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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
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For the fiscal year ended Commission File number: 0 - 13020
December 31, 1994
WESTWOOD ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3980449
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9540 Washington Boulevard, Culver City, CA 90232
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (310) 204-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
____________________ on which registered
_____________________
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(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 (or for such shorter
period that the registrant was required to file such reports), 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 Common Stock held by non-affiliates as
of March 1, 1995 was approximately $285 million.
As of March 1, 1995, 30,935,152 shares of Common Stock were
outstanding and 351,733 shares of Class B Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for its
annual meeting of shareholders (which will be filed with the Commission
within 120 days of the registrant's last fiscal year end) are
incorporated in Part III of this Form 10-K.
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PART I
Item 1. Business
General
Westwood One, Inc. (the "Company" or "Westwood One") is the leading
producer and distributor of nationally sponsored radio programs and is
the nation's second largest radio network.
The Company's principal source of revenue is selling radio time to
advertisers through one of its two operating divisions: Westwood One
Radio Networks and Westwood One Entertainment (the "Divisions"). The
Company generates revenue principally by its Divisions entering into
radio station affiliation agreements to obtain audience and commercial
spots and then selling the spots to national advertisers. The Company
is strategically positioned to provide a broad range of programming and
services which both deliver audience to advertisers and news, talk,
sports, and entertainment programs to radio stations.
Westwood One Radio Networks offers radio stations three traditional news
services, CNN Radio, NBC Radio Network and the Mutual Broadcasting
System, plus youth-oriented network news and entertainment programming
from The Source, in addition to eight 24-hour satellite-delivered
continuous play music formats and weekday and weekend news and
entertainment features and programs.
Westwood One Entertainment produces music, sports, talk and special
event programming. These programs include: countdown shows; music and
interview programs; live concert broadcasts; major sporting events
(principally covering the NFL, Notre Dame football and other college
football and basketball games); live, personality intensive talk shows;
and exclusive satellite simulcasts with HBO and other cable networks.
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The Company's programs are broadcast in every radio market in the United
States measured by The Arbitron Ratings Company ("Arbitron"), the
leading rating service, as well as being broadcast internationally.
Westwood One, through its Divisions, enables national advertisers to
purchase advertising time and to have their commercial messages
broadcast on radio stations throughout the United States, reaching
demographically defined listening audiences. The Company delivers both
of the major demographic groups targeted by national advertisers: the
25 to 54-year old adult market and the 12 to 34-year-old youth market.
The Company currently sells advertising time to over 300 national
advertisers, including each of the 25 largest network radio advertisers.
Radio stations are able to obtain quality programming from Westwood One
to meet their objective of attracting larger listening audiences and
increasing local advertising revenue. Westwood One, through the
development of internal programming as well as through acquisitions, has
developed an extensive tape library of previously aired programs,
interviews, live concert performances, news and special events. The
Company uses its library as a major source of new programming,
enhancing the Company's future programming and revenue generating
capabilities.
Industry Background
Radio Broadcasting
As of January 1, 1995, there were approximately 9,750 commercial radio
stations in the United States. The radio broadcast industry, however,
remains highly fragmented with no broadcaster permitted to own more than
40 radio stations. This fragmentation is due primarily to FCC
limitations on multiple station ownership.
A radio station selects a style of programming ("format") to attract a
target listening audience and thereby attract commercial advertising
directed at that audience. There are many formats from which a station
may select, including news, talk, sports and various types of music and
entertainment programming.
The diversity in program formats has intensified competition among
stations for local advertising revenue. A radio station has two
principal ways of effectively competing for these revenues. First, it
can differentiate itself in its local market by selecting and
successfully executing a format targeted at a particular audience thus
enabling advertisers to place their commercial messages on stations
aimed at audiences with certain demographic characteristics. A station
can also broadcast special programming, sporting events or national news
product, such as supplied by Westwood One, not available to its
competitors within its format. National programming broadcast on an
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exclusive geographic basis can help differentiate a station within its
market, and thereby enable a station to increase its audience and local
advertising revenue.
Radio Advertising
Radio advertising time can be purchased on a local, regional or national
basis. Local purchases allow an advertiser to select specific radio
stations in chosen geographic markets for the broadcast of commercial
messages. However, this process can be expensive and time-consuming,
and may not permit the advertiser to select the specific program in
which its advertisements will be broadcast. Local and regional
purchases are typically best suited for an advertiser whose business or
ad campaign is in a specific geographic area. Advertising purchased
from a radio network is one method by which an advertiser targets its
commercial messages to a specific demographic audience. A national
advertising purchase can enable an advertiser to achieve its objective
with one purchase, at a lower cost per listener, and to select a
particular program environment in which its advertisements will be
broadcast.
In recent years the increase in the number of program formats has led to
more demographically specific listening audiences, making radio an
attractive, alternative medium for national advertisers. In addition,
nationally broadcast news, concerts and special event programming have
made radio an effective medium of reach (size of listening audiences) as
well as frequency (number of exposures to the target audience).
To verify audience delivery and demographic composition, specific
measurement information is available to national advertisers by
independent rating services such as Arbitron and Statistical Research,
Inc.'s RADAR. These rating services provide demographic information
such as the age and sex composition of the listening audiences.
Consequently, national advertisers can verify that their advertisements
are being heard by their target listening audience.
Business Strategy
Westwood One provides targeted radio audiences and commercial spots to
national advertisers through its recognized programming and other
network products. The Company, through its various radio networks,
produces and distributes quality programming to radio stations seeking
to increase their listening audience and improve local and national
advertising revenue. The Company sells advertising time within its
programs to national advertisers desiring to reach large listening
audiences nationwide with specific demographic characteristics.
In 1993 the Company developed and implemented a strategy to focus on its
core radio network business and to reduce debt by divesting of all other
businesses. In refocusing on its core network and radio syndication
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business, the Company has concentrated on across-the-board cost
reductions in order to improve profitability and, in February 1994, the
Company took a major step to enhance its future and ability to compete
by acquiring Unistar Radio Networks, Inc. ("Unistar") for $101,300,000
plus expenses along with the following additional matters in connection
with the acquisition:
(a) the sale by the Company to Infinity Network, Inc. ("INI"), a
wholly-owned subsidiary of Infinity Broadcasting Corporation
("Infinity"), of 5,000,000 shares of the Company's Common
Stock and a warrant to purchase up to an additional 3,000,000
shares of Common Stock at an exercise price of $3.00 per
share, for a total purchase price of $15,000,000;
(b) a Management Agreement between the Company and Infinity
pursuant to which (a) the Chief Executive Officer of
Infinity, currently Mel Karmazin, became the Chief Executive
Officer of the Company, (b) the Chief Financial Officer of
Infinity, currently Farid Suleman, became the Chief Financial
Officer of the Company and (c) Infinity began managing the
business and operations for an annual base fee of $2,000,000
(adjusted for inflation), an annual cash bonus (payable in
the event of meeting certain financial targets) and
additional warrants to acquire up to 1,500,000 shares of
common stock exercisable after the Company's common stock
reaches certain market prices per share.
(c) a Voting Agreement providing for the reconstitution of the
Board of Directors into a nine-member Board and the voting of
Norman Pattiz's shares of the Company's Common Stock and
Class B Stock and the shares of the Common Stock held by INI.
The Company financed the acquisition ($101,300,000), with a new senior
loan from a syndicate of banks in the amount of $125,000,000.
Radio Programming
The depth of Westwood One's programming has grown through internal
expansion and through acquisition. The Company produces and distributes
24-hour continuous play formats, regularly scheduled and special
syndicated programs, including exclusive live concerts, music and
interview shows, national music countdowns, lifestyle short features,
news broadcasts, talk programs, sporting events, and sports features.
The Company controls most aspects of production of its programs,
therefore being able to tailor its programs to respond to current and
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changing listening preferences. The Company produces regularly
scheduled short-form programs (typically 5 minutes or less), long-form
programs (typically 60 minutes or longer) and 24-hour continuous play
formats. Typically, the short-form programs are produced at the
Company's in-house facilities located in Culver City, California, New
York, New York and Arlington, Virginia. The long-form programs include
shows produced entirely at the Company's in-house production facilities
and recordings of live concert performances and sports events made on
location. The 24-hour continuous play formats are produced at the
Company's facilities in Valencia, California.
Westwood One also produces and distributes special event syndicated
programs. In 1994 the Company produced and distributed numerous special
event programs, including exclusive broadcasts of the Rolling Stones
Voodoo Lounge concert tour, Sting Live, an HBO simulcast of Barbara
Streisand and an MTV simulcast of "The Eagles: Hell Freezes Over."
Westwood One believes these broadcasts have contributed to its
reputation and are an integral part of its business strategy to increase
its share of the national radio network advertising market.
Westwood One obtains most of the programming for its concert series by
recording live concert performances of prominent recording artists. The
agreements with these artists often provide the exclusive right to
broadcast the concerts worldwide over the radio (whether live or pre-
recorded) for a specific period of time. The Company may also obtain
interviews with the recording artist and retain a copy of the recording
of the concert and the interview for use in its radio programs and as
additions to its extensive tape library. The agreements provide the
artist with master recordings of their concerts and nationwide exposure
on affiliated radio stations. In certain cases the artists may receive
compensation.
Westwood One's syndicated programs are produced at its in-house
production facilities. The Company determines the content and style of
a program based on the target audience it wishes to reach. The Company
assigns a producer, writer, narrator or host, interviewer and other
personnel to record and produce the programs. Because Westwood One
controls the production process, it can refine the programs' content to
respond to the needs of its affiliated stations and national
advertisers. In addition, the Company can alter program content in
response to current and anticipated audience demand.
The Company produces and distributes eight 24-hour continuous play
formats providing music, news and talk programming for Country, Hot
Country, Adult Contemporary, Format 41, Oldies, AM only, Adult Rock and
Roll and the 70's formats. Using its production facilities in Valencia,
California, the Company provides all the programming for stations
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affiliated with each of these formats. Affiliates compensate the
Company for these formats by providing the Company with a portion of
their commercial air time and, in most cases, cash fees.
The Company believes that its tape library is a valuable asset and
significantly enhances its future programming and revenue generating
capabilities. The library contains previously broadcast programs, live
concert performances, interviews, daily news programs, sports and
entertainment features, Capitol Hill hearings and other special events.
New programs can be created and developed at a low cost by excerpting
material from the library.
Affiliated Radio Stations
Westwood One's radio network business strategy addresses the programming
needs and financial limitations of radio stations. The Company offers
radio stations a wide selection of regularly scheduled and special event
syndicated programming as well as 24-hour continuous play formats.
These programs and formats are completely produced by the Company and,
therefore, the stations have no production costs. Typically, each
program is offered for broadcast by the Company exclusively to one
station in its geographic market, which assists the station in competing
for audience share in its local marketplace. In addition, except for
news programming, Westwood One's programs contain available commercial
air time that the stations may sell to local advertisers. Westwood One
typically distributes promotional announcements to the stations and
places advertisements in trade and consumer publications to further
promote the upcoming broadcast of its programs.
Westwood One's networks enter into affiliation agreements with radio
stations. In the case of news and current events programming, the
agreements commit the station to broadcast only the advertisements
associated with these programs and allows the station flexibility to
have the news headlined by their newscasters. The other affiliation
agreements require a station to broadcast the Company's programs and to
use a portion of the program's commercial slots to air national
advertisements and any related promotional spots. With respect to the
24-hour formats, the Company, in most cases, also receives a fee from
the affiliated stations for the right to broadcast the formats. Radio
stations in the top 200 national markets may also receive compensation
for airing national advertising associated with the Company's news and
current events programming.
Affiliation agreements specify the number of times and the approximate
time of day each program and advertisement may be broadcast. Westwood
One requires that each station complete and promptly return to the
Company an affidavit (proof-of-performance) that verifies the time of
each broadcast. Affiliation agreements for Westwood One's entertainment
programming are non-cancelable for 26 weeks and are automatically
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renewed for subsequent 26-week periods, if not canceled 30 days prior to
the end of the existing contract term. Affiliation agreements for
Westwood One's news and current events programming generally run for a
period of at least one year, are automatically renewable for subsequent
periods and are cancelable by either the Company or the station upon 90
days' notice.
The Company has a number of people responsible for station relations and
marketing its programs to radio stations. Station relationships are
managed geographically to allow the marketing staff to concentrate on
specific geographical regions. This enables the Company's staff to
develop and maintain close, professional relationships with radio
station personnel and to provide them with quick programming assistance.
National Advertisers
Westwood One provides national advertisers with a cost-effective way to
communicate their commercial messages to large listening audiences
nationwide that have specific demographic characteristics. An
advertiser can obtain both frequency (number of exposures to the target
audience) and reach (size of listening audience) by purchasing
advertising time in the Company`s programs. By purchasing time in
programs directed to different formats, advertisers can be assured of
obtaining high market penetration and visibility as their commercial
messages will be broadcast on several stations in the same market at the
same time. The Company supports its national sponsors with promotional
announcements and advertisements in trade and consumer publications.
This support promotes the upcoming broadcasts of Company programs and is
designed to increase the advertisers' target listening audience.
The Company sells its commercial time to advertisers either as "bulk" or
"flighted" purchases. Bulk purchases are long-term contracts (26 to 52
weeks) that are sold "up-front" (early advertiser commitments for
national broadcast time). Flighted purchases are contracts for a
specific, short-term period of time (one to six weeks) that are sold at
or above prevailing market prices. The Company's strategy for growth in
advertising revenue is to increase the amount of advertising time sold
on the usually more profitable flighted basis, to increase revenue of
the non-RADAR rated programs, and to increase audience size for news,
talk and current events programming.
Competition
The Company operates in a very competitive environment. In marketing
its programs to national advertisers, the Company directly competes with
other radio networks as well as with smaller independent radio
syndication producers and distributors. In addition, Westwood One
competes for advertising revenue with network television, cable
television, print and other forms of communications media. The Company
believes that the high quality of its programming and the strength of
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its station relations and advertising sales forces enable it to compete
effectively with other forms of communication media. Westwood One
markets its programs to radio stations, including affiliates of other
radio networks, that it believes will have the largest and most
desirable listening audience for each of its programs. The Company
often has different programs airing on a number of stations in the same
geographic market at the same time. The Company believes that in
comparison with any other independent radio syndication producer and
distributor or radio network it has a larger and more diversified
selection of programming from which national advertisers and radio
stations may choose. In addition, the Company both produces and
distributes programs, thereby enabling it to respond more effectively to
the demands of advertisers and radio stations.
The increase in the number of program formats has led to increased
competition among local radio stations for audience. As stations
attempt to differentiate themselves in an increasingly competitive
environment, their demand for quality programming available from outside
programming sources increases. This demand has been intensified by high
operating and production costs at local radio stations and increased
competition for local advertising revenue.
Government Regulation
Radio broadcasting and station ownership are regulated by the FCC.
Westwood One, as a producer and distributor of radio programs, is not
subject to regulation by the FCC.
Employees
On February 15, 1995, Westwood One had 414 full-time employees,
including a domestic advertising sales force of 46 people. In addition,
the Company maintains continuing relationships with approximately 50
independent writers, program hosts, technical personnel and producers.
Certain employees at the Mutual Broadcasting System, NBC Radio Networks,
and Unistar Radio Networks are covered by collective bargaining
agreements. The Company believes relations with its employees and
independent contractors are good.
Item 2. Properties
The Company owns a 7,600 square-foot building in Culver City, California
in which its production facilities are located; a 14,000 square-foot
building and an adjacent 10,000 square-foot building in Culver City,
California which contains administrative, sales and marketing offices,
and storage space; and a 7,700 square-foot unoccupied building in Culver
City. In addition, the Company leases offices in New York; Chicago;
Detroit; Dallas; Arlington, Virginia and Valencia, California.
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The Company believes that its facilities are more than adequate for its
current level of operations.
Item 3. Legal Proceedings
- None -
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of the year ended December 31, 1994.
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PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder
Matters
On March 1, 1995 there were approximately 370 holders of record of the
Company's Common Stock, several of which represent "street accounts" of
securities brokers. Based upon the number of proxies requested by brokers
in conjunction with its shareholders' meeting on August 18, 1994, the
Company estimates that the total number of beneficial holders of the
Company's Common Stock exceeds 4,500.
The Company's Common Stock has been traded in the over-the-counter market
under the NASDAQ symbol WONE since the Company's initial public offering on
April 24, 1984. The following table sets forth the range of high and low
last sales prices on the NASDAQ/National Market System, as reported by
NASDAQ, for the Common Stock for the calendar quarters indicated.
<TABLE>
<CAPTION>
1994 High Low
---- ---- ---
<S> <C> <C>
First Quarter 10 1/2 7 5/8
Second Quarter 8 7/8 7 1/8
Third Quarter 11 3/8 7 11/16
Fourth Quarter 11 1/4 7 5/8
1993
----
First Quarter 2 5/8 1 19/32
Second Quarter 3 1/16 2 3/8
Third Quarter 3 1/8 2 3/8
Fourth Quarter 9 1/4 2 9/16
</TABLE>
No cash dividend was paid on the Company's stock during 1994 or 1993, and
the payment of dividends is restricted by the terms of The Loans.
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Item 6. Selected Financial Data
(In thousands except per share data)
The table below summarizes selected consolidated financial data of the
Company for each of the last five fiscal years:
OPERATING RESULTS FOR YEAR ENDED:
<TABLE>
<CAPTION>
November 30,
December 31, ______________________________________
1994 1993 1992 1991 1990
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
NET REVENUES $136,340 $84,014 $86,376 $93,170 $92,389
DEPRECIATION AND AMORTIZATION 18,160 16,384 19,661 22,055 22,856
OPERATING INCOME (LOSS) 5,982 (2,191) (18,700) (5,931) (9,309)
(LOSS) FROM CONTINUING OPERATIONS (2,730) (8,682) (21,397) (10,004) (12,915)
(LOSS) FROM DISCONTINUED OPERATIONS - (15,227) (2,721) (6,778) (5,260)
(LOSS) BEFORE EXTRAORDINARY ITEM (2,730) (23,909) (24,118) (16,782) (18,175)
EXTRAORDINARY GAIN (LOSS) (590) - - 25,618 -
NET INCOME (LOSS) ($3,320) ($23,909) ($24,118) $8,836 ($18,175)
INCOME (LOSS) PER SHARE:
Primary:
Continuing Operations ($ .09) ($ .57) ($ 1.44) ($ .67) ($ .89)
Discontinued Operations - ( 1.01) ( .18) ( .46) ( .36)
-------- -------- --------- -------- --------
(Loss) Before Extraordinary Item ( .09) ( 1.58) ( 1.62) ( 1.13) ( 1.25)
Extraordinary Item ( .02) - - 1.73 -
-------- -------- --------- -------- --------
Net Income (Loss) ($ .11) ($ 1.58) ($ 1.62) $ .60 ($ 1.25)
======== ======== ========= ======== ========
Fully diluted:
Continuing Operations ($ .09) ($ .57) ($ 1.44) ($ .30) ($ .89)
Discontinued Operations - ( 1.01) ( .18) ( .28) ( .36)
-------- -------- --------- -------- --------
(Loss) Before Extraordinary Item ( .09) ( 1.58) ( 1.62) ( .58) ( 1.25)
Extraordinary Item ( .02) - - 1.06 -
-------- -------- --------- -------- --------
Net Income (Loss) ($ .11) ($ 1.58) ($ 1.62) $ .48 ($ 1.25)
======== ======== ========= ======== ========
BALANCE SHEET DATA AT:
November 30,
December 31, ______________________________________
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
CURRENT ASSETS $46,157 $32,987 $51,091 $46,126 $54,312
WORKING CAPITAL 7,685 (1,503) (11,942) 10,200 28,676
TOTAL ASSETS 260,112 152,067 295,740 322,561 343,783
LONG-TERM DEBT 115,443 51,943 146,622 169,083 214,342
TOTAL SHAREHOLDERS' EQUITY 95,454 55,151 75,204 98,765 89,496
</TABLE>
[FN]
- - -------------------------------------
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements to expense the costs as incurred.
The effect of this change in accounting method does not materially affect the
comparability of the information reflected herein.
Results for the year ended December 31, 1994 include Unistar from the time it
was acquired in February 1994.
No cash dividend was paid on the Company's common stock during the periods
presented above.
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Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations
(In thousands except for share and per share amounts)
In August 1994, the Company changed its fiscal year end from November 30 to
December 31 effective with the fiscal year ending December 31, 1994.
Accordingly, in the following discussion "1994" will refer to the calendar
year 1994, "1993" will refer to the fiscal year ended November 30, 1993 and
"1992" will refer to the fiscal year ended November 30, 1992.
On February 3, 1994 the Company completed the acquisition of all of the
issued and outstanding capital stock of the Unistar Radio Networks, Inc.
("Unistar"). The acquisition was accounted for as a purchase, and
accordingly, the operating results of Unistar are included with those of the
Company from the date of acquisition.
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements and income taxes. In order to
conform to predominate current industry practice, capitalized station
affiliation agreements will be expensed as incurred. The cumulative effect
of the change in accounting for station affiliation expenses in December
1993 was an expense of $4,344, or $.23 per share. SFAS No. 109 "Accounting
for Income Taxes" was adopted by the Company in December 1993. The Company
elected not to restate prior year's financial statements. Adopting SFAS No.
109 did not affect the December 1993 or current period results.
In 1993, the Company classified the results of operations from Radio &
Records and its Los Angeles and New York radio stations as discontinued
operations. The Company disposed of these assets during 1993.
