------ -- ----- ----------
shall limit the right of an Executive to receive payments
pursuant to any other agreement if such payments are greater
than the supplemental payments contemplated by Sections 2 and
3 of this Plan.
6. Vesting. If an Executive completes 10 years of
-------
employment with the Company and its affiliates, but is removed
from Exhibit A before payments begin under the Retirement
------- -
Plan, his/her name shall be added to Exhibit D together with
------- -
the date on which he/she was removed from Exhibit A and
------- -
<PAGE>
-4-
his/her length of service as of that date, and the amount
contemplated by Section 2 shall be paid to the Executive when
such payments begin, subject to forfeiture under Section 7.
In that event, the amount payable shall be calculated with
regard to compensation, if any, from the Company and its
affiliates after removal from Exhibit A, but without regard to
------- -
length of service after that date. If the Executive fails so
to complete 10 years of employment and is so removed, he/she
shall have no benefit under this Plan.
7. Forfeiture. The right of any Executive to a benefit
----------
under this Plan shall be forfeited if the Executive is
discharged for gross neglect of duty, insubordination or
serious misconduct. No Executive shall at any time either
during employment or, following his/her retirement, during the
period in which any payments are being made to him/her
pursuant to this Plan carry on activities which, in the
opinion of the Company, are plainly detrimental in a material
way to the best interests of the Company or its affiliates.
Upon making a determination that the activities of any
Executive are so detrimental, the Company shall so inform the
Executive by written notice. If the Executive shall not cease
and terminate such detrimental activities within 30-day period
from receipt of such written notice, the Company shall have no
further obligations under this Plan, and all payments to and
rights and benefits of the Executive, any designated
beneficiary or beneficiaries or any contingent beneficiary
hereunder shall immediately cease and terminate and be
forfeited and the Company shall have no further liability
hereunder.
8. Unsecured Rights. The rights of each Executive,
--------- ------
his/her designated beneficiary or beneficiaries and any
contingent beneficiary shall be solely those of a general,
unsecured creditor of the Company. The Company shall be under
no obligation to set aside or segregate any funds or resources
of any kind to meet any of its obligations hereunder, and no
one shall have any rights on account of this Plan in or to any
of the specific funds or resources of the Company.
9. Amendment; Revision of Exhibits A-D. The Company may
--------- -------- -- -------- - -
amend this plan in any way at any time by action of its Board
of Directors, but no amendment shall deprive any Executive of
rights vested pursuant to Section 6. In addition, Exhibits A-
-------- -
D may be replaced at any time by new Exhibits A-D, changing
- -------- - -
<PAGE>
-5-
one or more of the Executives listed thereon, their salary
grades or their Multipliers, signed and dated by either the
Chief Financial Officer of the Company or the Director of
Executive Compensation of the Company. The most recently
executed Exhibits A-D shall control.
-------- - -
IN WITNESS WHEREOF, Affiliated Publications, Inc.,
pursuant to action by its Board of Directors on September 15,
1993, has caused this restatement to be executed and delivered
by its Clerk as of September 15, 1993.
AFFILIATED PUBLICATIONS, INC.
By:_____________________________
Catherine E. C. Henn, Clerk
<PAGE>
Exhibit A
---------
AFFILIATED PUBLICATIONS, INC.
-----------------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
As of September 15, 1993
------------------------
Death
Benefit
Name Salary Grade Multiplier
---- ------------ -----------
Group A
William Connolly 17 4
Helen Donovan 18 4
John Driscoll 18 4
Frank Grundstrom 18 4
Catherine Henn 18 4
William Huff 22 4
Michael Ide 18 4
Timothy Leland 17 4
Godfrey Kauffmann 18 4
Loretta McLaughlin 17 4
Robert Murphy 18 4
Paul Norman 17 4
Carl Ockerbloom 27 4
Mary Jane Patrone 18 4
Oliver Rodman 18 4
Matthew Storin 23 4
Benjamin Taylor 24 4
Stephen Taylor 22 4
William O. Taylor 30 4
Gregory Thornton 18 4
Group B
Thomas Ashbrook 15 3
Stephen Cahow 16 3
Richard Daniels 16 3
Harriet Gould 15 3
Ronald Kuzoian 15 3
Alfred Larkin 16 3
Robert Manning 16 3
Mary Marty 15 3
Gregory Moore 15 3
Thomas Mulvoy 16 3
James Regan 15 3
Signed in accordance with Section 9 of the Supplemental Executive
Retirement Plan.
/s/ Alexander B. Hawes, Jr.
___________________________________
Alexander B. Hawes, Jr.
Director of Executive Compensation
<PAGE>
Exhibit B
---------
AFFILIATED PUBLICATIONS, INC.
-----------------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
As of September 15, 1993
------------------------
Death
Benefit
Name Multiplier
---- -----------
John Mullin 4
Daniel Orr 4
Millard Owen 4
David Stanger 4
John Reid 4
Robert A. King 3
Signed in accordance with Section 9 of the Supplemental Executive
Retirement Plan.