RESULTS OF OPERATIONS
Westwood One derives substantially all of its revenue from the sale of
advertising time to advertisers. Net revenues increased 62% to $136,340 in
1994 from $84,014 in 1993 and decreased 3% in 1993 from $86,376 in 1992. The
increase in 1994 net revenues was primarily a result of the purchase of
Unistar in February 1994. The decrease in 1993 net revenues was attributed
to the non-recurrence of the Company's exclusive radio coverage of the 1992
Summer Olympics, partially offset by net revenue growth associated with an
overall increase in the network radio marketplace.
Operating costs and expenses excluding depreciation and amortization
increased 61% to $105,389 in 1994 from $65,353 in 1993 and decreased 15% in
1993 from $77,335 in 1992. The 1994 increase was primarily attributable to
the purchase of Unistar and higher programming expenses resulting from the
production of additional programs. The 1993 decrease was primarily due to
cost reduction programs associated with affiliate compensation, programming,
news and related staff expenses, and the non-recurrence of the 1992 Summer
Olympics.
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Depreciation and amortization increased 11% to $18,160 in 1994 from $16,384
in 1993 and decreased 17% in 1993 from $19,661 in 1992. The increase in
1994 was primarily a result of the purchase of Unistar, partially offset by
lower amortization of production costs and lower amortization as a result of
the Company's December 1, 1993 change in its method of accounting for
capitalized station affiliation agreements. The reduction in 1993 was
primarily due to lower amortization of production costs and lower write-
offs resulting from fewer terminated station affiliation agreements.
Corporate general and administrative expenses decreased 1% to $4,404 in 1994
from $4,468 in 1993 and decreased 26% in 1993 from $6,017 in 1992. The
nominal decrease in 1994 is a result of across-the-board expense cuts,
partially offset by fees attributable to the Infinity Management Agreement.
The decrease in 1993 was attributable to across-the-board expense cuts and
the non-recurrence of a 1992 one-time charge for a vested benefit related
to an executive officer's employment contract.
As a result of the purchase of Unistar, the Company accrued restructuring
costs of $2,405 in the first quarter of 1994 principally relating to the
consolidation of certain facilities and operations. Approximately $2,100
of these costs were paid in 1994, with the balance scheduled to be paid in
1995.
Severance and termination expenses of $2,063 in 1992 were principally due to
management changes implemented to achieve future efficiencies.
Operating income increased $8,173 to $5,982 in 1994 from an operating loss
of $2,191 in 1993 and the 1993 operating loss decreased 88% from $18,700 in
1992. The significant improvement in 1994 is attributable to the acquisition
of Unistar and cost savings resulting from operating synergies from the
Unistar acquisition, partially offset by higher depreciation and
amortization expense as a result of the Unistar acquisition. The 1993
improvement was primarily due to extensive cost reduction programs and the
non-recurrence of prior year severance and termination expenses, partially
offset by the non-recurrence of profit from the 1992 Summer Olympics.
Interest expense was $8,802, $6,551 and $5,562 in 1994, 1993 and 1992,
respectively. The 1994 increase is principally attributable to higher debt
levels as a result of the acquisition of Unistar, partially offset by the
elimination of interest expense on the Company's 9% Senior Debentures due to
their conversion to Common Stock.
Other income is principally comprised of investment income. The other
expense of $301 in 1992 was due principally to a provision to write-down a
parcel of real estate that was held for sale to its net realizable value,
partially offset by investment income.
Equity in net loss of an unconsolidated subsidiary represents the Company's
share of the operating performance of WNEW-AM, which was sold in August
1992.
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Loss on the sale of an unconsolidated subsidiary of $6,536 in 1992 represents
the provision for the sale of WNEW-AM, which closed on December 15, 1992.
Loss from continuing operations decreased 69% to $2,730 ($.09 per share) from
$8,682 ($.57 per share) in 1993 and 59% in 1993 from $21,397 ($1.44 per
share) in 1992.
Loss on discontinued operations, net of income tax benefit, was $3,140 in
1993 and $2,721 in 1992. The 1993 loss represents the operating performance
of discontinued operations through March 1, 1993.
The $12,087 provision for loss on disposal of discontinued operations
included estimated future costs and operating results of the discontinued
assets from March 1, 1993 until the date of disposition.
In connection with the refinancing of its senior debt facility, the Company
recorded an extraordinary loss of $590 ($.02 per share).
The net loss decreased 86% to $3,320 ($.11 per share) in 1994 from $23,909
($1.58 per share) in 1993 and 1% in 1993 from $24,118 ($1.62 per share) in
1992.
Weighted average shares outstanding increased 94% to 29,414 in 1994 from
15,153 in 1993 and 2% in 1993 from 14,906 in 1992. The 1994 increase in
weighted average shares is primarily attributable to the conversion of its 9%
Senior Debentures into approximately 8,864 shares of Common Stock and the
sale of 5,000 shares of Common Stock to a subsidiary of Infinity.
Liquidity and Capital Resources
At December 31, 1994, the Company's cash and cash equivalents were $2,439, a
decrease of $1,429 from November 30, 1993. In addition, the Company had
available borrowings under its Loans of $15,000.
For 1994, net cash from operating activities was $2,445, an increase of
$4,739 from 1993. The increase was primarily attributable to higher cash
flow from operations and an increase in accounts payable due to the Unistar
acquisition, partially offset by an increase in accounts receivable resulting
principally from the Unistar acquisition. Net cash used by investing
activities was $111,731 principally due to the purchase of Unistar.
Consequently, cash used before financing activities was $109,286.
In the first quarter of 1994, the Company entered into a new senior loan
agreement with a syndicate of banks which was comprised of a $15,000
revolving facility and $110,000 in term loans which mature on November 30,
2001. In addition, the Company sold 5,000 shares of Common Stock and a
warrant to purchase up to an additional 3,000 shares of Common Stock at an
exercise price of $3.00 per share (subject to certain vesting conditions) to
a subsidiary of Infinity for $15,000. Proceeds from the loans and Common
14<PAGE>
<PAGE>
Stock sale were used to finance the acquisition of Unistar ($101,300), repay
borrowings outstanding under its previous senior debt agreement ($8,841) and
for working capital. In addition, from December 1993 through March 1994,
holders of approximately $31,058 of the Company's 9% Senior Debentures
converted their debentures to approximately 8,864 shares of Common Stock.
In August 1994, the Company prepaid $5,000 on its term loans which mature on
November 30, 2001. At December 31, 1994, the outstanding balance of the
Company's term loans were $105,000. In January 1995, the Company prepaid an
additional $2,500 on its term loans. As a result, the Company's next
scheduled principal repayment of $2,500 is due in November 1995.
Management believes that the Company's cash, available borrowings and
anticipated cash flow from operations will be sufficient to finance current
and forecasted operations over the next 12 months.
Item 8. Financial Statements and Supplementary Data
The Consolidated Financial Statements and the related notes and schedules of
the Company are indexed on page F-1 of this Report, and attached hereto as
pages F-1 through F-17 and by this reference incorporated herein.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
15 <PAGE>
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
Item 11. Executive Compensation
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after then end of the Company's fiscal year.
Item 13. Certain Relationships and Related Transactions
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
16 <PAGE>
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents filed as part of this Report on Form 10-K
1. Financial statements and schedules to be filed thereunder are indexed
on page F-1 hereof.
2. Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<S> <C>
3.1 Certificate of Incorporation of Registrant. (1)
3.2 Agreement of Merger. (1)
3.3 Certificate of Amendment of Certificate of Incorporation, as filed on October 10, 1986. (2)
3.4 Certificate of Amendment of Certificate of Incorporation, as filed on October 9, 1986. (3)
3.5 Certificate of Amendment of Certificate of Incorporation, as filed on March 23, 1987. (3)
3.6 Certificate of Correction of Certificate of Amendment, as filed on March 31, 1987 at
10:00 a.m. (3)
3.7 Certificate of Correction of Certificate of Amendment, as filed on March 31, 1987 at
10:01 a.m. (3)
3.8 Bylaws of Registrant as currently in effect.
4 Form of Indenture for 6 3/4% Convertible Subordinated Debentures (including the form of
the Debenture). (2)
4.1 Warrant Agreement dated August 27, 1990 between Registrant and Security Pacific
National Bank, as Warrant Agent. (7)
*10.1 Employment Agreement and Registration Rights Agreement, dated October 18, 1993,
between Registrant and Norman J. Pattiz. (13)
*10.2 First Amendment to Employment Agreement, dated January 26, 1994 between Registrant
and Norman J. Pattiz. (13)
*10.3 Second Amendment to Employment Agreement, dated February 2, 1994, between
Registrant and Norman J. Pattiz.
*10.4 Employment Agreement, dated April 19, 1990, between Unistar Communications Group,
Inc., Unistar Radio Networks, Inc. and William J. Hogan.
*10.5 Employment Agreement, dated June 1, 1992, between Registrant and Gregory P.
Batusic. (11)
*10.6 Employment Agreement, dated August 30, 1993, between Registrant and Eric R. Weiss.
(13)
10.7 Form of Indemnification Agreement Between Registrant and its Directors and Executive
Officers. (4)
10.8 Credit Agreement, dated February 1, 1994, between Registrant and The Chase
Manhattan Bank (National Association) and Co-Agents.
10.9 Amendment No. 1 to the Credit Agreement, dated August 12, 1994, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.10 Amendment No. 2 to the Credit Agreement, dated August 31, 1994, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.11 Amendment No. 3 to the Credit Agreement, dated February 23, 1995, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.12 Purchase Agreement dated as of August 24, 1987, between Registrant and National
Broadcasting Company, Inc. (5)
10.13 Stock Purchase Agreement, dated November 4, 1993, between Registrant and Unistar
Communications Group, Inc., Unistar Radio Network, Inc., and Infinity Broadcasting
Corporation. (12)
10.14 Securities Purchase Agreement, dated November 4, 1993, between Registrant and
Infinity Network, Inc. (12)
*10.15 Management Agreement, dated as of February 4, 1994, between Registrant and Infinity
Broadcasting Corporation. (12)
*10.16 Voting Agreement, dated as of February 4, 1994, among Registrant, Infinity Network, Inc.,
Infinity Broadcasting Corporation and Norman J. Pattiz. (12)
10.17 Westwood One, Inc. 1989 Stock Incentive Plan. (10)
10.18 Amendments to the Westwood One, Inc. Amended 1989 Stock Incentive Plan. (14)
10.19 Lease, dated July 19, 1989, between First Ball Associates Limited Partnership and
Westwood One, Inc., relating to Arlington, Virginia offices. (6)
10.20 Lease, dated June 18, 1990, between Broadway 52nd Associates and Unistar
Communications Group, Inc. relating to New York, New York offices.
10.21 Lease, dated December 18, 1991, between Valencia Paragon Associates, Ltd., and
Unistar Communications Group, Inc. relating to Valencia, California offices.
10.22 Digital Audio Transmission Service Agreement, dated June 5, 1990, between Registrant
and GE American Communications, Inc. (8)
10.23 Transmission Service Agreement, dated May 28, 1993, between IDB Communications
Group, Inc. and Unistar Radio Networks, Inc.
10.24 Stipulation of Settlement of Class Action Law Suit. (6)
10.25 Agreement for Cancellation of Loan Documents, Guarantees and Securities Purchase
Documents, dated as of November 19, 1993 between Registrant, Westwood One Stations
Group, Inc., Westwood One Stations-LA, Inc., Radio & Records, Inc. and Westinghouse
Electric Corporation. (13)
22 List of Subsidiaries
24 Consent of Independent Accountants
27 Financial Data Schedule
</TABLE>
[FN]
**********************
* Indicates a management contract or compensatory plan.
(1) Filed as an exhibit to Registrant's registration statement on Form S-1
(File Number 2-98695) and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's registration statement on Form S-1
(Registration Number 33-9006) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Form 8 dated March 1, 1988 (File
Number 0-13020), and incorporated herein by reference.
(4) Filed as part of Registrant's September 25, 1986 proxy statement (File
Number 0-13020) and incorporated herein by reference.
(5) Filed an exhibit to Registrant's current report on Form 8-K dated
September 4, 1987 (File Number 0-13020) and incorporated herein by
reference.
(6) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1989 (File Number 0-13020) and incorporated
herein by reference.
(7) Filed as an exhibit to Registrant's Quarterly report on Form 10-Q for the
quarter ended August 31, 1990 (File Number 0-13020) and incorporated herein
by reference.
(8) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1990 (File Number 0-13020) and incorporated
herein by reference.
(9) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1991 (File Number 0-13020) and incorporated
herein by reference.
(10)Filed as part of Registrant's March 27, 1992 proxy statement (File Number
0-13020) and incorporated herein by reference.
(11)Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1992 (File Number 0-13020) and incorporated
herein by reference.
(12)Filed as part of Registrant's January 7, 1994 proxy statement (File Number
0-13020) and incorporated herein by reference.
(13)Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1993 (File Number 0-13020) and incorporated
herein by reference.
(14)Filed as an exhibit to Registrant's July 20, 1994 proxy statement (File
Number 0-13020) and incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of fiscal
1994.
17<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section13 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.
WESTWOOD ONE, INC.
March 31, 1995 By FARID SULEMAN
_______________________
Farid Suleman
Director, Secretary and
Chief Financial Officer
Pursuant to the requirements of the Security 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>
Principal Executive Officer:
MEL A. KARMAZIN
_______________ Director, President and March 31, 1995
Mel A. Karmazin Chief Executive Officer
Principal Financial Officer and
Chief Accounting Officer:
FARID SULEMAN
_______________ Director, Secretary and March 31, 1995
Farid Suleman Chief Financial Officer
Additional Directors:
NORMAN J. PATTIZ
___________________ Chairman of the Board of March 31, 1995
Norman J. Pattiz Directors
DAVID L. DENNIS
_________________ Director March 31, 1995
David L. Dennis
GERALD GREENBERG
_________________ Director March 31, 1995
Gerald Greenberg
PAUL G. KRASNOW
________________ Director March 31, 1995
Paul G. Krasnow
ARTHUR E. LEVINE
________________
Director March 31, 1995
Arthur E. Levine
JOSEPH B. SMITH
________________ Director March 31, 1995
Joseph B. Smith
</TABLE>
18<PAGE>
<PAGE>
WESTWOOD ONE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
Page
____
<S> <C>
1. Consolidated Financial Statements
--Report of Independent Accountants F-2
--Consolidated Balance Sheets at December 31, 1994
and November 30, 1993 F-3
--Consolidated Statements of Operations for the years
ended December 31, 1994, November 30, 1993 and
1992 and the month ended December 31, 1993 F-4
--Consolidated Statements of Shareholders'
Equity for the years ended December 31, 1994,
November 30, 1993 and 1992 and the month ended
December 31, 1993 F-5
--Consolidated Statements of Cash Flows for the
years ended December 31, 1994, November 30, 1993
and 1992 and the month ended December 31, 1993 F-6
--Notes to Consolidated Financial Statements F-7 - F16
2. Financial Statement Schedules:
IX. --Short-term Borrowings F-17
</TABLE>
All other schedules have been omitted because they are not
applicable, the required information is immaterial, or the required
information is included in the consolidated financial statements or notes
thereto.
F-1<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Westwood One, Inc.
In our opinion, the consolidated financial statements listed in the index to
consolidated financial statements and financial statement schedules on page
F-1 present fairly, in all material respects, the financial position of
Westwood One, Inc. and its subsidiaries at December 31, 1994, November 30,
1993 and 1992, and the results of their operations and their cash flows for
the year ended December 31, 1994, the one month ended December 31, 1993 and
for each of the two fiscal years in the period ended November 30, 1993, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in the Notes to Consolidated Financial Statements, effective
December 1, 1993 the Company changed its accounting policy for capitalized
station affiliation agreements and adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes".
PRICE WATERHOUSE LLP
Century City, California
February 24, 1995
F-2<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
December 31, November 30,
1994 1993
-------- ------
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,439 $ 3,868
Accounts receivable, net of allowance for doubtful
accounts of $1,645 (1994) and $959 (1993) 37,631 19,480
Programming costs and rights 3,129 6,849
Other current assets 2,958 2,790
-------- -------
Total Current Assets 46,157 32,987
PROPERTY AND EQUIPMENT, NET 16,748 15,984
INTANGIBLE ASSETS, NET 191,287 90,745
OTHER ASSETS 5,920 12,351
-------- -------
TOTAL ASSETS $260,112 $152,067
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 15,325 $ 11,570
Accrued expenses and other liabilities 12,947 12,838
Amounts payable to affiliates 5,200 1,876
Current maturities of long-term debt 5,000 1,558
Short-term borrowings - 6,648
-------- --------
Total Current Liabilities 38,472 34,490
LONG-TERM DEBT 115,443 51,943
OTHER LIABILITIES 10,743 10,483
-------- --------
TOTAL LIABILITIES 164,658 96,916
-------- --------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Preferred stock: authorized 10,000,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 117,000,000 shares;
issued and outstanding, 30,652,652 (1994) and 15,978,758 (1993) 307 160
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 351,733 (1994 and 1993) 4 4
Additional paid-in capital 159,727 110,547
Accumulated deficit (64,584) (55,560)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 95,454 55,151
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $260,112 $152,067
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-3<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
Year Ended Month Ended November 30,
December 31, December 31, ------------------
1994 1993 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
GROSS REVENUES $158,780 $ 6,887 $98,357 $101,290
Less Agency Commissions 22,440 970 14,343 14,914
-------- -------- ------- --------
NET REVENUES 136,340 5,917 84,014 86,376
-------- -------- ------- --------
Operating Costs and Expenses Excluding
Depreciation and Amortization 105,389 5,411 65,353 77,335
Depreciation and Amortization 18,160 1,243 16,384 19,661
Corporate General and Administrative Expenses 4,404 245 4,468 6,017
Restructuring Costs 2,405 - - -
Severance and Termination Expenses - - - 2,063
-------- -------- -------- --------
130,358 6,899 86,205 105,076
-------- -------- -------- --------
OPERATING INCOME (LOSS) 5,982 (982) (2,191) (18,700)
Interest Expense 8,802 381 6,551 5,562
Other (Income) Expense (290) (3) (60) 301
Equity in Net Loss of Unconsolidated Subsidiary - - - 789
Loss on Sale of Unconsolidated Subsidiary - - - 6,536
-------- --------- -------- --------
(LOSS) BEFORE INCOME TAXES, DISCONTINUED
OPERATIONS, EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (2,530) (1,360) (8,682) (31,888)
INCOME TAXES 200 - - (10,491)
-------- -------- -------- --------
(LOSS) FROM CONTINUING OPERATIONS (2,730) (1,360) (8,682) (21,397)
(LOSS) ON DISCONTINUED OPERATIONS, NET
OF INCOME TAX BENEFIT - - (3,140) (2,721)
PROVISION FOR (LOSS) ON DISPOSAL OF
DISCONTINUED OPERATIONS - - (12,087) -
-------- -------- -------- --------
(LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (2,730) (1,360) (23,909) (24,118)
EXTRAORDINARY ITEM - (LOSS) ON RETIREMENT OF DEBT (590) - - -
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - (4,344) - -
-------- --------- -------- ---------
NET (LOSS) ($3,320) ($ 5,704) ($23,909) ($24,118)
======== ========= ========= =========
(LOSS) PER SHARE:
Continuing Operations ($ .09) ($ .07) ($ .57) ($ 1.44)
Discontinued Operations - - ( 1.01) ( .18)
-------- --------- --------- ---------
(Loss) Before Extraordinary Item and Cumulative
Effect of Accounting Change ( .09) ( .07) ( 1.58) ( 1.62)
Extraordinary Item ( .02) - - -
-------- --------- --------- ---------
( .11) ( .07) ( 1.58) ( 1.62)
Cumulative Effect of Accounting Change - ( .23) - -
-------- --------- --------- ---------
Net (Loss) ($ .11) ($ .30) ($ 1.58) ($ 1.62)
======== ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING 29,414 19,051 15,153 14,906
======== ========= ========= =========
Pro Forma Amounts Assuming the New Accounting
Method is Applied Retroactively:
(Loss) Before Extraordinary Item ($2,730) ($ 1,360) ($23,142) ($23,280)
Net (Loss) ( 3,320) ( 1,360) ( 23,142) ( 23,280)
(Loss) Per Share:
(Loss) Before Extraordinary Item ($ .09) ($ .07) ($ 1.53) ($ 1.56)
Net (Loss) ( .11) ( .07) ( 1.53) ( 1.56)
</TABLE>
See accompanying notes to consolidated financial statements.
F-4<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
Common Stock Class B Stock Additional Treasury Stock
------------ ------------- Paid-in Accumulated --------------
Shares Amount Shares Amount Capital (Deficit) Shares Amount
------ ------ ------ ------- ------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT NOVEMBER 30, 1991 ............... 14,594 $146 352 $4 $106,854 ($7,533) 53 $706
Net loss for fiscal 1992 ................... - - - - - (24,118) - -
Amortization of deferred compensation....... - - - - 281 - - -
Issuance of treasury stock to 401-K plan.... - - - - (591) - (53) (706)
Issuance of common stock under
stock option plans......................... 2 - - - 5 - - -
Conversion of Senior Debentures to
common stock............................... 25 - - - 88 - - -
Common stock issued as compensation
to an officer.............................. 42 1 - - 67 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT NOVEMBER 30, 1992 ............... 14,663 147 352 4 106,704 (31,651) - -
Net loss for fiscal 1993.................... - - - - - (23,909) - -
Amortization of deferred compensation....... - - - - 281 - - -
Issuance of common stock under
stock option plans......................... 680 7 - - 1,381 - - -
Conversion of Senior Debentures to
common stock .............................. 591 6 - - 2,062 - - -
Issuance of common stock to 401-K plan...... 46 - - - 119 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT NOVEMBER 30, 1993 ............... 15,980 160 352 4 110,547 (55,560) - -
Net loss for December 1993.................. - - - - - (5,704) - -
Issuance of common stock under
stock option plans......................... 179 2 - - 366 - - -
Conversion of Senior Debentures to
common stock .............................. 3,542 35 - - 12,530 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT DECEMBER 31, 1993 ............... 19,701 197 352 4 123,443 (61,264) - -
Net loss for 1994 .......................... - - - - - (3,320) - -
Issuance of common stock and
warrants................................... 5,000 50 - - 15,933 - - -
Issuance of common stock under
stock option plans......................... 629 7 - - 1,169 - - -
Conversion of Senior Debentures to
common stock .............................. 5,322 53 - - 19,170 - - -
Issuance of common stock to 401-K plan...... 1 - - - 12 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT DECEMBER 31, 1994 ............... 30,653 $307 352 $4 $159,727 ($64,584) - -
======= ===== ===== ===== ======= ======= ==== =====
</TABLE>
See accompanying notes to consolidated financial statements.
F-5<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Year Ended
Year Ended Month Ended November 30,
December 31, December 31, --------------
1994 1993 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($3,320) ($5,704) ($23,909) ($24,118)
Adjustments to reconcile net loss to net cash provided by operating
activities before cash payments related to extraordinary item:
Depreciation and amortization:
Programming costs and rights 8,072 752 9,721 12,536
Intangible assets 6,667 253 4,079 6,489
Property and equipment 3,238 238 2,111 3,198
Capitalized station affiliation agreements - - 1,461 1,383
Other 183 - - -
Extraordinary item - loss on retirement of debt 590 - - -
Cummulative effect of accounting change - 4,344 - -
Loss on disposal of discontinued operations - - 12,087 -
Equity in loss of unconsolidated subsidiary - - - 789
Loss on sale of unconsolidated subsidary - - - 6,536
Deferred income taxes - - - (11,622)
Write-down and provision for loss on assets - - - 1,000
Other, including capitalized programming costs and rights (677) 11 (3,625) (4,719)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (19,191) 1,088 (2,239) 6,965
Decrease (increase) in prepaid assets (377) (197) 209 1,124
Increase (decrease) in accounts payable, accrued liabilities
and amounts payable to affiliates 7,510 (95) (2,189) 4,041
-------- ------- -------- ------
Net cash provided by (used for) operating activities before cash
payments related to extraordinary item 2,695 690 (2,294) 3,602
Cash payments related to extraordinary item (250) - - -
-------- ------- -------- ------
Net Cash Provided By (Used For) Operating Activities 2,445 690 (2,294) 3,602
-------- ------- -------- ------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of companies (Unistar in 1994) (108,181) (72) (1,217) (1,878)
Capital expenditures (1,487) (296) (2,270) (1,192)
Proceeds (cash payments) related to sales of discontinued operations (576) (229) 88,062 -
Proceeds (cash payments) related to sale of unconsolidated subsidary - - 10,372 (1,680)
Capitalized station affiliation agreements - - (694) (545)
Proceeds related to sale of property and equipment - - 853 -
Other (principally deferred financing costs in 1994) (1,487) (82) (268) (397)
-------- ------- -------- -------
Net Cash Provided By (Used For) Investing Activities (111,731) (679) 94,838 (5,692)
-------- ------- -------- -------
CASH PROVIDED (USED) BEFORE
FINANCING ACTIVITIES (109,286) 11 92,544 (2,090)
-------- ------- -------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Debt repayments (14,515) (4,133) (104,071) (2,306)
Borrowings under debt arrangements 110,000 - 7,000 9,288
Issuance of common stock 16,126 368 1,507 -
Issuance of subordinated debentures - - 433 853
-------- ------- -------- -------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 111,611 (3,765) (95,131) 7,835
-------- ------- -------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,325 (3,754) (2,587) 5,745
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 114 3,868 6,455 710
-------- ------- --------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,439 $114 $3,868 $6,455
======== ======= ========= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-6<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
NOTE 1 - Summary of Significant Accounting Policies:
Principles of Consolidation
The consolidated financial statements include the accounts of all wholly-owned
subsidiaries.
Revenue Recognition
Revenue is recognized when commercial advertisements are broadcast.
Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity
of less than three months to be cash equivalents. The carrying amount of cash
equivalents approximates fair value because of the short maturity of these
instruments.
Depreciation
Depreciation is computed using the straight line method over the estimated
useful lives of the assets.
Programming Costs and Rights
The Company defers a portion of its costs for recorded library material and
produced radio entertainment programs with a life of longer than a year.
Recorded library material includes previously broadcast programs, live
concert performances, interviews, news and special events. Programming costs
and rights ("Production costs") are amortized using the straight line method
over the period of expected benefit, not to exceed five years. The current
portion of deferred production costs represents the portion to be amortized
over the next twelve months.
Measurement of Intangible Asset Impairment
The Company periodically evaluates the carrying value of Intangible Assets.
The Company considers the ability to generate positive broadcast cash flow
(based on the consolidated statement of operations, calculated by subtracting
from net revenue, operating costs and expenses excluding depreciation and
amortization) as the key factor in determining whether the assets have been
impaired. To date, the Company has not experienced an impairment in any of
its intangible assets.
Income Taxes
Effective December 1, 1993, the Company implemented Statement of Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes" which
requires the use of the asset and liability method of financial accounting
and reporting for income taxes. Under FAS 109, deferred income taxes reflect
the tax impact of temporary differences between the amount of assets and
liabilities recognized for financial reporting purposes and the amounts
recognized for tax purposes.
Earnings (Loss) per Share
Net income (loss) per share is based on the weighted average number of common
shares and common equivalent shares (where inclusion of such equivalent shares
would not be anti-dilutive) outstanding during the year.
F-7<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Reclassification
Financial statements for all prior periods have been reclassified to conform
to the 1994 presentation.
NOTE 2 - Accounting Change:
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements to expense these costs as incurred.
The Company believes this method is preferable and conforms to the
predominant current industry practice, including Unistar. Accordingly, the
Company recognized the cumulative effect of the change as of December 1, 1993.
The non-cash charge to earnings was an expense of $4,344, or $.23 per share
and has been reflected in the financial statements for the month of December
1993.
NOTE 3 - Change in Fiscal Year:
In the third quarter of 1994, the Company changed its fiscal year end from
November 30 to December 31 effective with the fiscal year ending December 31,
1994. The accompanying financial statements include audited statements of
operations, shareholders' equity and cash flows for the one month transition
period ended December 31, 1993.
NOTE 4 - Acquisition of Unistar Radio Networks, Inc.:
On February 3, 1994, the Company completed the acquisition of all of the
issued and outstanding capital stock of Unistar Radio Networks, Inc.
("Unistar"). The acquisition was accounted for as a purchase. Accordingly,
the operating results of Unistar are included with those of the Company from
the date of acquisition. Based on management's estimates, the purchase price
has been allocated to the fair value of assets and liabilities acquired. The
excess of cost over net assets of acquired company resulting from the
transaction is being amortized over 40 years.
The pro forma unaudited combined condensed results of operations of the
Company and Unistar for the years ended December 31, 1994 and November 30,
1993 (presented as though the combination had occurred on December 1, 1992
after giving effect to certain pro forma adjustments) are as follows:
<TABLE>
<CAPTION>
December 31, November 30,
1994 1993
---- ----
<S> <C> <C>
Net Revenues $140,403 $141,687
(Loss) from Continuing Operations ( 809) (4,301)
(Loss) Per Share from Continuing Operations ( $.03) ( $.15)
</TABLE>
The foregoing pro forma results of operations principally reflect adjusting
historical interest expense, depreciation and amortization, the sale of 5,000
newly issued shares of common stock to a subsidiary of Infinity and
restructuring costs based on the transaction being completed at the beginning
of the periods presented. No adjustments were made to historical results for
potential cost reductions due to the elimination of duplicate facilities and
costs resulting from the acquisition of Unistar. However, 1994 pro forma
results reflect the benefit of cost reductions to the extent that they have
been realized.
F-8<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 5 - Property and Equipment:
Property and equipment is recorded at cost and is summarized as follows at:
<TABLE>
<CAPTION>
December 31, November 30,
1994 1993
---- ----
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,378 $ 3,378
Recording and studio equipment . . . . . . . . . . . . 15,813 15,433
Buildings and leasehold improvements . . . . . . . . . 7,573 6,577
Furniture and equipment . . . . . . . . . . . . . . . 5,664 4,007
Transportation equipment . . . . . . . . . . . . . . . 690 721
Construction-in-progress . . . . . . . . . . . . . . . - 180
------- -------
33,118 30,296
Less: Accumulated depreciation and amortization . . . 16,370 14,312
------- -------
Property and equipment, net . . . . . . . . . $16,748 $15,984
======= =======
</TABLE>
NOTE 6 - Intangible Assets:
Intangible assets are summarized as follows at:
<TABLE>
<CAPTION>
December 31, November 30,
1994 1993
<S> ---- ----
Goodwill, less accumulated amortization of $16,334 <C> <C>
(1994) and $12,127 (1993) . . . . . . . . . . . . . $153,205 $64,947
Acquired station affiliation agreements, less
accumulated amortization of $3,382 (1994)
and $1,851 (1993) . . . . . . . . . . . . . . . . . 21,025 8,156
Other intangible assets, less accumulated
amortization of $4,543 (1994) and $3,958
(1993) . . . . . . . . . . . . . . . . . . . . . . . 17,057 17,642
-------- -------
Intangible assets, net . . . . . . . . . . . . $191,287 $90,745
========= =======
</TABLE>
Goodwill represents the excess of the cost of purchased businesses over the
fair value of their net assets at the date of acquisition.
Station affiliation agreements are comprised of values assigned to agreements
acquired as part of the purchase of radio networks and are amortized using an
accelerated method over 40 years. Intangible assets, except for acquired
station affiliation agreements, are amortized on a straight-line basis over
40 years.
F-9<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 7 - Debt:
Long-term debt consists of the following at:
<TABLE>
<CAPTION>
December 31, November 30,
1994 1993
---- ----
<S> <C> <C>
Term Loans . . . . . . . . . . . . . . . . . . . . . . . $105,000 -
6 % Convertible Subordinated Debentures maturing 2011 . . 15,443 $15,443
Term Notes . . . . . . . . . . . . . . . . . . . . . . . - 7,000
9% Convertible Senior Subordinated Debentures maturing
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . - 31,058
------- -------
120,443 53,501
Less current maturities . . . . . . . . . . . . . . . . . 5,000 1,558
------- -------
$115,443 $51,943
======== =======
</TABLE>
The Company's senior loan agreement with a syndicate of banks provides for
$110,000 in term loans ("Term Loans") and a $15,000 revolving facility
("Revolver") which mature on November 30, 2001 (referred to collectively as
"The Loans"). Interest is payable at the prime rate plus an applicable
margin of up to 1.5% or LIBOR plus an applicable margin of up to 2.5%, at
the Company's option. Based on the Company's Total Debt Ratio, the applicable
margins may be reduced to as low as .5% for prime rate loans and 1.5% for
LIBOR loans. At December 31, 1994, the applicable margins were 1.0% and 2.0%,
respectively. Principal on the Term Loans is payable quarterly starting
February 28, 1995, however in 1994, the Company prepaid the quarterly
installments due on February 28, 1995 and May 31, 1995 resulting in a
December 31, 1994 balance of $105,000. The Loans are secured by substantially
all the Company's assets and contain covenants relating to dividends, liens,
indebtedness, capital expenditures and interest coverage and leverage ratios.
As a matter of policy, the Company does not engage in derivative trading,
however as part of The Loans, the Company is required to enter into interest
rate protection agreements. Accordingly, the Company has entered into two
interest rate protection agreements under which the Company's interest rate
on $50,000 of borrowings under The Loans will not exceed 8% (based on the
current margin). The agreements are effective from July and August 1995 thru
July and August 1996, with each covering $25,000 of borrowings. At
December 31, 1994, the Company did not have any borrowings outstanding under
the Revolver.
The 6 3/4% Convertible Subordinated Debentures ("Debentures") are unsecured
and subordinated in right of payment to senior indebtedness. Interest on the
Debentures is payable semiannually on April 15 and October 15. The Debentures
are convertible at any time prior to maturity, unless previously redeemed,
into shares of common stock of the Company at the conversion price of $24.58
per share, subject to adjustment upon the occurrence of certain events.
F-10<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During 1994, the Company repaid the Term Notes which were outstanding at the
beginning of the year ($7,000). In addition, the 9% Convertible Senior
Subordinated Debentures, which were outstanding on November 30, 1993, were
converted into approximately 8,864,000 shares of common stock.
The aggregate maturities of long-term debt for the next five fiscal years and
thereafter, pursuant to the Company's debt agreements as in effect at
December 31, 1994, are as follows:
<TABLE>
Year
----
<S> <C>
1995 . . . . . . . . $ 5,000
1996 . . . . . . . . 15,000
1997 . . . . . . . . 15,000
1998 . . . . . . . . 20,000
1999 . . . . . . . . 20,000
Thereafter . . . . . 45,443
--------
$120,443
========
</TABLE>
With the exception of the Company's Debentures, the fair value of short and
long-term debt approximates its carrying value. The fair value of the
Debentures at December 31, 1994 was approximately $10,350, based on its quoted
market price.
NOTE 8 - Shareholders' Equity:
The authorized capital stock of the Company consists of Common stock, Class B
stock and Preferred stock. Common stock is entitled to one vote per share
while Class B stock is entitled to 50 votes per share.
In connection with the Company's purchase of Unistar, the Company sold 5
million shares of common stock and a warrant to purchase up to an additional
3 million shares of common stock at an exercise price of $3.00 per share
(subject to certain vesting conditions) to a wholly-owned subsidiary of
Infinity Broadcasting Corporation for $15,000.
In December 1992, the Company's Board of Directors authorized the issuance of
41,500 shares of common stock to an officer of the Company for services
performed in fiscal 1992.
As part of a settlement relating to class action lawsuits filed against the
Company, it issued warrants to purchase 3,000,000 shares of the Company's
common stock at $17.25 per share. The warrants expire on September 4, 1997.
Warrants not exercised may be redeemable under certain circumstances at $1.00
per warrant.
F-11<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9 - Stock Options:
The Company has stock option plans established in 1989 which provide for the
granting of options to directors, officers and key employees to purchase stock
at its market value on the date the options are granted. There are 4,800,000
shares authorized under the 1989 Plan, as amended. Options granted generally
become exercisable after one year in 25% increments per year and expire within
ten years from the date of grant. The 1989 Plan will remain in existence for
10 years or until otherwise terminated by the Board of Directors.
Information concerning options outstanding under the Plans is as follows for
the year ended:
<TABLE>
December 31, November 30,
1994 1993
---- ----
<S> <C> <C>
Shares authorized under option plans at end
of period . . . . . . . . . . . . . . . . . 4,800,000 2,800,000
Exercisable at end of period . . . . . . . . 608,750 734,750
-at exercise prices per share . . . . . . . $1.63-$5.38 $1.63-$9.13
Exercised during the period . . . . . . . . . 629,000 679,500
-at exercise prices per share . . . . . . . $1.63-$3.00 $2.00-$2.75
Granted during the period . . . . . . . . . . 630,000 745,000
-at exercise prices per share . . . . . . . $7.50-$9.75 $1.63-$5.38
Canceled during the period . . . . . . . . . 91,875 141,250
Expired during the period . . . . . . . . . . 50,000 171,000
Available for new stock options at end of
period . . . . . . . . . . . . . . . . . . . 1,632,125 170,250
</TABLE>
As part of a Management Agreement between the Company and Infinity Broadcasting
Corporation ("Infinity"), a subsidiary of Infinity was given warrants to acquire
up to 1,500,000 shares of common stock at prices ranging between $3.00 and $5.00
per share, subject to adjustment, which are exercisable after the Company's
common stock reaches certain market prices per share. At December 31, 1994,
500,000 warrants were exercisable at $3.00 per share.
F-12<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On December 1, 1986, the Chairman of the Board was granted options not covered
by the Plans to acquire 525,000 shares of common stock, which vested ratably
over a seven-year term or immediately upon a change in control of the Company.
The options became exercisable at the fair market value of the common stock,
as defined, on the date of vesting. At December 31, 1994, all the options
granted are exercisable at exercise prices ranging from $1.67 to $16.31 per
share.
NOTE 10 - Income Taxes:
Effective December 1, 1993, the Company changed its method of accounting for
income taxes as required by FAS109. As permitted under the new rules, prior
year financial statements have not been restated, and adoption of FAS109 did
not affect reported earnings.
The Company has approximately $90,000 of available U.S. net operating loss
carryforwards for tax purposes. Utilization of the carryforwards is dependent
upon future taxable income and they begin to expire in 2002. As a result of
the Company's prior and pending debt and equity transactions, some of the
Federal net operating losses may be subject to certain limitations. For
financial purposes, a valuation allowance of $27,781 has been recorded to
offset the deferred tax assets related to those carryforwards.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities on the Company's
balance sheet and the amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities at December 31,
1994 follow:
<TABLE>
<S> <C>
Deferred tax liabilities:
Affiliation agreements . . . . . . $ 9,143
Programming costs and rights . . . 2,186
Depreciation . . . . . . . . . . . 1,189
Other . . . . . . . . . . . . . . 351
------
Total deferred tax liabilities . 12,869
Deferred tax assets:
Net operating loss . . . . . . . . 32,650
Accrued liabilities and reserves . 6,953
Tax credits (AMT and ITC) . . . . 1,047
------
Total deferred tax assets . . . . 40,650
------
Valuation allowance . . . . . . . . 27,781
------
Total deferred income taxes $ -
=======
</TABLE>
F-13<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the provision (benefit) for income taxes related to
continuing operations is summarized as follows:
<TABLE>
<CAPTION>
Year Ended
---------------------------------
December 31, November 30,
Current payable: 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Federal . . . . . . . . . . . . . $ 70 $ - $ -
State . . . . . . . . . . . . . . 130 - 26
-------- ------ --------
200 - 26
-------- ------ --------
Deferred:
Federal . . . . . . . . . . . . . - - (9,520)
State . . . . . . . . . . . . . . - - (2,102)
-------- ------ --------
- - (11,622)
-------- ------ --------
Total expense (benefit) for income
taxes . . . . . . . . . . . . . 200 - (11,596)
Less amount allocated to discontinued
operations . . . . . . . . . . - - 1,105
-------- ------ --------
Expense (benefit) allocated to
continuing operations . . . . . $ 200 $ - $(10,491)
======== ======= ========
</TABLE>
The deferred tax benefits recorded for the year ended November 30, 1992, are
attributable to the reversal of deferred taxes for timing differences, provided
for in earlier years.
Note 11 - Related Party Transactions:
In connection with the acquisition of Unistar, the Company sold 5,000,000
shares of the Company's common stock and a warrant to purchase up to an
additional 3,000,000 shares to a subsidiary of Infinity (See Note 8) and
entered into a Management Agreement with Infinity. Pursuant to the Management
Agreement, the Company paid or accrued expenses aggregating $1,849 to Infinity
in 1994.
In addition, several of Infinity's radio stations are affiliated with the
Company's radio networks and the Company purchases several programs from
Infinity. During 1994 the Company incurred expenses aggregating approximately
$12,159 for Infinity affiliations and programs.
NOTE 12 - Restructuring Costs:
As a result of the Company's February 1994 acquisition of Unistar, the Company
consolidated certain facilities and operations. Accordingly, the Company
recorded an expense of approximately $2,405 for the estimated restructuring
charges, including the costs of facility consolidations, eliminating programs,
employee separations, relocations and related costs.
F-14<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 - Commitments and Contingencies:
The Company has various non-cancelable, long-term operating leases for office
space and equipment. In addition, the Company is committed under various
contractual agreements to pay for talent, broadcast rights, research, certain
digital audio transmission services and the Management Agreement with Infinity.
The approximate aggregate future minimum obligations under such operating
leases and contractual agreements for the five years after December 31, 1994,
are set forth below:
<TABLE>
Year
----
<S> <C>
1995 . . . . . . . . . . . . . $21,389
1996 . . . . . . . . . . . . . 20,292
1997 . . . . . . . . . . . . . 14,725
1998 . . . . . . . . . . . . . 12,235
1999 . . . . . . . . . . . . . 10,258
------
$78,899
======
</TABLE>
NOTE 14 - Supplemental Cash Flow Information:
Supplemental Information on cash flows, including amounts from discontinued
operations, and non-cash transactions is summarized as follows:
<TABLE>
<CAPTION>
Year Ended
-----------------------------------
November 30,
December 31, -----------------------
1994 1993 1992
---- ---- ----
<S> <C> <C>
Cash paid (received) for:
Interest . . . . . . . . . . . . . $ 7,763 $16,580 $17,083
Income taxes . . . . . . . . . . . 125 31 (176)
Non-cash investing and financing activities:
Conversion of Senior Debentures
to common stock . . . . . . . . 19,223 2,068 89
Disposition of discontinued operations:
Debt exchanged . . . . . . . . - 19,724 -
Accrued interest exchanged . . - 198 -
Accounts receivable exchanged - (448) -
</TABLE>
For the one month ended December 31, 1993, $12,565 of Senior Debentures were
converted to common stock.
F-15<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 15 - Discontinued Operations:
At the end of the Company's first fiscal quarter of 1993, the Company
classified the results of operations from Radio & Records and its Los Angeles
(KQLZ-FM) and New York (WYNY-FM) radio stations as discontinued operations.