/s/ Alexander B. Hawes, Jr.
___________________________________
Alexander B. Hawes, Jr.
Director of Executive Compensation
<PAGE>
Exhibit C
---------
AFFILIATED PUBLICATIONS, INC.
-----------------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
As of September 15, 1993
------------------------
Death
Benefit
Name Salary Grade Multiplier
---- ------------ ----------
(None as of September 15, 1993.)
Signed in accordance with Section 9 of the Supplemental Executive
Retirement Plan.
/s/ Alexander B. Hawes, Jr.
___________________________________
Alexander B. Hawes, Jr.
Director of Executive Compensation
<PAGE>
Exhibit D
---------
AFFILIATED PUBLICATIONS, INC.
-----------------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
As of September 15, 1993
------------------------
Date of Service Death
Removal From as of Benefit
Name Exhibit A Removal Multiplier
---- --------- ------- -----------
John P. Giuggio October 26, 1992 42 years 4*
Martin F. Nolan October 26, 1992 24 years 3
* Reduces to two as of 65th birthday.
Signed in accordance with Section 9 of the Supplemental Executive
Retirement Plan.
/s/ Alexander B. Hawes, Jr.
___________________________________
Alexander B. Hawes, Jr.
Director of Executive Compensation
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY(1)(2)
<TABLE> <CAPTION>
JURISDICTION OF
INCORPORATION OR
NAME OF SUBSIDIARY ORGANIZATION
- ------------------------------------------------------------------------------ -------------------
<S> <C>
Affiliated Publications, Inc.................................................. Massachusetts
Affiliated Securities Corp.................................................. Massachusetts
ARNY, Inc................................................................... Massachusetts
Globe Newspaper Company..................................................... Massachusetts
Boston Globe Investments, Inc............................................ Massachusetts
Zakrewski Ltd. Partnership (99%)....................................... Massachusetts
Wilson Tisdale Company................................................... Massachusetts
Community Newsdealers Inc................................................ Massachusetts
Globe Specialty Products, Inc............................................ Massachusetts
Retail Sales, Inc........................................................ Massachusetts
Comet-Press Newspapers, Inc................................................... Delaware
Crossroads Holding Corporation................................................ New Jersey
Cruising World Publications, Inc.............................................. Delaware
Donohue Malbaie Inc. (49%).................................................... Canada
Fernandina Beach News-Leader, Inc............................................. Florida
Gainesville Sun Publishing Company............................................ Florida
Gaspesia Pulp and Paper Company Ltd. (49%).................................... Canada
Golf Digest/Tennis, Inc....................................................... Delaware
Golf World Limited............................................................ United Kingdom
Hendersonville Newspaper Corporation.......................................... North Carolina
International Herald Tribune S.A. (50%)....................................... France
Lake City Reporter, Inc....................................................... Florida
Lakeland Ledger Publishing Corporation........................................ Florida
London Bureau Limited......................................................... United Kingdom
Northern SC Paper Corporation (80%)........................................... Delaware
Madison Paper Industries (partnership)...................................... Maine
NYT 1896T, Inc................................................................ Delaware
NYTRNG, Inc................................................................... Delaware
NYT Special Services, Inc. ................................................... Delaware
Ocala Star-Banner Corporation................................................. Florida
Retail Magazines Marketing Company, Inc....................................... New York
Time Distribution Services (partnership) (37%).............................. New York
Rome Bureau S.r.l............................................................. Italy
Sarasota Herald-Tribune Co.................................................... Florida
Sebring News-Sun, Inc......................................................... Florida
The Dispatch Publishing Company, Inc.......................................... North Carolina
The Family Circle, Inc........................................................ Iowa
The Houma Courier Newspaper Corporation....................................... Delaware
The Leesburg Daily Commercial, Inc............................................ Florida
The New York Times Broadcasting Service, Inc.................................. Tennessee
Interstate Broadcasting Company, Inc........................................ New York
The Times Southwest Broadcasting, Inc....................................... Arkansas
The New York Times Distribution Corporation................................... Delaware
The New York Times Sales, Inc................................................. Delaware
The New York Times Syndication Sales Corporation.............................. Delaware
The Palatka Daily News, Inc................................................... Florida
Times Leasing, Inc............................................................ Delaware
Times On-Line Services, Inc................................................... New Jersey
TSP Newspapers, Inc........................................................... Delaware
Times Daily, Inc............................................................ Alabama
Wilmington Star-News, Inc..................................................... New York
WNEP-TV, Inc.................................................................. Pennsylvania
</TABLE>
- ---------------
(1) 100% owned unless otherwise indicated.
(2) The names of certain subsidiaries have been omitted because,
considered in the aggregate, as a single subsidiary, they would not
constitute a significant subsidiary.