These three businesses collateralized the Company's 16% Debentures and
Revolving Credit Facility with Westinghouse Electric Corporation ("WEC"). In
June 1993 the Company completed the sales of its Los Angeles and New York
radio stations, and used the net proceeds from the sales to retire the
Company's 16% Debentures and reduce the outstanding balance of its Revolving
Credit Facility. On November 1, 1993, WEC acquired the outstanding stock of
Radio & Records and the net assets of Westwood One Stations Group for the
outstanding balance of the Revolving Credit Facility, accrued interest and
any other potential claims. Accordingly, the historical net loss of the
Company's owned-and-operated radio stations and Radio & Records have been
reported separately from continuing operations, and the prior periods have
been restated (including an allocation of interest of $7,043 and $12,273 for
fiscal 1993 and 1992 respectively).
The Company made a provision for the loss on the disposition of these assets
including estimated future costs and operating results from March 1, 1993
until the date of disposition, of $12,087. Revenue from discontinued
operations for fiscal 1993 and 1992 were $22,282 and $36,443, respectively.
NOTE 16 - Quarterly Results of Operations (unaudited):
The following is a tabulation of the unaudited quarterly results of operations.
The quarterly results are presented for the years ended December 31, 1994 and
November 30, 1993.
<TABLE>
<CAPTION>
(In thousands, except per share data)
First Second Third Fourth For the
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
1994
----
<S> <C> <C> <C> <C>
Net revenues . . . . . . . . . . . . . . . . . . . . $26,052 $36,151 $36,491 $37,646 $136,340
Operating income (loss) . . . . . . . . . . . . . . . (5,622) 4,341 4,010 3,253 5,982
Income (loss) before extraordinary item . . . . . . . (7,416) 2,183 1,658 845 (2,730)
Net income (loss) . . . . . . . . . . . . . . . . . . (8,006) 2,183 1,658 845 (3,320)
Income (loss) per share:
Before extraordinary item . . . . . . . . . . . . . (.29) 0.07 0.05 0.02 (0.09)
Net income (loss) . . . . . . . . . . . . . . . . $ (.32) $ 0.07 $ 0.05 $ 0.02 $ (0.11)
1993
----
Net revenues . . . . . . . . . . . . . . . . . . . . $17,137 $21,207 $21,732 $23,938 $84,014
Operating income (loss) . . . . . . . . . . . . . . . (4,291) 319 973 808 (2,191)
(Loss) from continuing operations . . . . . . . . . . (6,072) (1,303) (580) (727) (8,682)
Net (loss) . . . . . . . . . . . . . . . . . . . . . (9,212) (1,303) (9,080) (4,314) (23,909)
(Loss) per share:
From continuing operations . . . . . . . . . . . . (0.40) (0.09) (0.04) (0.04) (0.57)
Net (loss) . . . . . . . . . . . . . . . . . . . . $ (0.61) $ (0.09) $ (0.60) $ (0.28) $ (1.58)
</TABLE>
The following is a tabulation of the unaudited quarterly results of operations
for each of the quarters for the fiscal year ended December 31, 1993. As a
result of restating the quarterly periods, the effect of accounting change is
presented as if the change was made as of the beginning of the year.
<TABLE>
<CAPTION>
First Second Third Fourth For the
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- --------
<S> <C> <C> <C> <C>
Net revenues . . . . . . . . . . . . . . . . . . . . $18,086 $22,023 $22,611 $22,183 $84,903
Operating income (loss) . . . . . . . . . . . . . . . (3,068) 1,378 1,040 62 (588)
(Loss) from continuing operations . . . . . . . . . . (4,885) (227) (494) (1,348) (6,954)
(Loss) before cumulative effect of accounting change (7,117) (227) (8,994) (4,935) (21,273)
Income (loss) per share:
From continuing operations . . . . . . . . . . . . (0.33) (0.02) (0.03) (0.08) (0.45)
Before cumulative effect of accounting change . . . $ (0.47) $ (0.02) $ (0.60) $ (0.29) $ (1.37)
</TABLE>
F-16<PAGE>
WESTWOOD ONE, INC.
SCHEDULE IX
CONSOLIDATED SHORT-TERM BORROWINGS
(In thousands)
<TABLE>
<CAPTION>
MAXIMUM AVERAGE WEIGHTED
AMOUNT AMOUNT AVERAGE
CATEGORY OF WEIGHTED OUT- OUT- INTEREST
AGGREGATE BALANCE AT AVERAGE STANDING STANDING RATE
SHORT-TERM END OF INTEREST DURING THE DURING THE DURING THE
BORROWINGS PERIOD RATE PERIOD PERIOD PERIOD
- - ----------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended
December 31, 1994:
Note payable $ - - $2,657 $ 139 8.4%
Year ended
November 30, 1993:
Note payable 6,448 8.3% 7,248 4,399 8.2
Year ended
November 30, 1992:
Note payable 6,800 8 6,800 3,948 7.5
</TABLE>
Notes: Short-term borrowings during the years covered by this schedule consist
of loans made under various established credit lines. The average amount
outstanding during each period was computed by dividing the average outstanding
principal balance by 365 days. The weighted average interest rate during each
period was computed by dividing the actual interest expense on such borrowings
by the average amount outstanding during that period.
F-17<PAGE>
<PAGE>
BYLAWS
OF
WESTWOOD ONE, INC.
(A Delaware Corporation)
As Amended and Restated
ARTICLE I
OFFICES
Section 1.01. REGISTERED OFFICE. The registered office of
Westwood One, Inc. (the "Corporation") in the State of Delaware
shall be located at Corporation Trust Center, 1209 Orange Street,
City of Wilmington, County of New Castle, and the name of the
registered agent at that address shall be The Corporation Trust
Company.
Section 1.02. PRINCIPAL EXECUTIVE OFFICE. The principal
executive office of the Corporation shall be located at 9540
Washington Boulevard, Culver City, California 90232. The Board of
Directors of the Corporation (the "Board of Directors") may change
the location of said principal executive office.
Section 1.03. OTHER OFFICES. The Corporation may also have
an officer or offices at such other place or places, either within
or without the State of Delaware, as the Board of Directors may
from time to time determine or as the business of the Corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01. ANNUAL MEETINGS. The annual meeting of
stockholders of the Corporation shall be held between May 1 and
August 30 of each year on such date at such time as the Board of
Directors shall determine. At each annual meeting of
stockholders, directors shall be elected in accordance with the
provisions of Section 3.04 hereof and any other proper business
may be transacted.
Section 2.02. SPECIAL MEETINGS. Special meetings of
stockholders for any purpose or purposes may be called at any time
by a majority of the Board of Directors or by the Chairman of the
Board. Special meetings may not be called by any other person or
persons. Each special meeting shall be held at such date and time
as is requested by the person or persons calling the meeting, with
the limits fixed by law.
1
<PAGE>
<PAGE>
Section 2.03. PLACE OF MEETINGS. Each annual or special
meeting of stockholders shall be held at such location as may be
determined by the Board of Directors or, if no such determination
is made, at such place as may be determined by the Chairman of the
Board. If no location is so determined, any annual or special
meeting shall be held at the principal executive office of the
Corporation.
Section 2.04. NOTICE OF MEETINGS. Written notice of each
annual or special meeting of stockholders stating the date and
time when, and the place where, it is to be held shall be
delivered either personally or by mail to stockholders entitled to
vote at such meeting not less than ten (10) nor more than sixty
(60) days before the date of the meeting. The purpose or purposes
for which the meeting is called may, in the case of an annual
meeting, and shall, in the case of a special meeting, also be
stated. If mailed, such notice shall be directed to a stockholder
at his address as it shall appear on the stock books of the
Corporation, unless he shall have filed with the Secretary of the
Corporation a written request that notices intended for him be
mailed to some other address, in which case such notice shall be
mailed to the address designated in such request. When a meeting
is adjourned to another time or place, notice need not be given of
the adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the
adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 2.05. CONDUCT OF MEETINGS. All annual and special
meetings of stockholders shall be conducted in accordance with
such rules and procedures as the Board of Directors may determine
subject to the requirements of applicable law, and as to matters
not governed by such rules and procedures, as the chairman of such
meetings shall determine. The chairman of any annual or special
meetings of stockholders shall be the Chairman of the Board. The
Secretary, or in the absence of the Secretary, a person designated
by the Chairman of the Board, shall act as secretary of the
meeting.
Section 2.06. QUORUM. At any meeting of stockholders, the
presence, in person or by proxy, of the holders of record of
shares then issued and outstanding and entitled to vote
representing a majority of the votes eligible to be cast at the
meeting shall constitute a quorum for the transaction of business;
provided, however, that this Section 2.06 shall not affect any
different requirement which may exist under statute, pursuant to
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the rights of any authorized class or series of stock, or under
the Certificate of Incorporation of the Corporation (the
"Certificate") for the vote necessary for the adoption of any
measure governed thereby. In the absence of a quorum, the
stockholders present in person or by proxy, by majority vote and
without further notice, may adjourn the meeting from time to time
until a quorum is attained. At any reconvened meeting following
such an adjournment at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally notified.
Section 2.07. VOTES REQUIRED. A majority of the votes cast
at a duly called meeting of stockholders, at which a quorum is
present, shall be sufficient to take or authorize action upon any
matter which may properly come before the meeting, unless the vote
of greater or different number thereof is required by statue, by
the rights of any authorized class of stock or by the Certificate.
Unless the Certificate or the resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or
series of stock provides for a greater or lesser number of votes
per share, or limits or denies voting rights, each outstanding
share of stock, regardless of class, shall be entitled to one vote
on each matter submitted to a vote of meeting of stockholders.
Section 2.08. CUMULATIVE VOTING. Except as otherwise
provided by applicable law, there shall be no cumulative voting
permitted in the election of Directors, or any other matter
brought before the stockholders.
Section 2.09. PROXIES. A stockholder may vote the shares
owned of record by him either in person or by proxy executed in
writing (which shall include writings sent by telex, telegraph,
cable or facsimile transmission) by the stockholder himself or by
his duly authorized attorney-in-fact. No proxy shall be valid
after three (3) years from its date, unless the proxy provides for
a longer period. Each proxy shall be in writing, subscribed by
the stockholder or his duly authorized attorney-in-fact, and
dated, but it need not be sealed, witnessed or acknowledged.
Section 2.10. STOCKHOLDER ACTION. Any action required or
permitted to be taken by the stockholders of the Corporation must
be effected at a duly called annual meeting or special meeting of
stockholders of the Corporation, unless such action requiring or
permitting stockholder approval is approved by a majority of the
Continuing Directors (as defined in the Certificate), in which
case such action may be authorized or taken by the holders of
outstanding shares of stock having not less than the minimum
voting power that would be necessary to authorize or take such
action at a meeting of stockholders at which all shares entitled
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to vote thereon were present and voted, provided all other
requirements of applicable law and the Certificate have been
satisfied.
Section 2.11. LIST OF STOCKHOLDERS. The Secretary of the
Corporation shall prepare and make (or cause to be prepared and
made), at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order and showing the
address of, and the number of shares registered in the name of,
each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where
the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the duration
thereof, and may be inspected by any stockholder who is present.
Section 2.12. INSPECTORS OF ELECTION. In advance of any
meeting of stockholders, the Board of Directors may appoint
Inspectors of Election to act at such meeting or at any
adjournment or adjournments thereof. If such Inspectors are not
so appointed or fail or refuse to act, the chairman of any such
meeting may (and, upon the demand of any stockholder or
stockholder's proxy, shall) make such an appointment.
The number of Inspectors of Election shall be one (1) or
three (3) as directed by the Chairman of the Board from time to
time. If there are three (3) Inspectors of Election, the
decision, act or certificate of a majority shall be effective and
shall represent the decision, act or certificate of all. No such
Inspector need be a stockholder of the Corporation.
The Inspectors of Election shall determine the number of
shares outstanding, the voting power of each, the shares
represented at the meeting, the existence of a quorum and the
authenticity, validity and effect of proxies; they shall receive
votes, ballots, or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote,
count and tabulate all votes or consents, determine when the polls
shall close and determine the result; and finally, they shall do
such acts as may be proper to conduct the election or vote with
fairness to all stockholders. On request, the Inspectors shall
make a report in writing to the secretary of the meeting
concerning any challenge, question or other matter as may have
been determined by them and shall execute and deliver to such
secretary a certificate of any fact found by them.
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ARTICLE III
DIRECTORS
Section 3.01. POWERS. The business and affairs of the
Corporation shall be managed by and be under the direction of the
Board of Directors. The Board of Directors shall exercise all the
power of the Corporation, except those that are conferred upon or
reserved to the stockholders by statute, the Certificate or these
Bylaws.
Section 3.02. NUMBER. Except as otherwise fixed pursuant
to the provisions of Section 4 of Article Fourth of the
Certificate in connection with rights to elect additional
directors under specified circumstances which may be granted to
the holders of any class or series of Preferred Stock, par value
One Cent ($0.01) per share of the Corporation ("Preferred Stock"),
the number of directors shall be fixed from time to time by
resolution of the Board of Directors but shall not be less than
three (3). The Board of Directors shall consist of nine (9)
directors until changed as herein provided.
Section 3.03. INDEPENDENT OUTSIDE DIRECTORS. At least
thirty three and one-third percent (33 1/3%) of the members of the
Board of Directors of the Corporation shall at all times be
"Independent Outside Directors," which term is hereby defined to
mean any director who: has not been an officer or employee of the
Corporation or Infinity Broadcasting Corporation or any of their
respective subsidiaries, or any other person having a relationship
which, in the opinion of the Board of Directors or a committee
thereof, would interfere with the exercise of independent
judgement in carrying out the responsibilities of a director.
Section 3.04. ELECTION AND TERM OF OFFICE. Except as
provided in Section 3.07 hereof and subject to the right to elect
additional directors under specified circumstances which may be
granted, pursuant to the provisions of Section 4 of Article Fourth
of the Certificate, to the holders of any class or series of
Preferred Stock, directors shall be elected by the stockholders of
the Corporation. The Board of Directors shall be and is divided
into three classes: Class I, Class II and Class III. The number
of directors in each class shall be the whole number contained in
the quotient obtained by dividing the authorized number of
directors (fixed pursuant to Section 3.02 hereof) by three. If a
fraction is also contained in such quotient, then additional
directors shall be apportioned as follows: if such fraction is
one-third, the additional director shall be a member of Class I;
and if such fraction is two-thirds, one of the additional
directors shall be a member of Class I and the other shall be a
member of Class II. Except as otherwise required by applicable
law, each director shall serve for a term ending on the date of
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the third annual meeting of stockholders of the Corporation
following the annual meeting at which such director was elected.
Notwithstanding the foregoing provisions of this Section
3.04: each director shall serve until his successor is elected
and qualified or until his death, resignation or removal; no
decrease in the authorized number of directors shall shorten the
term of any incumbent director; and additional directors, elected
pursuant to Section 4 of Article Fourth of the Certificate in
connection with rights to elect such additional directors under
specified circumstances which may be granted to the holders of any
class or series of Preferred Stock, shall not be included in any
class, but shall serve for such term or terms and pursuant to such
other provisions as are specified in the resolution of the Board
of Directors establishing such class or series.
Section 3.05. ELECTION OF CHAIRMAN OF THE BOARD. At the
organizational meeting immediately following the annual meeting of
stockholders, the directors shall elect a Chairman of the Board
from among the directors, who shall hold office until the
corresponding meeting of the Board of Directors in the next year
and until his successor shall have been elected or until his
earlier resignation or removal. Any vacancy in such office may be
filled for the unexpired portion of the term in the same manner by
the Board of Directors at any regular or special meeting.
Section 3.06. REMOVAL. Subject to the right to elect
directors under specified circumstances which may be granted
pursuant to Section 4 of Article Fourth of the Certificate to the
holders of any class or series of Preferred Stock, any director
may be removed from office only as provided in Article Tenth of
the Certificate.
Section 3.07. VACANCIES AND ADDITIONAL DIRECTORSHIPS.
Except as otherwise provided pursuant to Section 4 of Article
Fourth of the Certificate in connection with rights to elect
additional directors under specified circumstances which may be
granted to the holders of any class or series of Preferred Stock,
newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a
majority of the remaining directors then in office, regardless of
their class, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the class of directors in which the new directorship was created
or the vacancy occurred and until such director's successor shall
have been elected and qualified or until such director's death,
resignation or removal, whichever first occurs. No decrease in
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the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Section 3.08. REGULAR AND SPECIAL MEETINGS. Regular
meetings of the Board of Directors shall be held immediately
following the annual meeting of the stockholders, and at such
other times as shall be from time to time set by the Board of
Directors, unless a regular meeting is otherwise called by the
Chairman of the Board in accordance with applicable law.
Special meetings of the Board of Directors shall be held
upon call by or at the direction of the Chairman of the Board, the
Chief Executive Officer, the Executive Vice President, or any two
directors, except that when the Board of Directors consists of one
director, then the one director may call a special meeting.
Except as otherwise required by law, notice of each special
meeting shall be mailed to each director, addressed to him at his
residence or usual place of business, at least two days before the
day on which the meeting is to be held, or shall be sent to him at
such place by telex, telegram, cable, facsimile transmission or
telephoned or delivered to him personally, not later than the day
before the day on which the meeting is to be held. Such notice
shall state the time and place of such meeting, but need not state
the purpose or purposes thereof, unless otherwise required by law,
the Certificate or these Bylaws.
Notice of any meeting need not be given to any director who
shall attend such meeting in person or who shall waive notice
thereof, before or after such meeting, in a signed writing.
Section 3.09. QUORUM. At all meetings of the Board of
Directors, a majority of the fixed number of directors shall
constitute a quorum for the transaction of business, except that
when the Board of Directors consists of one director, then the one
director shall constitute a quorum. In the absence of a quorum,
the directors present, by majority vote and without notice other
than by announcement, may adjourn the meeting from time to time
until a quorum shall be present. At any reconvened meeting
following such an adjournment at which a quorum shall be present,
any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 3.10. VOTES REQUIRED. Except as otherwise provided
by applicable law or by the Certificate, the vote of a majority of
the directors present at a meeting duly held at which a quorum is
present shall be sufficient to pass any measure.
Section 3.11. PLACE AND CONDUCT OF MEETINGS. Each regular
meeting and special meeting of the Board of Directors shall be
held at a location determined as follows: The Board of Directors
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may designate any place, within or without the State of Delaware,
for the holding of any meeting. If no such designation is made:
(i) any meeting called by a majority of the directors shall be
held at such location, within the county of the Corporation's
principal executive office, as the directors calling the meeting
shall designate; and (ii) any other meeting shall be held at such
location, within the county of the Corporation's principal
executive office, as the Chairman of the Board may designate or,
in the absence of such designation, at the Corporation's principal
executive office. Subject to the requirements of applicable law,
all regular and special meetings of the Board of Directors shall
be conducted in accordance with such rules and procedures as the
Board of Directors may approve and, as to matters not governed by
such rules and procedures, as the chairman of such meeting shall
determine. The chairman of any regular or special meeting shall
be the Chairman of the Board, or in his absence a person
designated by the Board of Directors. The Secretary, or in the
absence of the Secretary a person designated by the chairman of
the meeting, shall act as secretary of the meeting. Meetings of
the Board of Directors may be held through use of conference
telephone or similar communications equipment so long as all
members participating in such meeting can hear one another at the
time of such meeting. Participation in such a meeting constitutes
presence in person at such meeting.
Section 3.12. ACTION BY UNANIMOUS WRITTEN CONSENT. Any
action required or permitted to be taken by the Board may be taken
without a meeting, if all members of the Board shall individually
or collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the
proceedings of the Board. Such action by written consent shall
have the same force and effect as a unanimous vote of such
Directors.
Section 3.13. FEES AND COMPENSATION. Directors shall be
paid such compensation as may be fixed from time to time by
resolutions of the Board of Directors (a) for their usual and
contemplated services as directors, (b) for their services as
members of committees appointed by the Board of Directors,
including attendance at committee meetings as well as services
which may be required when committee members must consult with
management staff, and (c) for extraordinary services as directors
or as members of committees appointed by the Board of Directors,
over and above those services for which compensation is fixed
pursuant to items (a) and (b) in this Section 3.13. Compensation
may be in the form of an annual retainer fee or a fee for
attendance at meetings, or both, or in such other form or on such
basis as the resolutions of the Board of Directors shall fix.
Directors shall be reimbursed for all reasonable expenses incurred
by them in attending meetings of the Board of Directors and
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committees appointed by the Board of Directors and in performing
compensable extraordinary services. Nothing contained herein
shall be construed to preclude any director from serving the
Corporation in any other capacity, such as an officer, agent,
employee, consultant or otherwise, and receiving compensation
therefor.
Section 3.14. COMMITTEES OF THE BOARD OF DIRECTORS.
Subject to the requirements of applicable law, the Board of
Directors may from time to time establish committees, including
standing or special committees, which shall have such duties and
powers as are authorized by these Bylaws or by the Board of
Directors. Committee members, and the chairman of each committee,
shall be appointed by the Board of Directors. The Chairman of the
Board, in conjunction with the several committee chairmen, shall
make recommendations to the Board of Directors for its final
action concerning members to be appointed to the several
committees of the Board of Directors. Any member of any committee
may be removed at any time with or without cause by the Board of
Directors. Vacancies which occur on any committee shall be filled
by a resolution of the Board of Directors. If any vacancy shall
occur in any committee by reason of death, resignation,
disqualification, removal or otherwise, the remaining members of
such committee, so long as a quorum is present, may continue to
act until such vacancy is filled by the Board of Directors. The
Board of Directors may, by resolution, at any time deemed
desirable, discontinue any standing or special committee. Members
of standing committees, and their chairmen, shall be elected
yearly at the organizational meeting of the Board of Directors
which is held immediately following the annual meeting of
stockholders.
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Section 3.15. MEETINGS OF COMMITTEES. Each committee of
the Board of Directors shall fix its own rules of procedure
consistent with the provisions of applicable law and of any
resolutions of the Board of Directors governing such committee.
Each committee shall meet as provided by such rules or such
resolution of the Board of Directors, and shall also meet at the
call of its chairmen or any two (2) members of such committee.
Unless otherwise provided by such rules or by such resolution, the
provisions of these Bylaws under Article III entitled "Directors"
relating to the place of holding meetings and the notice required
for meetings of the Board of Directors shall govern the place of
meetings and notice of meetings for committees of the Board of
Directors. A majority of the members of each committee shall
constitute a quorum thereof, except that when a committee consists
of one (1) member, then the one (1) member shall constitute a
quorum. In the absence of a quorum, a majority of the members
present at the time and place of any meeting may adjourn the
meeting from time to time until a quorum shall be present and the
meeting may be held as adjourned without further notice or waiver.
Except in cases where it is otherwise provided by the rules of
such committee or by a resolution of the Board of Directors, the
vote of a majority of the members present at a duly constituted
meeting at which a quorum is present shall be sufficient to pass
any measure by the committee.
ARTICLE IV
OFFICERS
Section 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE.
The Corporation shall have a Chairman of the Board or a Chief
Executive Officer or both, such Vice Presidents as the Board of
Directors deems appropriate, a Secretary and a Chief Financial
Officer. These officers shall be elected annually by the Board of
Directors at the organizational meeting immediately following the
annual meeting of stockholders, and each such officer shall hold
office until the corresponding meeting of the Board of Directors
in the next year and until his successor shall have been elected
and qualified or until his earlier resignation, death or removal.
Any vacancy in any of the above offices may be filled for the
unexpired portion of the term by the Board of Directors at any
regular or special meeting.
Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of the
Board shall be the Chairman of the Board of Directors and shall,
subject to the power and authority of the Board of Directors, have
general supervision, direction and control of the business and
affairs of the Corporation. In addition to the above duties, he
shall have such other duties as may from time to time be assigned
to him by the Board of Directors.
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Section 4.03. CHIEF EXECUTIVE OFFICER. The Chief Executive
Officer shall be the general manager of the Corporation, subject
to the power of, and accountable to, the Board of Directors. He
shall have general charge and supervision of the operating
elements of the Corporation and shall perform such other duties as
may be assigned to him from time to time by the Board of
Directors.
Section 4.04. CHIEF FINANCIAL OFFICER. The Chief Financial
Officer shall be the financial officer of the Corporation. He
shall be responsible to the Chief Executive Officer and the Board
of Directors for the management and supervision of all financial
matters and to provide for the financial growth and stability of
the Corporation. He shall attend all regular meetings of the
Board of Directors and keep the Directors currently informed
concerning all significant financial matters that could impact
upon the business or affairs of the Corporation. He shall also
perform such additional duties as may be assigned to him from time
to time by the Board of Directors or the Chief Executive Officer.
Section 4.05. VICE PRESIDENTS. Vice Presidents of the
Corporation that are elected by the Board of Directors shall
perform such duties as may be assigned to them from time to time
by the Chief Executive Officer.
Section 4.06. SECRETARY. The Secretary shall keep the
minutes of the meetings of the stockholders, the Board of
Directors and all committee meetings. He shall be the custodian
of the corporate seal and shall affix it to all documents which he
is authorized by law or the Board of Directors to sign and seal.
He also shall perform such other duties as may be assigned to him
from time to time by the Board of Directors or the Chief Executive
Officer.
Section 4.07. ASSISTANT OFFICERS. The Chief Executive
Officer may appoint one or more assistant secretaries, and such
other assistant officers as the business of the Corporation may
require, each of whom shall hold office for such period, have such
authority and perform such duties as may be specified from time to
time by the Chief Executive Officer.
Section 4.08. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED.
In the case of the absence or disability of an officer of the
Corporation or for any other reason that may seem sufficient to
the Board of Directors, the Board of Directors, or any officer
designated by it, or the Chief Executive Officer, may, for the
time of the absence or disability, delegate such officer's duties
and powers to any other officer of the Corporation.
Section 4.09. OFFICERS HOLDING TWO OR MORE OFFICES. The
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same person may hold any two or more of the above-mentioned
offices. However, no officer shall execute, acknowledge or verify
any instrument in more than one capacity, if such instrument is
required by law, by the Certificate or by these Bylaws, to be
executed, acknowledged or verified by any two or more officers.
Section 4.10. COMPENSATION. The Board of Directors shall
have the power to fix the compensation of all officers and
employees of the Corporation.
Section 4.11. RESIGNATIONS. Any officer may resign at any
time by giving written notice to the Board of Directors, to the
Chairman of the Board, to the Chief Executive Officer, or to the
Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein unless otherwise determined
by the Board of Directors. The acceptance of a resignation by the
Corporation shall not be necessary to make it effective.
Section 4.12. REMOVAL. Any officer of the Corporation may
be removed, with or without cause, by the affirmative vote of a
majority of the entire Board of Directors. Any assistant officer
of the Corporation may be removed, with or without cause, by the
Chairman of the Board, the Chief Executive Officer or by the Board
of Directors.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER CORPORATE AGENTS
To the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), the Corporation shall indemnify
and hold harmless against all expenses, liability and loss
(including, without limitation, attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by each person who was
or is a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding,
whether or not by or in the right of the Corporation, and whether
civil, criminal, administrative, investigative or otherwise (any
such action, suit or proceeding being hereinafter in this Article
referred to as a "proceeding"), by reason of the fact that such
person is or was a director, officer, employee or agent of the
Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, or was a director,
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officer, employee or agent of a foreign or domestic corporation
which was a predecessor corporation of the Corporation or of
another enterprise at the request of such predecessor corporation
(any such person being hereafter in this Article referred to as an
"indemnifiable party"). The right to indemnification conferred by
this Article shall be a contract right. Where required by law,
the indemnification provided for in this Article shall be made
only as authorized in the specific case upon a determination, in
the manner provided by law, that the indemnification of the
indemnifiable party is proper in the circumstances. The
Corporation shall advance to indemnifiable parties expenses
incurred in defending any proceeding prior to the final
disposition thereof subject to the receipt of such undertakings
from such indemnifiable party as shall be required by the
applicable law. This Article shall create a right of
indemnification for each such indemnifiable party whether or not
the proceeding to which the indemnification relates arose in whole
or in part prior to adoption of this Article (or the adoption of
the comparable provisions of the Bylaws of the Corporation's
predecessor corporation) and, in the event of the death of an
indemnifiable party, such right shall extend to such indemnifiable
party's heirs and legal representatives.
If a claim under this Article is not paid in full by the
Corporation within thirty days after a written claim has been
received by the Corporation, the indemnifiable party may at any
time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part,
the indemnifiable party shall be entitled to be paid also the
expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the
indemnifiable party has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable
standard or conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard
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of conduct.
The right of indemnification hereby given shall not be
exclusive of any right such indemnifiable party may have, whether
by law or under any agreement, insurance policy, vote of the Board
of Directors or stockholders, or otherwise.
The Corporation shall have power to purchase and maintain
insurance on behalf of any indemnifiable party against any
liability asserted against or incurred by the indemnifiable party
in such capacity or arising out of the indemnifiable party's
status as such whether or not the Corporation would have the power
to indemnify the indemnifiable party against such liability.
ARTICLE VI
STOCK
Section 6.01. CERTIFICATES. Except as otherwise provided
by law, each stockholder shall be entitled to a certificate or
certificates which shall represent and certify the number and
class (and series, if appropriate) of shares of stock owned by him
in the Corporation. Each certificate shall be signed in the name
of the Corporation by the Chairman of the Board or the Chief
Executive Officer or a Vice President together with the Secretary,
or an Assistant Secretary, or the Chief Financial Officer. Any or
all of the signatures on any certificate may be facsimile. In
case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were an officer, transfer
agent or registrar at the date of issue.
Section 6.02. TRANSFER OF SHARES. Shares of stock shall be
transferable on the books of the Corporation only by the holder
thereof, in person or by his duly authorized attorney, upon the
surrender of the certificate representing the shares to be
transferred, properly endorsed, to the Corporation's registrar if
the Corporation has a registrar. The Board of Directors shall
have power and authority to make such other rules and regulations
concerning the issue, transfer and registration of certificates of
the Corporation's stock as it may deem expedient.
Section 6.03. TRANSFER AGENTS AND REGISTRARS. The
Corporation may have one or more transfer agents and one or more
registrars of its stock whose respective duties the Board of
Directors or the Secretary may, from time to time, define. No
certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until
registered by a registrar, if the Corporation has a registrar.
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The duties of transfer agent and registrar may be combined.
Section 6.04. STOCK LEDGERS. Original or duplicate stock
ledgers, containing the names and addresses of the record
stockholders of the Corporation, and the number of shares of each
class of stock held by them, shall be kept at the principal
executive office of the Corporation or at the office of its
transfer agent or registrar. The Secretary or his designee shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in
the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is
present.
Section 6.05. RECORD DATES. The Board of Directors shall
fix, in advance, a date as the record date for the purpose of
determining stockholders entitled to notice of, or to vote at, any
meeting of stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock, or in order to make a determination of stockholders for any
other proper purpose. Such date in any case shall be not more
than sixty (60) days, and in case of a meeting of stockholders,
not less than ten (10) days, prior to the date on which the
particular action, requiring such determination of stockholders,
is to be taken. Only those stockholders of record on the date so
fixed shall be entitled to any of the foregoing rights,
notwithstanding the transfer of any such stock on the books of the
Corporation after any such record date fixed by the Board of
Directors.
Section 6.06. NEW CERTIFICATES. In case any certificate of
stock is lost, stolen, mutilated or destroyed, the Board of
Directors may authorize the issuance of a new certificate in place
thereof upon such terms and conditions as it may deem advisable;
or the Board of Directors may delegate such power to any officer
or officers or agents of the Corporation; but the Board of
Directors or such officer or officers or agents, in their
discretion, may refuse to issue such a new certificate unless the
Corporation is ordered to do so by a court of competent
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jurisdiction. Furthermore, the Corporation, or its officers or
agents, may require the owner of a lost, stolen, mutilated or
destroyed certificate, or his legal representative, to give the
Corporation a bond (or other security) sufficient to indemnify it
against any claim that may be made on account of the alleged loss,
theft, mutilation or destruction of any such certificate or the
issuance of new certificates or uncertified shares.
Section 6.07. STOCK PURCHASE PLANS; STOCK OPTION PLANS.
1. The Corporation may adopt and carry out a stock
purchase plan or agreement or stock option plan or agreement
providing for the issue and sale, for such consideration as may be
fixed, of its unissued shares, or of issued shares acquired or to
be acquired, to one or more of the employees or directors of the
Corporation or of a subsidiary or to a trustee on their behalf and
for the payment for such shares in installments or at one time,
and may provide for aiding any such persons in paying for such
shares by compensation for services rendered, promissory notes or
otherwise.
2. A stock purchase plan or agreement or stock option
plan or agreement may include, among other features, the fixing of
eligibility for participation therein, the class and price of
shares to be issued or sold under the plan or agreement, the
number of shares which may be subscribed for, the method of
payment therefor, the reservation of title until full payment
therefor, the effect of the termination of employment, an option
or obligation on the part of the Corporation to repurchase the
shares upon termination of employment, subject to applicable law,
restrictions upon transfer of the shares and the time limits of
and termination of the plan.
ARTICLE VII
CORPORATE RECORDS
Section 7.01. TYPES OF RECORDS. The Corporation shall keep
adequate and correct books and records of account, shall keep
minutes of the proceedings of the stockholders, Board of Directors
and committees of the Board of Directors and shall keep at its
principal executive office, or at the office of its transfer agent
or registrar, a record of its stockholders, giving the names and
addresses of all stockholders and the number and class of shares
held by each. Such minutes shall be kept in written form. Such
other books and records shall be kept either in written form or in
any other form capable of being converted into clearly legible
written form within a reasonable time.
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Section 7.02. FINANCIAL STATEMENTS AND REPORTS. To the
extent applicable, the Corporation will file with the Securities
and Exchange Commission ("S.E.C.") all quarterly, other interim,
and annual financial reports required by the Securities and
Exchange Act of 1934 (the "Exchange Act"). Further, so long as
the Corporation is subject to the reporting requirements of
Section 12 of the Exchange Act, it shall prepare and submit to
stockholders an annual report in accordance with Rule 14a-3 of the
S.E.C. A copy of the foregoing reports shall be maintained in the
principal executive office of the Corporation and such reports
shall be exhibited at all reasonable times to any stockholder
requesting an examination of them.
The financial statements referred to in this section shall
be accompanied by the report thereon, if any, of any independent
accountants engaged by the Corporation or the certificate of an
authorized officer of the Corporation that such financial
statements were prepared without audit from the books and records
of the Corporation.
Section 7.03. STOCKHOLDERS' RIGHT OF INSPECTION. The books
and records and minutes of proceedings of the stockholders and the
Board of Directors and committees of the Board of Directors shall
be open to inspection, upon the written demand under oath stating
the purpose thereof, by any stockholder or holder of a voting
trust certificate at any reasonable time during usual business
hours, for any proper purpose. This right of inspection shall
extend to the records of the subsidiaries, if any, of the
Corporation. Such inspection may be made in person, or by agent
or attorney, and the right of inspection includes the right to
copy and make extracts.
Section 7.04. DIRECTORS' RIGHT OF INSPECTION. Every
director shall have the right at any reasonable time to inspect
and copy all books, records and documents of every kind and to
inspect the physical properties of the Corporation and/or its
subsidiary corporations for a purpose reasonably related to his
position as a director. Such inspection may be made in person or
by agent or attorney and the right of inspection includes the
right to copy and make extracts.
ARTICLE VIII
SUNDRY PROVISIONS
Section 8.01. FISCAL YEAR. The fiscal year of the
corporation shall end on the 31st day of December of each year.
Section 8.02. SEAL. The seal of the Corporation shall bear
the name of the Corporation, the date of its incorporation, and
the word "Delaware."
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Section 8.03. VOTING OF STOCK IN OTHER CORPORATIONS. Any
shares of stock in other corporations or associations, which may
from time to time be held by the Corporation, may be represented
and voted at any of the stockholders' meetings thereof by the
Chairman of the Board or his designee. The Board of Directors,
however, may by resolution appoint some other person or persons to
vote such shares, in which case such person shall be entitled to
vote such shares upon the production of a certified copy of such
resolution.
Section 8.04. AMENDMENTS. These Bylaws may be adopted,
repealed, rescinded, altered or amended only as provided in
Articles Fifth and Sixth of the Certificate.
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SECOND AMENDMENT
THIS SECOND AMENDMENT is made effective as of February 2,
1994 with reference to the Employment Agreement dated October 18,
1993 by and between Westwood One, Inc. (the "Company") and Norman
J. Pattiz ("Employee"), as amended by the First Amendment dated
January 26, 1994 (the "Agreement").
WHEREAS, Employee and the Company desire to amend certain
provisions of the Agreement and except for such amendment to have
such Agreement remain in full force and effect;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is acknowledged, Employee and Company hereby
agree as follows:
The Agreement is hereby amended as follows:
1. Section 3.1 (Salary and Bonus).
The Agreement shall be amended by adding the following
sentence to the end of Section 3.1:
"Notwithstanding anything in this Agreement to the contrary,
the incentive compensation determined and payable as set
forth on Schedule 2 shall be determined in accordance with
Section 162(m) of the Internal Revenue Code of 1986, as
amended, and the final regulations promulgated by the United
States Treasury Department thereunder."
2. Schedule 2.
Schedule 2 to the Agreement shall be amended and restated in
its entirety to read as set forth on the Schedule 2 attached
hereto and incorporated in the Agreement by this reference.
3. Limited Effect of Amendment.
Each and every one of the other terms and conditions of the
Agreement shall remain unchanged and in full force and effect, and
the Agreement shall be amended only as specifically set forth
herein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
EMPLOYEE WESTWOOD ONE, INC.
NORMAN J. PATTIZ By: ERIC R. WEISS
_________________________ ___________________
Norman J. Pattiz Eric R. Weiss
Executive Vice President
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SCHEDULE 2
CASH INCENTIVE COMPENSATION
For each fiscal year of the Company, commencing with the
fiscal year ending November 30, 1994, that the Company meets or
exceeds its EBITAD target as established by the Compensation
Committee of the Board of Directors (or other similar committee of
the Board of Directors meeting the requirements of Section 162(m)
of the Internal Revenue Code of 1986, as amended) not later than
90 days after the beginning of each such fiscal year, Employee
will be entitled to receive cash incentive compensation ("CIC
Bonus") as follows:
<TABLE>
Fiscal Year CIC Bonus
___________ _________
<C> <C>
1994 $250,000
1995 $275,000
1996 $302,500
1997 $332,750
1998 $366,025
</TABLE>
If the termination date of this Agreement is other than the
last day of a fiscal year, Employee will be entitled to a pro-
rated CIC Bonus for the portion of the year preceding the
termination date if the EBITAD target is met through the end of
the month ending on or next preceding the termination date.
EBITAD means earnings before interest, taxes, amortization
and depreciation as reported in the Company's Form 10-K for the
fiscal year, or, if for a portion of the year, as approved by the
Board based on the Company's books and records.
The CIC Bonus for any year shall be paid not later than 30
days after the filing by the Company of its Form 10-K with the
Securities and Exchange Commission for such year, or if the CIC
bonus is for a part of the year, not later than 60 days after the
end of the last month taken into account in determining whether
the EBITAD target is met.
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EMPLOYMENT AGREEMENT
This Agreement dated as of April 19, 1990 (as from time to time
amended and in effect, this "Agreement") is among UniStar
Communications Group, Inc., a Delaware corporation ("UniStar"),
UniStar Radio Networks, Inc. ("Networks"; UniStar and Networks are
collectively sometimes referred to herein as the "Company") and
William J. Hogan (the "Executive").
The Executive is currently employed by the Networks as
Co-President and Co-Chief Operating Officer. The parties desire
to provide for the Executive's continued employment by Networks on
behalf of the Company in those capacities in accordance with the
provisions of this Agreement.
It is therefore agreed as follows:
1. Employment. The Company hereby employs the Executive as
Co-President and Co-Chief Executive Officer of Networks for a
period commencing on the date of this Agreement and ending April
18, 1995 (the "Employment Term"). The Executive
hereby accepts such employment and agrees to perform the services
specified herein, all upon and subject to the terms and conditions
hereinafter stated.
2. Duties. The Executive shall serve the Company as a
Co-President and Co-Chief Operating Officer of the Networks. The
Executive shall report to, and be subject to the direction and
control of, the Co-Chairmen of the Company and the Board of
Directors of the Company (the "Board"). The Executive shall have
such duties, authority and responsibilities as are normally
associated with his positions and as may be determined from time
to time by the Co-Chairmen and the Board consistent with his
position with Networks. The Executive shall devote his best
efforts and all of his business time to the performance of his
duties under this Agreement and shall perform them faithfully,
diligently and competently. The Executive shall not engage in
outside activities if such activities would materially interfere
with the performance of his duties under this Agreement.
3. Salary. The Company shall pay to the Executive, as
compensation in full for the Executive's services hereunder,
before any deduction or withholding, a base salary for each year
in the Employment Term as follows:
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April 19, 1990 - April 18, 1991 $322,000
April 19, 1991 - April 18, 1992 $353,000
April 19, 1992 - April 18, 1993 $384,000
April 19, 1993 - April 20, 1994 $415,000
April 19, 1994 - April 20, 1995 $446,000
4. Bonus.
(a) Signing Bonus. The Executive shall receive from the
Company a signing bonus for executing this Agreement in the amount
of $30,163.14. The signing bonus shall be payable on January 1,
1991; provided that the Executive is employed by the Company on
that date. Should the Executive's employment with the Company be
terminated for any reason whatsoever the following amounts shall
be repayable to the Company by the Executive if such termination
occurs during the periods indicated below:
April 19, 1990 - April 18, 1991 $30,163.14
April 19, 1991 - April 18, 1992 $29,187.18
April 19, 1992 - April 18, 1993 $24,992.73
April 19, 1993 - April 18, 1994 $15,753.00
(b) Additional Bonus. In addition to his annual base
salary, the Executive may receive such discretionary bonus as the
Board may, in its sole and absolute discretion, determine.
5. Fringe Benefits. The Executive shall be entitled to
participate in or receive all benefits under any employee benefit
plan or arrangement made available by the Company to its senior
executives, subject to and on a basis consistent with the terms
and conditions of such plans and arrangements, including, without
limitations, all appropriate deductions.
6. Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable, ordinary and necessary out-of-pocket
expenses for entertainment, travel, meals, hotel accommodations
and the like incurred by him in connection with the performance of
his services for the Company pursuant to this Agreement, each such
payment or reimbursement to be upon submission by him of a
statement documenting such expenses in accordance with Company
policy.
7. Vacation. During each year of the Employment Term, the
Executive shall be entitled to four weeks vacation to be taken at
times selected by him, with the reasonable concurrence of the
Co-Chairmen of the Company, which are consistent with the proper
performance of his duties.
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8. Termination.
(a) Death, Disability or Discharge Without Cause. If the
Executive dies during the Employment Term, this Agreement shall
automatically terminate and the Company shall have no further
obligation to the Executive or his estate except to reimburse the
Executive for accrued and unpaid base salary, accrued
out-of-pocket expenses pursuant to Section 6 hereof, and the
obligation, to the extent required under the Consolidated Omnibus
Budget Reconciliation Act ("COBRA"), to provide to the family of
the Executive a temporary extension of medical insurance coverage
at group rates, which premium the family member requesting such
continued coverage shall be obligated to pay in full. If, during
the Employment Term, the Executive is prevented by reason of
disability from performing his duties for 180 consecutive calendar
days, then the Company may, by notice to the Executive subsequent
thereto, terminate his employment under this Agreement as of the
date of the notice. If the Executive's employment is terminated
by reason of disability, the Executive shall continue to
receive his base salary, reduced by any payments received by the
Executive under the Company's long-term disability program, for a
period of six months following such termination and the
opportunity to extend medical coverage pursuant to and in
accordance with COBRA (at the cost of the Executive), but shall
not be obligated to provide any other benefits described in this
Agreement. Subject to paragraphs (c) and (d) below, if the
Executive is discharged by the Company "without cause," as defined
in paragraph (b) below, then the Company shall remain obligated to
pay to him an amount equal to his base salary for the lesser of
(i) one year and (ii) the remainder of the Employment Term, all
reimbursement for accrued out-of-pocket expenses due to the
Executive under Section 6 hereof, as well as to provide the
Executive with continued medical coverage pursuant to and in
accordance with COBRA (until the earlier of such time as is
provided for under COBRA on such time as the Executive obtains
major medical coverage from another employer), but shall not be
obligated to provide any other benefits described in this
Agreement.
(b) Discharge for Cause. Prior to the end of the
Employment Term, the Company, upon 30 days prior written notice,
may discharge the Executive for cause and terminate this Agreement
without any further obligation to the Executive except to pay the
Executive's (i) accrued and unpaid base salary through the date of
termination, (ii) unreimbursed accrued out-of-pocket expenses
pursuant to Section 6 hereof and (iii) any benefits required to be
provided under COBRA. For purposes of this Agreement, a discharge
for "cause" shall mean a discharge resulting from (A) fraud,
theft, gross malfeasance, or other similar actions on the part of
the Executive (including, without limitation, conduct of a
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felonious or criminal nature, embezzlement or misappropriation of
corporate assets) in each case affecting the Company or that in
the reasonable judgment of the Board (taking into account all
relevant circumstances) would likely have a material and
demonstrable adverse effect on the Company or the business or
professional reputation of the Executive; (B) the chronic
addiction of the Executive to drugs or alcohol which adversely
affects the performance of the Executive's duties under this
Agreement; (C) the Executive's willful failure, refusal or neglect
to perform the services reasonably required of him as and when
directed by, or to follow the policies or directives of, both of
the Co-Chairmen of the Company or the Board after written notice
from the Co-Chairmen or the Board (which notice shall specifically
identify the manner in which the Co-Chairmen or the Board, as the
case may be, believes that the Executive has failed); or (D) gross
misconduct of the Executive in the discharge of his duties
hereunder or gross misconduct that, in the reasonable judgment of
the Board, may become a matter of public knowledge and that, in
the reasonable judgment of the Board, may have a material and
demonstrable adverse effect on the business, condition or affairs
of the Company or any subsidiary of the Company. If the Executive
is discharged by the Company for any reason other than those
enumerated in this Section 8(b) or by reason of disability, such
discharge shall be deemed to be a discharge "without cause."
(c) Voluntary Termination by Executive. If the Executive
voluntarily terminates his employment with the Company, the
Company shall not be obligated to make any further payments of
base salary, signing bonus or provide any other benefits under
this Agreement (other than those benefits required to be provided
to the Executive under COBRA).
(d) Termination as a Result of change of Control. If the
Executive's employment is terminated for any reason (including,
without limitation, voluntary termination by the Executive) within
six months after a Change of Control (as hereinafter defined),
then, notwithstanding the provisions of Section 8(a), the Company
shall pay to the Executive an amount equal to (i) the Executive's
then base salary for a period of one year and (ii) all
reimbursement for accrued out-of-pocket expenses due to the
Executive under Section 6 hereof, which amounts shall be payable
in one payment on the data of termination of his employment, and
the Company shall continue to provide the Executive with continued
medical coverage pursuant to and in accordance with COBRA, but
shall not be required to make any other payments or provide any
other benefits to the Executive. For purposes of this Section
8(d), "Change of Control" shall mean, such time as Messrs.
Nicholas J. Verbitsky, C.T. Robinson, William C. Moyes and Richard
W. Clark and their respective affiliates shall no longer own in
the aggregate in excess of 30% of the voting stock of the Company
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and shall all cease to be members of the Board; or (b) as neither
Mr. Nicholas J. Verbitsky or Mr. C. T. Robinson is the chief
executive officer of the Company.
9. Covenant Not to Compete.
(a) In consideration of the employment by the Company of
the Executive under this Agreement, the Executive agrees that (i)
during the Executive's employment with the Company and (ii) unless
(x) the Executive is terminated without cause or (y) the Executive
remains in the employ of the Company for the entire Employment
Term and is not offered continued employment with the Company
pursuant to a new employment agreement the terms of which are
substantially similar to the terms of this Agreement, then for the
two-year period following any termination of the Executive's
employment with the Company, the Executive will not, without the
prior written approval of the Board, directly or indirectly,
either as an employee, employer, consultant, agent, principal,
partner, stockholder, officer, director, or in any other
individual or representative capacity, engage in any business
situated anywhere in the United States (or its territories or
possessions) or activity substantially similar to that of the
Company or any subsidiary (i) conducted during the Employment
Term, or (ii) under active consideration by the Company or any of
its subsidiaries at the time of termination or within six months
prior thereto, including, without limitation, the radio network
business, radio research and consulting business, marketing and
sales of radio programming or the ownership of radio stations in
markets where the Company owns radio stations at the time the
Executive resigns or is discharged. The obligations of the
Executive pursuant to this Section 9(a)(ii) shall only be in
effect for a one-year period if his employment with the Company
terminates because of a "Change of Control" as pursuant to Section
8(d) hereof.
(b) The Executive agrees that during the employment Term
and thereafter, the Executive shall not, directly or indirectly,
disclose to anyone at any time (except in the regular course of
the Company's business or as required by law), or use in
competition with the Company or any subsidiary, any information
acquired by the Executive during his employment hereunder with
respect to any confidential or secret aspect of the Company's or
any subsidiary's operations or affairs unless such information has
become public knowledge other than by reason of unauthorized
actions (direct or indirect) of the Executive.
(c) The Executive shall not, directly or indirectly,
either during the term of the Executive's employment under this
Agreement or for a period of one year thereafter, solicit the
services of any person who was a full-time employee of the Company
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or any subsidiary during the last year of the term of the
Executive's employment under this Agreement.
(d) All files, records (including any records relating to
customers or customer accounts), documents, questionnaires,
handbooks and similar items relating to the business of the
Company or any subsidiary shall remain the exclusive property of
the Company or such subsidiary, and all such items shall be
immediately returned to the Company or such subsidiary upon the
termination of the Executive's employment with the Company.
(e) Nothing contained herein shall prevent the Executive
from using his learned skills, know-how or general business
experience, including such skills, know-how and experience gained
while working for the Company.
10. Confidential Information.
(a) The Executive recognizes and acknowledges that the
Executive may receive certain confidential information and trade
secrets ("Secrets") concerning the Company's business and affairs
that may be of great value to the Company. The Executive
therefore agrees that during the term hereof he will not disclose
or exploit any such Secrets, except (i) with the prior written
consent of the Company; (ii) as he may be required to do so by
applicable law: (iii) as required by the Company in the ordinary
course of his employment hereunder: or (iv) with respect to
Secrets published or non-confidential manner.
(b) After the Executive's employment with the Company
ceases, he shall not disclose or exploit any idea, literary
material or similar property which during the term hereof was
under development or being produced by the Company which the
Executive obtained directly by reason of his employment hereunder,
except as may be excused by Section lO(a) of this Agreement.
(c) The Company expressly agrees that Employee's contacts,
relationships and knowledge of the broadcasting industry, its
trade procedures and practices and all other knowledge customarily
possessed by senior executives in positions similar to the
Executive's position with the Company as such may now and
hereafter exist shall not be deemed to be Secrets hereunder.
11. Remedies.
(a) The Executive acknowledges that the remedy at law for
breach of his covenants under Section 9 or 10 hereof would be
inadequate and, accordingly, in the event of any breach or
threatened breach by the Executive of the provisions of Section 9
or 10 hereof, the Company shall be entitled, in addition to all
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other remedies, to an injunction restraining any such breach
(without posting any bond or other security).
(b) It is agreed that in the event the covenants of the
Executive contained in Section 9 or 10 hereof shall finally be
determined by any court (i) to be void or unenforceable in any
particular area or jurisdiction, and if such determination is
affirmed on appeal, if any, then the parties hereto shall consider
such covenants to be amended and modified so as to eliminate
therefrom the particular area or jurisdiction as to which such
covenants are held to be void or otherwise unenforceable, and as
to all other areas and jurisdictions covered by such covenants,
the terms and provisions hereof shall remain in full force and
effect as originally written; or (ii) to be effective in any
particular area or jurisdiction only if such covenants are
modified to limit their duration or scope, and if such
determination is upheld on appeal, if any, then the parties hereto
shall consider such covenants to be amended and modified with
respect to the particular area or jurisdiction so as to comply
with the order of such court or other constituted legal authority,
and as to all other areas and jurisdictions, and the Executives
covenants contained herein shall remain in full force and effect
as originally written.
(c) The provisions of this Section 11 shall survive any
termination of this Agreement.
12. Unique Services. The services of the Executive hereunder
are of a special, unique and extraordinary character that gives
them a particular value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law, and a
breach by the Executive of any provision of this Agreement will
cause the Company great and irreparable injury and damage.
Accordingly, unless the Executive validly exercises his right to
terminate this Agreement as expressly provided herein, the
Executive hereby expressly agrees that the Company shall be
entitled to the remedies of injunction, specific performance and
other equitable relief in order to prevent a breach of this
Agreement by the Executive. This provision shall not, however, be
construed as a waiver of any rights which the Company may have in
the premises for damages or otherwise.
13. Warranties and Representation of the Executive. The
Executive hereby warrants and represents to the Company as
follows:
(a) The Executive's execution and delivery of this
Agreement does not violate or conflict with any provision of any
document, instrument or agreement (oral or written) to which the
Executive is subject.
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(b) The Executive has not paid or accepted, and will not
pay or accept any money, service or other valuable consideration
for the inclusion of any plug, reference or product
identification, or any other matter, in any program to be
broadcast on any radio network of the Company, or cause or permit
any other violation of the Federal Communications Act of 1934, as
amended.
(c) The Executive agrees that all of the results of the
Executive's services hereunder during the term of this Agreement
shall be deemed to have been accomplished in the course of the
Executive's employment hereunder and all proprietary interest, if
any, therein, shall, for all purposes, as between the Executive
and the Company, its successors, licensees and assigns, belong to
the Company and be the Company's exclusive property.
(d) The Executive hereby agrees to indemnify and hold the
Company and its successors and assigns harmless of and from any
and all losses, damages, costs and expenses, including, without
limitation, reasonable attorney's fees, arising out of or in
connection with the breach of violation of any of the warranties,
representations, covenants or agreements made the Executive
herein.
14. Insurance. The Company may secure in its own name or
otherwise and at its own expense, life, accident, or other
insurance covering the Executive, or the Executive and others, and
the Executive shall not have any right, title or interest in or to
any such insurance. If the Executive shall be required to assist
the Company to procure such insurance, the Executive agrees that
he shall submit to such medical and other examinations, and shall
sign such applications and other instruments in writing, as may be
reasonably required by the Company and any insurance company to
which application for such insurance shall be made.
15. Notices. Notices required or permitted to be sent under
this Agreement shall be deemed effective on the earlier of receipt
or four (4) business days after being deposited in the United
States mail, postage prepaid, certified mail, return receipt
requested, to the addresses of the parties set forth below.
Company:
UniStar Communications Group, Inc.
1440 Broadway
New York, New York 10018
Attention: Nicholas J. Verbitsky
with a copy to:
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Morgan, Lewis & Bockius
101 Park Avenue
New York, New York 10178
Attention: Martin Eric Weisberg, Esq.
UniStar Communications Group, Inc.
660 Southpointe Court, Suite 300
Colorado Springs, C0 80906
Executive:
William J. Hogan
UniStar Communications Group, Inc.
1440 Broadway
New York, New York 10018
or to such other person or address as any party may hereafter
designate by notice as provided in this Section 15.
16. Severability. The invalidity or unenforceability of any
term or provision of this Agreement shall not affect the validity
or enforceability of the remaining terms or provisions of this
Agreement which shall remain in full force and effect and any such
invalid or unenforceable term or provision shall be given full
effect as far as possible.
17. Binding Effect. This Agreement is not assignable by either
party except that it shall inure to the benefit of and be binding
upon any successor to the Company by merger or consolidation or
the acquisition of all or substantially all of the Company's
assets provided that such successor assumes all of the obligations
of the Company, and shall inure to the benefit of the heirs and
legal representatives of the Executive.
18. No Implied Waiver. Failure to insist upon strict compliance
with any provision hereof shall not be a waiver of such provision
or any other provision hereof. Furthermore, the waiver by either
party hereto of a breach of any provision of thing Agreement by
the other party shall not be construed to waive any subsequent
breach by such party.
19. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York
applicable to agreements made and to be performed in New York and
shall be construed and interpreted without regard to any rule or
requirement that Agreements be construed against the party causing
it to be drafted.
9
<PAGE>
<PAGE>
20. Entire Agreement: Amendment.
(a) This Agreement, upon taking effect, embodies the entire
agreement between the parties with respect to the subject matter
hereof and shall supersede all prior agreements, both written and
oral, between and among the Executive and the Company and any
predecessors of the Company concerning the Executive's employment.
(b) No provision of this Agreement may be amended or waived
except by a writing signed by the parties hereto.
21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereby have executed this
Agreement as of the day and year first above written.
COMPANY:
UNISTAR COMMUNICATIONS GROUP, INC.
By N.J. VERBITSKY
Name: N.J. Verbitsky
Title: Co-Chairman/CEO
UNISTAR RADIO NETWORKS, INC.
By N.J. VERBITSKY
Name: N.J. Verbitsky
Title: Co-Chairman/CEO
EXECUTIVE:
By WILLIAM J. HOGAN
William H. Hogan
<PAGE>
<PAGE>
<PAGE>
WESTWOOD ONE, INC.
and
SUBSIDIARY GUARANTORS
_____________________________
CREDIT AGREEMENT
Dated as of February 1, 1994
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent,
and
BANK OF MONTREAL
and
THE FIRST NATIONAL BANK
OF BOSTON,
as Co-Agents<PAGE>
PAGE
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
____
<S> <C>
Section 1. Definitions and Accounting Matters . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . 28
1.03 Types and Series of Loans and Commitments . . . . 29
Section 2. Commitments . . . . . . . . . . . . . . . . . . . 30
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . 30
2.02 Borrowings . . . . . . . . . . . . . . . . . . . 30
2.03 Changes of Commitments . . . . . . . . . . . . . 31
2.04 Commitment Fee . . . . . . . . . . . . . . . . . 32
2.05 Lending Offices . . . . . . . . . . . . . . . . . 32
2.06 Several Obligations; Remedies Independent . . . . 32
2.07 Notes . . . . . . . . . . . . . . . . . . . . . . 33
2.08 Conversions or Continuations of Loans . . . . . . 33
Section 3. Payments of Principal and Interest . . . . . . . 34
3.01 Repayment of Loans . . . . . . . . . . . . . . . 34
3.02 Interest . . . . . . . . . . . . . . . . . . . . 35
3.03 Optional Prepayments . . . . . . . . . . . . . . 36
3.04 Mandatory Prepayments . . . . . . . . . . . . . . 37
Section 4. Payments; Pro Rata Treatment;
Computations; Etc. . . . . . . . . . . . . . . 39
4.01 Payments . . . . . . . . . . . . . . . . . . . . 39
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . 40
4.03 Computations . . . . . . . . . . . . . . . . . . 41
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . 41
4.05 Certain Notices . . . . . . . . . . . . . . . . . 42
4.06 Non-Receipt of Funds by the Administrative
Agent . . . . . . . . . . . . . . . . . . . . . 43
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . 43
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . 46
5.01 Additional Costs . . . . . . . . . . . . . . . . 46
5.02 Limitation on Eurodollar Loans . . . . . . . . . 49
5.03 Illegality . . . . . . . . . . . . . . . . . . . 50
5.04 Treatment of Affected Loans . . . . . . . . . . . 50
5.05 Compensation . . . . . . . . . . . . . . . . . . 51
5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . 52
Section 6. Conditions Precedent . . . . . . . . . . . . . . 56<PAGE>
<PAGE>
6.01 Term Loans . . . . . . . . . . . . . . . . . . . 56
6.02 Initial Revolving Credit Loans . . . . . . . . . 60
6.03 Initial and Subsequent Loans . . . . . . . . . . 60
Section 7. Representations and Warranties . . . . . . . . . 61
7.01 Corporate Existence . . . . . . . . . . . . . . . 61
7.02 Financial Condition . . . . . . . . . . . . . . . 61
(ii)<PAGE>
<PAGE>
Page
____
7.03 Litigation . . . . . . . . . . . . . . . . . . . 62
7.04 No Breach . . . . . . . . . . . . . . . . . . . . 62
7.05 Action . . . . . . . . . . . . . . . . . . . . . 62
7.06 Approvals . . . . . . . . . . . . . . . . . . . . 63
7.07 Use of Loans . . . . . . . . . . . . . . . . . . 63
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . 63
7.09 Investment Company Act . . . . . . . . . . . . . 63
7.10 Public Utility Holding Company Act . . . . . . . 64
7.11 Material Agreements . . . . . . . . . . . . . . . 64
7.12 Environmental Laws . . . . . . . . . . . . . . . 64
7.13 Subsidiaries, Etc. . . . . . . . . . . . . . . . 65
7.14 Assets of the Company . . . . . . . . . . . . . . 65
7.15 Agreements . . . . . . . . . . . . . . . . . . . 65
7.16 Solvency . . . . . . . . . . . . . . . . . . . . 65
7.17 Security Documents . . . . . . . . . . . . . . . 66
7.18 Certain Representations included in
Unistar/Infinity Transaction Documents. . . . . 66
7.19 Senior Indebtedness . . . . . . . . . . . . . . . 66
7.20 Disclosure. . . . . . . . . . . . . . . . . . . . 66
7.21 Certain Documents . . . . . . . . . . . . . . . . 67
Section 8. Covenants of the Company . . . . . . . . . . . . 67
8.01 Financial Statements . . . . . . . . . . . . . . 67
8.02 Litigation . . . . . . . . . . . . . . . . . . . 71
8.03 Existence, Etc. . . . . . . . . . . . . . . . . . 72
8.04 Insurance . . . . . . . . . . . . . . . . . . . . 72
8.05 Capital Expenditures . . . . . . . . . . . . . . 72
8.06 Liens . . . . . . . . . . . . . . . . . . . . . . 73
8.07 Indebtedness, Etc. . . . . . . . . . . . . . . . 73
8.08 Investments and Joint Ventures . . . . . . . . . 74
8.09 Restricted Payments . . . . . . . . . . . . . . . 75
8.10 Debt Ratios . . . . . . . . . . . . . . . . . . . 77
8.11 Total Interest Coverage Ratio; Total Pro
Forma Debt Service Coverage Ratio . . . . . . . 78
8.12 Prohibition of Fundamental Changes . . . . . . . 78
8.13 Interest Rate Protection Agreements . . . . . . . 80
8.14 Sale or Discount of Receivables . . . . . . . . . 80
8.15 Lines of Business . . . . . . . . . . . . . . . . 80
8.16 Transactions With Affiliates . . . . . . . . . . 80
8.17 Use of Proceeds . . . . . . . . . . . . . . . . . 81
8.18 Certain Obligations Respecting Subsidiaries . . . 81
8.19 Modifications of Certain Documents;
Subordinated Debt . . . . . . . . . . . . . . . 82<PAGE>
<PAGE>
Section 9. Guarantee . . . . . . . . . . . . . . . . . . . . 82
9.01 Guarantee . . . . . . . . . . . . . . . . . . . . 83
9.02 Obligations Unconditional . . . . . . . . . . . . 83
9.03 Reinstatement . . . . . . . . . . . . . . . . . . 84
9.04 Subrogation . . . . . . . . . . . . . . . . . . . 85
9.05 Remedies . . . . . . . . . . . . . . . . . . . . 85
9.06 Continuing Guarantee . . . . . . . . . . . . . . 85
(iii)<PAGE>
<PAGE>
Page
____
9.07 Rights of Contribution . . . . . . . . . . . . . 85
9.08 Limitation on Subsidiary Obligor Obligations . . 86
Section 10. Events of Default . . . . . . . . . . . . . . . 86
Section 11. The Agents . . . . . . . . . . . . . . . . . . . 91
11.01 Appointment, Powers and Immunities . . . . . . . 91
11.02 Reliance by Each Agent . . . . . . . . . . . . . 92
11.03 Defaults . . . . . . . . . . . . . . . . . . . . 93
11.04 Rights as a Bank . . . . . . . . . . . . . . . . 93
11.05 Indemnification . . . . . . . . . . . . . . . . 94
11.06 Non-Reliance on Agents and Other Banks . . . . . 94
11.07 Failure to Act . . . . . . . . . . . . . . . . . 95
11.08 Resignation or Removal of Agents . . . . . . . . 95
11.09 Collateral Sub-Agents . . . . . . . . . . . . . 96
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . 96
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . 96
12.02 Notices . . . . . . . . . . . . . . . . . . . . 96
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . 97
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . 98
12.05 Successors and Assigns . . . . . . . . . . . . . 99
12.06 Bank Assignments and Participations . . . . . . 100
12.07 Survival . . . . . . . . . . . . . . . . . . . . 102
12.08 Captions . . . . . . . . . . . . . . . . . . . . 102
12.09 Counterparts . . . . . . . . . . . . . . . . . . 103
12.10 Governing Law; Submission to Jurisdiction . . . 103
12.11 Waiver of Jury Trial . . . . . . . . . . . . . . 103
12.12 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . 103
12.13 Senior Indebtedness . . . . . . . . . . . . . . 104
SCHEDULE I - Banks and Commitments
SCHEDULE II - Permitted Liens
SCHEDULE III - Material Agreements
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Litigation
SCHEDULE VI - Conflicts with Certain Agreements
SCHEDULE VII - Scheduled Cost Savings
EXHIBIT A-1 - Form of Term Loan Note
EXHIBIT A-2 - Form of Revolving Credit Note
EXHIBIT B - Form of Security Agreement<PAGE>
<PAGE>
EXHIBIT C - Form of Opinion of Counsel to the Obligors
EXHIBIT D - Form of Opinion of Special Counsel to the
Obligors
EXHIBIT E - Form of Opinion of Special New York Counsel to
Chase
EXHIBIT F - Form of Confidentiality Agreement
EXHIBIT G - Form of Borrowing Notice
</TABLE>
(iv) <PAGE>
<PAGE>
CREDIT AGREEMENT dated as of February 1, 1994, between:
WESTWOOD ONE, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (together with
its successors and assigns, the "Company"); each of the
Subsidiaries of the Company identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereof
(individually, together with its successors and assigns, a
"Subsidiary Guarantor" and, together with the Company, the
"Obligors"); each of the lenders identified under the caption
"BANKS" on the signature pages hereof or which, pursuant to
Section 12.06(a) hereof, shall become a "Bank" hereunder
(individually, a "Bank" and, collectively, the "Banks"); THE
CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as administrative agent for the Banks (in such
capacity, together with its successors in such capacity, the
"Administrative Agent"); THE FIRST NATIONAL BANK OF BOSTON, a
national banking association, and BANK OF MONTREAL, a bank
organized under the laws of Canada, as co-agents for the Banks
(in such capacity, together with their respective successors in
such capacity, the "Co-Agents" and, together with the
Administrative Agent, the "Agents").
The Company has requested the Banks to make loans to
the Company in an aggregate principal amount not exceeding
$125,000,000 at any one time outstanding to finance the Unistar
Acquisition (as such term is defined in Section 1.01 hereof),
the repayment of the Retained Unistar Debt (as so defined), the
payment of certain related fees and expenses, and the working
capital requirements of the Company and its Subsidiaries.
The Obligors, the Banks and the Agents are entering
into this Agreement pursuant to which the Banks will make such
loans to the Company, and each Subsidiary Guarantor will
guarantee the loans so made to the Company, and the Obligors
will execute and deliver a security agreement and related
documents providing for security interests and liens to be
granted to the Banks and the Agents hereunder. Accordingly, the
parties hereto hereby agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms<PAGE>
<PAGE>
defined in this Section 1.01 or in other provisions of this <PAGE>
<PAGE>
- 2 -
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Acquisition" shall mean any transaction, or any series
of related transactions, consummated after the date of this
Agreement (other than the Unistar Acquisition), by which the
Company and/or any of its Subsidiaries directly or indirectly
acquires (whether through purchase of assets, merger or
otherwise) (a) all or any substantial part of any ongoing
business or all or all or any substantial part of the assets of
any corporation, partnership or other entity or of any division
of any entity, (b) control of at least a majority (in number of
votes) of the securities of a corporation which have ordinary
voting power for the election of directors or (c) control of a
majority ownership interest in any partnership or other entity.
The terms "Acquire" and "Acquired" used as a verb shall have a
correlative meaning. For purposes hereof, the "amount" of an
Acquisition shall be equal to the aggregate amount of cash and
the fair market value of all non-cash consideration paid or
delivered by the Company and its Subsidiaries in connection
therewith.
"Adjusted Pro Forma Operating Cash Flow" shall mean (a)
Operating Cash Flow for the Company for the Fiscal Year ended
November 30, 1993 (calculated as if the cost savings described
in Schedule VII hereto had been achieved during such Fiscal
Year) plus (b) Operating Cash Flow for Unistar for the fiscal
year of Unistar ended December 31, 1993.
"Affiliate" shall mean any Person which directly or
indirectly controls, or is under common control with, or is
controlled by, the Company and, if such Person is an individual,
any member of the immediate family (including parents, spouse
and children) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such
member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person which owns
directly or indirectly 5% or more of the securities having <PAGE>
<PAGE>
- 3 -
ordinary voting power for the election of directors or other
governing body of a corporation or 5% or more of the partnership
or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to
control such corporation or other Person. Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate
solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries and the
Company and its Subsidiaries shall not be deemed to be
Affiliates of each other.
"Agreement" shall mean this Credit Agreement, as the
same shall be modified and supplemented and in effect from time
to time, and the words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement unless otherwise specified.
"Applicable Lending Office" shall mean, for each Bank
and for each type of Loan, the "Lending Office" of such Bank (or
of an affiliate of such Bank) designated for such type of Loan
on the signature pages hereof or such other office of such Bank
(or of an affiliate of such Bank) as such Bank may from time to
time specify to the Administrative Agent and the Company as the
office by which its Loans of such type are to be made and
maintained.
"Applicable Margin" shall mean:
(a) with respect to Base Rate Loans, 1.50% at all
times when the Total Debt Ratio is greater than 5.00 to 1,
1.00% at all times when the Total Debt Ratio is greater than
4.00 to 1 and less than or equal to 5.00 to 1, and 0.50% at
all times when the Total Debt Ratio is less than or equal to
4.00 to 1; and
(b) with respect to Eurodollar Loans, 2.50% at all
times when the Total Debt Ratio is greater than 5.00 to 1,
2.00% at all times when the Total Debt Ratio is greater than
4.00 to 1 and less than or equal to 5.00 to 1, and 1.50% at
all times when the Total Debt Ratio is less than or equal to
4.00 to 1.
For purposes of this definition, the Total Debt Ratio shall be <PAGE>
<PAGE>
determined (i) for any day during the period commencing on the
Closing Date and ending on the second Business Day after the <PAGE>
<PAGE>
- 4 -
first date the Company delivers consolidated financial statements
of the Company pursuant to either Section 8.01(a) or 8.01(b)
hereof on the basis of the most recent consolidated financial
statements of the Company referred to in Section 7.02 hereof, and
(ii) for any day thereafter on the basis of the then most recent
consolidated financial statements of the Company delivered
pursuant to said Section 8.01(a) or 8.01(b), and any change in
the Applicable Margin as a result of a change in the Total Debt
Ratio shall be effective as of the second Business Day following
the date the relevant financial statements of the Company are
delivered pursuant to said Section 8.01(a) or 8.01(b) to the
Administrative Agent, provided that in the event that Company
shall fail to deliver any consolidated financial statements by
the respective date required pursuant to said Sections 8.01(a)
and 8.01(b), the Total Debt Ratio then in effect shall continue
to be in effect until the second Business Day following the date
such financial statements are in fact delivered.
"Bailee Agreements" shall have the meaning assigned to
such term in Section 6.01(o) hereof.
"Base Rate" shall mean, for any day, the higher of
(a) the Federal Funds Rate for such day plus 1/4 of 1% and
(b) the Prime Rate for such day. Each change in any interest
rate provided for herein based upon the Base Rate resulting from
a change in the Base Rate shall take effect at the time of such
change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest
at rates based upon the Base Rate.
"Basic Documents" shall mean, collectively, this
Agreement, the Notes and the Security Documents.
"Business Day" shall mean any day on which commercial
banks are not authorized or required to close in New York City
and, if such day relates to a borrowing of, a payment or prepay-
ment of principal of or interest on, or a Continuance of or a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Continuance, Conversion or
Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market. <PAGE>
<PAGE>
- 5 -
"Capital Expenditures" shall mean, for any period,
expenditures (including the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or
any of its Subsidiaries to acquire or construct fixed assets,
plant and equipment (including renewals, improvements and
replacements, but excluding repairs) during such period computed
in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person,
the obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to use)
real and/or personal Property which obligations are required to
be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Chase" shall mean The Chase Manhattan Bank (National
Association).
"Class Action Warrants" shall mean the warrants
outstanding as of the date hereof (not in excess of 3,000,000 in
number), each exercisable by the holder thereof to purchase one
share of the common stock of the Company at a price of $17.25
per share, as in effect from time to time.
"Closing Date" shall mean the date upon which the Term
Loans are made hereunder.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Collateral" shall mean the "Collateral" under and as
defined in the Security Agreement.
"Commitment Termination Date" shall mean the Quarterly
Date falling on or nearest to November 30, 2001.
"Commitments" shall mean, collectively, the Term Loan
Commitments and the Revolving Credit Commitments.
<PAGE>
<PAGE>
"Consolidated Subsidiary" shall mean, for any Person,
each Subsidiary of such Person (whether now existing or hereafter
created or Acquired) the financial statements of which are (or <PAGE>
<PAGE>
- 6 -
are required to be) consolidated with the financial statements of
such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.08 hereof of a
Eurodollar Loan from one Interest Period for such Loan to the
next Interest Period for such Loan.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.08 hereof of Base Rate Loans
into Eurodollar Loans or of Eurodollar Loans into Base Rate
Loans, which may be accompanied by the transfer by a Bank (at
its sole discretion) of a Loan from one Applicable Lending
Office to another.
"Default" shall mean an Event of Default or an event
which with notice or lapse of time or both would become an Event
of Default.
"Deferred Programming Expense" shall mean, for any
period, costs of the Company and its Subsidiaries incurred during
such period in connection with the development of new
programming, which costs are deferred and amortized by the
Company and its Subsidiaries.
"Disposition" shall mean any sale, assignment, transfer
or other disposition (including, without limitation, the transfer
of all or a substantial part of its rights by means of an
exclusive license or sublicense) of any Property (whether now
owned or hereafter acquired) by the Company or any of its
Subsidiaries to any other Person, excluding the granting of Liens
under and other dispositions by the Company or such Subsidiary
pursuant to the Security Agreement. The terms "Dispose" and
"Disposed" used as a verb shall have a correlative meaning.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all Federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental<PAGE>
<PAGE>
restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, <PAGE>
<PAGE>
- 7 -
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes.
"Equity Issuance" shall mean (a) any issuance or sale
by the Company or any of its Subsidiaries after the date hereof
of (i) any capital stock or other ownership interests in the
Company or any Subsidiary or (ii) any Equity Rights therefor or
(b) the receipt by the Company or any of its Subsidiaries after
the date hereof of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such
contribution); provided that Equity Issuance shall not include
(v) any such issuance or sale by any Subsidiary of the Company to
the Company or any Wholly Owned Subsidiary of the Company,
(w) any capital contribution by the Company or any Wholly Owned
Subsidiary of the Company to any Subsidiary of the Company,
(x) any such issuance upon the exercise of the Initial Warrant or
the Incentive Warrants, any other such issuance pursuant to the
Securities Purchase Agreement, or the conversion rights provided
for by the 9% Debenture Indenture and the 6-3/4% Debenture
Indenture, (y) any such issuance or sale to directors, officers
or employees of the issuing or selling Person as compensation for
services rendered to such Person or any Subsidiary of such
Person, or (z) any such issuance to a Person as consideration for
the sale by such Person of any Property to the Company or any of
its Subsidiaries pursuant to an Acquisition permitted by
Section 8.12(b)(ii) hereof.
"Equity Rights" shall mean, with respect to the Company
or any of its Subsidiaries, any outstanding subscriptions,
options, warrants, commitments, preemptive rights or agreements
of any kind for the issuance, sale, purchase, or registration of
any shares of any class of capital stock or any other ownership
interests in the Company or such Subsidiary (as the case may be);
provided that Equity Rights shall not include the Initial
Warrant, the Incentive Warrants, the conversion rights provided
for by the 9% Debenture Indenture and the 6-3/4% Debenture
Indenture or the registration rights provided for by the
Registration Rights Agreement. <PAGE>
<PAGE>
- 8 -
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code)
as the Company or is under common control (within the meaning of
Section 414(c) of the Code) with the Company.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean, as determined by the Administrative Agent, of the rates
per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) quoted by the respective Reference Banks at approximately
11:00 a.m. London time (or as soon thereafter as practicable) on
the date two Business Days prior to the first day of such
Interest Period for the offering by the respective Reference
Banks to leading banks in the London interbank market of Dollar
deposits having a term comparable to such Interest Period and in
an amount equal to $5,000,000.
"Eurodollar Loans" shall mean Loans that bear interest
at rates based upon rates referred to in the definition of
"Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Administrative Agent to be equal to the quotient of (a) the
Eurodollar Base Rate for such Loan for such Interest Period
divided by (b) the result of 1 minus the Reserve Requirement (if
any) for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to
such term in Section 10 hereof.
"Existing Credit Agreement" shall mean the Loan and
Security Agreement dated as of November 15, 1993 by and between
the Company, various of its Subsidiaries and Foothill Capital
Corporation, as the same shall be modified and supplemented and
in effect from time to time.<PAGE>
<PAGE>
"Excess Cash Flow" shall mean, for any Fiscal Year, the
amount (if any) by which (a) Operating Cash Flow for such Fiscal<PAGE>
<PAGE>
- 9 -
Year exceeds (b) the sum of (i) Total Debt Service for such
Fiscal Year plus (ii) the aggregate amount of Capital
Expenditures made by the Company and its Subsidiaries during such
Fiscal Year made as permitted by Section 8.05 hereof plus (iii)
the excess (if any) of Working Investment for the Company and its
Consolidated Subsidiaries as at the end of such Fiscal Year over
Working Investment for the Company and its Consolidated
Subsidiaries as at the end of the prior Fiscal Year (or, minus
the excess (if any) of Working Investment for the Company and its
Consolidated Subsidiaries as at the end of the prior Fiscal Year
over Working Investment for the Company and its Consolidated
Subsidiaries as at the end of such Fiscal Year) plus (iv) the
aggregate amount of Management Fees paid during such Fiscal Year
plus (v) federal, state and local taxes actually paid by the
Company and its Subsidiaries during such Fiscal Year plus
(vi) $2,000,000 plus (vii) the amount of Restructuring Expenses
(up to but not exceeding $8,700,000 in the aggregate) deducted in
determining Operating Cash Flow for such Fiscal Year.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day, and (b) if such rate is not
so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to Chase on such day on such
transactions as determined by the Administrative Agent.
"Fiscal Year" shall mean a fiscal year of the Company.
"Fixed Charges Ratio" shall mean, as at any date of
determination thereof, the ratio of (a) Operating Cash Flow for
the period of four fiscal quarters of the Company ended on, or
most recently ended prior to, such date to (b) the sum of (i)
Capital Expenditures made during such period plus (ii) Management
Fees paid during such period plus (iii) the sum of all principal
payments scheduled to be made during such period plus Total
Interest for such period. <PAGE>
<PAGE>
- 10 -
"GAAP" shall mean generally accepted accounting
principles applied on a basis consistent with those which, in
accordance with Section 1.02(a) hereof, are to be used in making
the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarilyfor
the purpose of enabling a debtor to make payment of his, her or
its obligations or an agreement to assure a creditor against
loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used
as a verb shall have a correlative meaning.
"Guaranteed Obligations" shall have the meaning
assigned to such term in Section 9.01 hereof.
"Hazardous Material" shall mean, collectively, any oil
hazardous waste, hazardous material or hazardous substance as
defined in the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6921 et seq., the Comprehensive
Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq., or any other Federal or
State Environmental Law.
"Incentive Warrants" shall mean the Stock Incentive
Option as defined in the Management Agreement (comprising three
warrants each for 500,000 shares of the Company's common stock)
to be issued to INI pursuant to the Management Agreement, as the
same shall be modified and in effect from time to time.
"Indebtedness" shall mean, as to any Person, without<PAGE>
<PAGE>
duplication: (a) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes or similar<PAGE>
<PAGE>
- 11 -
instruments (including, without limitation, obligations under
agreements not to compete and Interest Rate Protection
Agreements); (b) all obligations of such Person for the deferred
purchase price of property or services (including without
limitation obligations under agreements not to compete), except
trade accounts payable and accrued liabilities arising in the
ordinary course of business which are not overdue by more than
60 days or which are being contested in good faith byappropriate
proceedings; (c) all Capital Lease Obligations of such Person;
(d) all Indebtedness of others secured by a Lien on any
properties, assets or revenues of such Person; (e) all
Indebtedness of others Guaranteed by such Person; and (f) all
obligations of such Person, contingent or otherwise, in respect
of letters of credit or bankers' acceptances or similar
instruments; provided, that the indebtedness of the Companyunder
the 9% Debentures and the 9% Debenture Indenture shall not
constitute "Indebtedness" hereunder.
"Infinity" shall mean Infinity Broadcasting
Corporation, a Delaware corporation.
"INI" shall mean (a) Infinity Network Inc., a Delaware
corporation that, on the date hereof, is a Wholly Owned
Subsidiary of Infinity, or (b) any other Wholly Owned Subsidiary
of Infinity which owns capital stock or other ownershipinterests
of the Company; provided that Infinity shall have notified the
Administrative Agent of the name of such other Subsidiary and
the amount of such ownership interests owned by it.
"Initial Warrant" shall mean the Warrant to be issued
to INI pursuant to, and as defined in, the Securities Purchase
Agreement.
"Interest Period" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan orthe
last day of the immediately preceding Interest Period for such
Loan and ending on the numerically corresponding day in the
first, second, third, sixth or (in respect of any such Loan of a
particular series, with the approval of all of the Banks holding
Loans and/or Commitments of such series) twelfth calendar month
thereafter, as the Company may select as provided in Section
4.05 hereof, except that each Interest Period which commences
on the<PAGE>
<PAGE>
last Business Day of a calendar month (or on any day for which <PAGE>
<PAGE>
- 12 -
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of
the appropriate subsequent calendar month. Notwithstanding the
foregoing: (a) no Interest Period for any Term Loan may commence
before and end after any Principal Payment Date unless, after
giving effect thereto, the aggregate principal amount of the Term
Loans having Interest Periods which end after such Principal
Payment Date shall be equal to or less than the aggregate
principal amount of the Term Loans scheduled to be outstanding
after giving effect to the payments of principal of such Loans
required to be made on such Principal Payment Date; (b) no
Interest Period for any Revolving Credit Loan may end after the
Commitment Termination Date; (c) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on
the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the
immediately preceding Business Day); and (d) notwithstanding
clause (a) and (b) above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for
any Eurodollar Loan would otherwise be a shorter period, such
Loan shall not be available as a Eurodollar Loan hereunder.
"Interest Rate Protection Agreement" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and a financial
institution providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of
any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property fromanother
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory,
supplies, goods, services or advertising sold in the ordinary
course of business); or (c) the entering into of any Guarantee<PAGE>
<PAGE>
- 13 -
of, or other contingent obligation with respect to, Indebtedness
or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such
Person.
"Joint Venture" shall mean a joint venture, partnership
or other similar arrangement, whether in corporate, partnership
or other legal form; provided that, no such entity that is a
Subsidiary of any Person shall be considered to be a Joint
Venture to which such Person is a party.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property. For purposes of this
Agreement, the Company or any of its Subsidiaries shall be
deemed to own subject to a Lien any Property which it has
acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other
title retention agreement (other than an operating lease)
relating to such Property.
"Loans" shall mean, collectively, Term Loans and
Revolving Credit Loans.
"Majority Banks" shall mean the Majority Term Loan
Banks and Majority Revolving Credit Banks.
"Majority Revolving Credit Banks" shall mean, at any
time, Revolving Credit Banks holding at least 66-2/3% of the sum
of (a) the aggregate outstanding principal amount of the
Revolving Credit Loans and (b) if the Revolving Credit Commit-
ments are then in effect, the aggregate unused amount of
Revolving Credit Commitments.
"Majority Term Loan Banks" shall mean, at any time,
Term Loan Banks having at least 66-2/3% of the aggregate amount
of the Term Loan Commitments (or, if the Term Loan Commitments
have terminated, the aggregate outstanding principal amount of
the Term Loans).
"Management Agreement" shall mean a Management<PAGE>
<PAGE>
Agreement between the Company and Infinity in substantially the
form of Exhibit A to the Stock Purchase Agreement, as the same <PAGE>
<PAGE>
- 14 -
shall be modified and supplemented and in effect from time to
time.
"Management Fees" shall mean, for any period, fees and
cash incentive bonuses payable to Infinity under the Management
Agreement during such period for administrative, management and
other services performed for the Company and its Subsidiaries.
"Management Services Subordination Agreement" shall
mean a subordination agreement, in form and substance
satisfactory to the Administrative Agent, between Infinity, the
Company and the Administrative Agent providing for the
subordination of the Management Fees to all amounts owing to the
Banks and the Administrative Agent hereunder and under the other
Basic Documents, as the same shall be modified and supplemented
and in effect from time to time.
"Margin Stock" shall mean margin stock within the
meaning of Regulation U and Regulation X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, liabilities or capitalization of the Company and its
Subsidiaries taken as a whole, (b) the ability of any Obligor to
perform its obligations under any of the Basic Documents to
which it is a party, (c) the validity or enforceability of any
of the Basic Documents, (d) the rights and remedies of any of
the Banks and the Agents under any of the Basic Documents or (e)
the timely payment of any principal of or interest on the Loans
or any other amounts payable in connection therewith.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and which
is covered by Title IV of ERISA.
"9% Debenture Indenture" shall mean the Indenture dated
as of December 15, 1990 between the Company and The Bank of New
York, as Trustee, providing for the 9% Debentures, as the same
shall be modified and supplemented and in effect from time to
time.<PAGE>
<PAGE>
"9% Debentures" shall mean the 9% Convertible Senior
Subordinated Debentures Due 2002 of the Company, as the same<PAGE>
<PAGE>
- 15 -
shall be modified and supplemented and in effect from time to
time.
"Notes" shall mean Term Loan Notes and Revolving Credit
Notes.
"Operating Cash Flow" shall mean, for any period for
any Person, the sum, for such Person and its Subsidiaries, of the
following (determined on a consolidated basis without duplication
in accordance with GAAP, except as otherwise specified below):
(a) net revenues of such Person and its Subsidiaries for such
period (excluding (i) any net gain or loss arising from the sale
of capital assets during such period; (ii) any gain arising from
any write-up of assets during such period; (iii) net earnings for
such period of any other Person in which such Person or any of
its Subsidiaries has an ownership interest unless such net
earnings shall have actually been received by such Person or such
Subsidiary in the form of cash distributions; (iv) any portion of
the net earnings of any Subsidiary of such Person for such period
which for any reason is unavailable for payment of dividends to
such Person or any other such Subsidiary; (v) any gain realized
during such period arising from the acquisition of any securities
of such Person or any of its Subsidiaries; (vi) any "extra-
ordinary earnings" or "extraordinary losses" for such period as
such terms are interpreted under GAAP; and (vii) any interest
income of such Person and its Subsidiaries realized during such
period); minus (b) operating expenses of such Person for such
Period, including, without limitation, capitalized programming
expenses, capitalized station affiliation agreement costs and,
with respect to the Company, all out-of-pocket expenses payable
to Infinity pursuant to Section 1.6 of the Management Agreement,
but excluding (i) depreciation, amortization (including, without
limitation, amortization of Deferred Programming Expenses), and
other non-cash charges accrued for such period by such Person and
its Subsidiaries, and (ii) with respect to the Company for any
period ending on or prior to November 30, 1994, the amount of
Restructuring Expenses (up to but not exceeding $8,700,000 in the
aggregate) incurred during such period to the extent such
Restructuring Expenses were included in determining operating
expenses for such period); provided that:
(1) for purposes hereof (other than for purposes of<PAGE>
<PAGE>
computing the Total Debt Ratio for determinations of the
Applicable Margin), Operating Cash Flow (W) for the period<PAGE>
<PAGE>
- 16 -
of four fiscal quarters of the Company ending February 28,
1994 shall be increased by $5,300,000; (X) for the period of
four fiscal quarters of the Company ending May 31, 1994
shall be increased by $3,975,000; (Y) for the period of four
fiscal quarters of the Company ending August 31, 1994 shall
be increased by $2,650,000; and (Z) for the period of four
fiscal quarters of the Company ending November 30, 1994
shall be increased by $1,325,000;
(2) for purposes of computing the Total Interest
Coverage Ratio and the Fixed Charges Ratio for any period,
Operating Cash Flow of the Company and its Subsidiaries for
such period shall be calculated after taxes; and
(3) for purposes of computing the Senior Debt Ratio and
the Total Debt Ratio for any period, Operating Cash Flow of
the Company and its Subsidiaries for such period shall be
calculated before taxes.
"Other Pro Forma Interest" shall mean, for any period,
an aggregate amount equal to interest for such period on an
amount equal to the outstanding principal amount of Indebtedness
referred to in Section 8.07(a)(v) hereof outstanding on the day
immediately preceding such period at the respective rate per
annum equal to the rate specified in the applicable instrument
evidencing or governing the related series of Indebtedness;
provided that interest on a floating rate basis for such period
shall be deemed to accrue on such Indebtedness at a rate per
annum equal to the rate of interest with respect to such
Indebtedness in effect on the day immediately preceding such
period.
"Payment Default" shall mean an Event of Default under
Section 10(a) hereof.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Liens" shall mean:
(a) pledges or deposits by the Company or any of its<PAGE>
<PAGE>
Subsidiaries under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith<PAGE>
<PAGE>
- 17 -
deposits in connection with bids, tenders, contracts (other
than for the payment of Indebtedness of the Company or any
of its Subsidiaries), or leases to which the Company or any
of its Subsidiaries are parties, deposits to secure public
or statutory obligations of the Company or any of its
Subsidiaries, deposits of cash or U.S. Government bonds to
secure surety or appeal bonds or performance bonds to which
the Company or any of its Subsidiaries are parties or which
are issued for their account, or deposits for the payment of
rent (provided that such deposits as security for the
payment of rent are required in the ordinary course of
business);
(b) Liens imposed by law, such as landlords',
carriers', warehousemen's, materialmen's and mechanics'
liens, or Liens arising out of judgments or awards against
the Company or any of its Subsidiaries with respect to which
the Company or such Subsidiary at the time shall currently
be prosecuting an appeal or proceedings for review in good
faith and by proper proceedings;
(c) Liens for taxes, assessments or other governmental
charges not yet subject to penalties for non-payment and
Liens for taxes, assessments or other governmental charges
the payment of which is being contested in good faith and by
appropriate proceedings and for which adequate reserves,
determined in accordance with GAAP, are being maintained;
(d) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for,
rights of way, highways and railroad crossings, sewers,
electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the
use of real properties or other Liens incidental to the
conduct of the business of the Company or any of its
Subsidiaries or to the ownership of their Property which
were not incurred in connection with Indebtedness of the
Company or any of its Subsidiaries, which Liens do not in
the aggregate materially detract from the value of said
Properties or materially impair the operation of the
business taken as a whole of the Company or such
Subsidiary;<PAGE>
<PAGE>
(e) (i) Liens created in connection with Capital Lease
Obligations of the Company or any of its Subsidiaries, <PAGE>
<PAGE>
- 18 -
provided that such Liens do not encumber any Property other than
the Property financed by the capital lease under which such
Capital Lease Obligations exist and (ii) Liens permitted by
clause (iv) of Section 8.06 hereof;
(f) existing Liens in respect of Property of the
Company or any of its Subsidiaries listed on Schedule II
hereto (excluding, however, following the making of the
initial Loans hereunder, the existing Liens securing
obligations of the Company and its Subsidiaries under the
Existing Credit Agreement);
(g) Liens created pursuant to the Security Documents;
(h) extensions, renewals, refinancings or replacements
of any Permitted Liens referred to in clauses (e) and (f)
above, provided that the principal amount of the obligation
secured thereby is not increased and that any such
extension, renewal, refinancing or replacement is limited to
the Property originally encumbered thereby.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and which is covered by Title IV of ERISA, other than a Multi-
employer Plan.
"Post-Default Rate" shall mean, in respect of the
principal of any Loan or any other amount payable by any Obligor
under this Agreement, any Note or any other Basic Document to
which it is a party, from and after the occurrence and during the
continuance of a Payment Default, a rate per annum equal to the
lesser of (a) 2% plus the Base Rate as in effect from time to
time plus the Applicable Margin for Base Rate Loans (provided
that, with respect to a Eurodollar Loan, the "Post-Default Rate"
for such principal shall be, for the period from and including<PAGE>
<PAGE>
such date of occurrence of such Payment Default to but excluding
the date upon which such Loan is Converted to a Base Rate Loan
pursuant to Section 2.08 hereof, a rate per annum equal to 2%
plus the interest rate for such Loan as provided in <PAGE>
<PAGE>
- 19 -
Section 3.02(a)(ii) hereof and, thereafter, the rate provided for
above in this definition), and (b) the maximum rate permitted by
the law of the State of New York.
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
the Administrative Agent and Chase, presently located at 1 Chase
Manhattan Plaza, New York, New York 10081.
"Principal Payment Date" shall mean each Quarterly Date
on which a principal payment in respect of Term Loans is required
to be made pursuant to Section 3.01(a) hereof.
"Pro Forma Debt Service" shall mean, for any period,
the sum of the following for such period: (a) Pro Forma Interest
for such period plus (b) the aggregate amount of payments of
principal scheduled to be made by the Company and its Subsidi-
aries in respect of Indebtedness during such period.
"Pro Forma Interest" shall mean, for any period, the
sum of the following for such period: (a) Senior Pro Forma
Interest plus (b) Subordinated Pro Forma Interest plus (c) Other
Pro Forma Interest.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible (and including, without
limitation, rights and interests in contracts and leases).
"Proxy Statement" shall mean the Proxy Statement dated
January 7, 1994 for the Special Meeting of the Shareholders of
the Company to be held on January 28, 1994, as the same shall be
modified and supplemented and in effect from time to time.
"Quarterly Dates" shall mean the last Business Day of
February, May, August and November in each year, the first of
which shall be the first such day after the date of this
Agreement. <PAGE>
<PAGE>
- 20 -
"Reference Banks" shall mean Chase, The First National
Bank of Boston and Bank of Montreal (or their Applicable Lending
Offices, as the case may be).
"Registration Rights Agreement" shall mean a
Registration Rights Agreement between the Company and INI in
substantially the form of Exhibit C to the Stock Purchase
Agreement, as the same shall be modified and supplemented and in
effect from time to time.
"Regulation D", "Regulation U" and "Regulation X" shall
mean, respectively, Regulation D, Regulation U and Regulation X
of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be amended or supplemented from time
to time.
"Regulatory Change" shall mean, with respect to any
Bank, any change after the date of this Agreement in United
States Federal, state or foreign law or regulations (including,
without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to
a class of banks including such Bank of or under any United
States Federal, state or foreign law or regulations (whether or
not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"Release" shall mean any "release" as such term is
defined in 42 U.S.C. Section 9601(22) or any successor statute.
"Reserve Requirement" shall mean, for any Interest
Period for any Eurodollar Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used
in Regulation D). Without limiting the effect of the foregoing,
Reserve Requirement shall include any other reserves required to
be maintained by such member banks by reason of any Regulatory
Change against (a) any category of liabilities which includes<PAGE>
<PAGE>
deposits by reference to which the Eurodollar Base Rate is to be
determined as provided in the definition of "Eurodollar Base <PAGE>
<PAGE>
- 21 -
Rate" in this Section 1.01 or (b) any category of extensions of
credit or other assets which includes Eurodollar Loans.
"Restricted Payments" shall mean:
(a) any declaration or payment (whether made by the
Company or any of its Subsidiaries) of dividends or other
distributions (in cash, property or obligations) on account
of any shares of any class of stock of the Company, but
excluding dividends on account of common stock of the
Company payable solely in shares of common stock of the
Company;
(b) any payment (whether made or effected by the
Company or any of its Subsidiaries, other than any payment
to the Company by any of its Subsidiaries or to any
Subsidiary of the Company by any of such Subsidiary's
Subsidiaries) on account of, or any payment (whether made or
effected by the Company or any of its Subsidiaries, other
than any payment to the Company by any of its Subsidiaries
or to any Subsidiary of the Company by any of such
Subsidiary's Subsidiaries) or the setting apart of money for
a sinking or other analogous fund for the purchase,
redemption, prepayment, retirement or other acquisition of,
any shares of any class of capital stock of the Company or
any of its Subsidiaries or any Equity Rights therefor;
(c) any payment (whether made by the Company or any of
its Subsidiaries) on account of the purchase, redemption,
prepayment, defeasance (including, but not limited to, in-
substance or legal defeasance) or other acquisition or
retirement for value of any of the Subordinated Debt; and
(d) any payment of management or similar fees
(including, without limitation, Management Fees, but
excluding all expenses payable to Infinity, in its capacity
as "Manager", under Section 1.6 of the Management Agreement)
by the Company or any of its Subsidiaries to Infinity or any
other Affiliate of the Company (other than to any employee,
officer or director of the Company or its Subsidiaries in
connection with the performance of such employee's,
officer's or director's duties in such capacity). <PAGE>
<PAGE>
- 22 -
"Restructuring Expenses" shall mean, for any period,
the aggregate amount of costs and expenses incurred by the
Company and its Subsidiaries during such period in connection
with the consummation of the Unistar Acquisition and the other
transactions contemplated by Unistar/Infinity Transaction
Documents, including, without limitation, legal expenses,
severance costs and other employee benefits, lease termination
expenses and other restructuring expenses incurred in connection
with such transactions.
"Retained Unistar Debt" shall mean the "Retained Debt",
as defined in the Proxy Statement.
"Revolving Credit Banks" shall mean (a) on the date of
this Agreement, the Banks having Revolving Credit Commitments as
specified on Schedule I hereto under the heading "Revolving
Credit Commitments" and (b) thereafter, the Banks from time to
time holding Revolving Credit Loans and, if any Revolving Credit
Commitments are then in effect, Revolving Credit Commitments
(after giving effect to any assignments thereof pursuant to
Section 12.06(a) hereof).
"Revolving Credit Commitments" shall mean, with respect
to each Revolving Credit Bank, the obligation of such Bank to
make Revolving Credit Loans in an aggregate principal amount at
any one time outstanding up to, but not exceeding (a) in the case
of a Revolving Credit Bank that is a party to this Agreement as
of the date hereof, the amount set forth opposite the name of
such Bank on Schedule I hereto under the heading "Revolving
Credit Commitments" and (b) in the case of any other Revolving
Credit Bank, the aggregate amount of the Revolving Credit
Commitments of other Revolving Credit Banks acquired by it
pursuant to Section 12.06(a) hereof (in each case, as the same
may be reduced from time to time pursuant to Section 2.03 hereof
or increased or reduced from time to time pursuant to said
Section 12.06(a)).
"Revolving Credit Loans" shall have the meaning
assigned to such term in Section 2.01(b) hereof.
"Revolving Credit Notes" shall mean the promissory
notes provided for by Section 2.07(b) hereof and all promissory
notes delivered in substitution therefor, in each case as the<PAGE>
<PAGE>
- 23 -
same shall be modified and supplemented and in effect from time
to time.
"Securities Purchase Agreement" shall mean the
Securities Purchase Agreement dated as of November 4, 1993
between the Company and INI, as the same shall be modified and
supplemented and in effect from time to time.
"Security Agreement" shall mean a Security Agreement
substantially in the form of Exhibit B hereto between the
Obligors and the Administrative Agent, as the same shall be
modified and supplemented and in effect from time to time.
"Security Documents" shall mean, collectively, the
Security Agreement, all Uniform Commercial Code financing
statements required by this Agreement or the Security Agreement
to be filed with respect to the security interests in personal
Property and fixtures created pursuant to the Security Agreement,
and the Bailee Agreements.
"Senior Debt" shall mean all Indebtedness (other than
the Subordinated Debt) of the Company and its Subsidiaries,
determined on a consolidated basis.
"Senior Debt Ratio" shall mean, as of any date of
determination thereof, the ratio of (a) Senior Debt outstanding
as of such date to (b) Operating Cash Flow for the period of four
fiscal quarters of the Company ended on, or most recently ended
prior to, such date.
"Senior Officer" shall mean (a) prior to the
consummation of the Unistar Acquisition, the Senior Vice
President - Business and Legal Affairs, and Senior Vice
President - Financial Operations of the Company, and (b)
thereafter, the Chief Executive Officer, Chief Financial Officer
and Senior Vice President - Financial Operations of the Company
and such other officers of the Company as may be designated by
its Chief Financial Officer to, and reasonably acceptable to, the
Administrative Agent.
"Senior Pro Forma Interest" shall mean, for any period,
an amount equal to interest for such period on an amount equalto<PAGE>
<PAGE>
the aggregate principal amount of Loans outstanding on the day
immediately preceding such period at a rate per annum (calculated
<PAGE>
<PAGE>
- 24 -
as provided in Section 4.03 hereof) equal to the sum of (a) the
Eurodollar Rate on the day immediately preceding such period that
would be applicable to Loans that are Eurodollar Loans hereunder
for an Interest Period commencing on such date and having a term
of three months plus (b) the Applicable Margin for Loans that are
Eurodollar Loans on the day immediately preceding such period;
provided that such rate per annum shall not exceed, for any
amount of the Loans as to which the Company has capped the
interest rate thereon by entering into an Interest Rate
Protection Agreement as to a notional amount equal to such amount
of the Loans that is in effect on the day immediately preceding
such period, a rate per annum equal to the capped rate provided
for in such Interest Rate Protection Agreement (but, if such
Interest Rate Protection Agreement is scheduled to terminate
prior to the end of such period, only for that part of such
period prior to the scheduled date of termination) appropriately
adjusted to reflect fees and other costs payable by the Company
under such Interest Rate Protection Agreement to the extent
allocable to such period (or part thereof).
"series" shall have the meaning assigned to such term
in Section 1.03 hereof.
"6-3/4 Debenture Indenture" shall mean the Indenture
dated as of October 15, 1986 between the Company and Security
Pacific National Bank, as Trustee, providing for the 6-3/4%
Debentures, as the same be modified and supplemented and in
effect from time to time.
"6-3/4% Debentures" shall mean the 6-3/4% Convertible
Subordinated Debentures Due 2011 of the Company, as the same
shall be modified and supplemented and in effect from time to
time.
"Stock Collateral" shall mean the "Stock Collateral"
under and as defined in the Security Agreement.
"Stock Purchase Agreement" shall mean the Stock
Purchase Agreement dated as of November 4, 1993 among UCGI,
Unistar, Infinity and the Company, as the same shall be modified
and supplemented and in effect from time to time. <PAGE>
<PAGE>
- 25 -
"Subordinated Debt" shall mean the Indebtedness of the
Company in respect of the 6-3/4% Debentures and the indebtedness
of the Company in respect of the 9% Debentures.
"Subordinated Debt Documents" shall mean the 6-3/4%
Debentures, the 6-3/4% Debenture Indenture, the 9% Debentures and
the 9% Debenture Indenture.
"Subordinated Pro Forma Interest" shall mean, for any
period, an amount equal to the interest for such period on an
amount equal to the aggregate principal amount of the 6-3/4%
Debentures outstanding on the day immediately preceding such
period at a rate per annum (calculated as provided in the 6-3/4%
Debenture Indenture) equal to 6-3/4%.
"Subsidiary" shall mean, for any Person, any corpora-
tion, partnership or other entity of which at least a majority of
the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether
or not at the time securities or other ownership interests of any
other class or classes of such corporation, partnership or other
entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person. "Wholly Owned Subsidiary" shall
mean, for any Person, any such corporation, partnership or other
entity of which all of the securities or other ownership
interests (other than, in the case of a corporation, directors'
qualifying shares) are so owned or controlled.
"Term Loan Banks" shall mean (a) on the date of this
Agreement, the Banks having Term Loan Commitments as specified on
Schedule I hereto under the heading "Term Loan Banks" and
(b) thereafter, the Banks from time to time holding Term Loans
or, if the Term Loan Commitments are then in effect, Term Loan
Commitments (after giving effect to any assignments thereof
pursuant to Section 12.06(a) hereof).
"Term Loan Commitment" shall mean, as to each Term Loan
Bank, the obligation of such Bank to make Term Loans in an<PAGE>
<PAGE>
aggregate principal amount at any one time outstanding up to but <PAGE>
<PAGE>
- 26 -
not exceeding (a) in the case of a Term Loan Bank that is a party
to this Agreement as of the date hereof, the amount set forth
opposite the name of such Bank on Schedule I hereto under the
heading "Term Loan Commitments" and (b) in the case of any other
Term Loan Bank, the aggregate amount of the Term Loan Commitments
of other Term Loan Banks acquired by it pursuant to
Section 12.06(a) hereof (in each case, as the same may be reduced
from time to time pursuant to Section 2.03 hereof or increased or
reduced from time to time pursuant to said Section 12.06(a)).
"Term Loan Notes" shall mean the promissory notes
provided for by Section 2.07(a) hereof and all promissory notes
delivered in substitution therefor, in each case as the same
shall be modified and supplemented and in effect from time to
time.
"Term Loans" shall have the meaning assigned to such
term in Section 2.01(a) hereof.
"Total Debt" shall mean all Indebtedness of the Company
and its Subsidiaries, determined on a consolidated basis.
"Total Debt Ratio" shall mean, as of any date of
determination thereof, the ratio of (a) Total Debt outstanding as
of such date to (b) Operating Cash Flow for the period of the
four fiscal quarters of the Company ended on, or most recently
ended prior to, such date.
"Total Debt Service" shall mean, as at the last day of
any Fiscal Year, the sum (calculated without duplication) of all
payments of principal of and interest on Indebtedness of the
Company and its Subsidiaries made or scheduled to be made during
such Fiscal Year.
"Total Interest" shall mean, for any period, all
interest, whether paid in cash or accrued as a liability, on all
Indebtedness (including imputed interest on Capital Lease
Obligations) of the Company and its Subsidiaries, determined on a
consolidated basis, for such period, provided that (a) there
shall be added to "Total Interest" any fees or commissions or net
losses amortized during such period under Interest Rate
Protection Agreements and any fees or commissions payable in
connection with any letters of credit during such period and (b)<PAGE>
<PAGE>
there shall be subtracted from "Total Interest" any net gains <PAGE>
<PAGE>
- 27 -
under Interest Rate Protection Agreements during such period and
the aggregate amount of interest income in respect of cash and
cash equivalents of the Company and its Restricted Subsidiaries
realized during such period.
"Total Interest Coverage Ratio" shall mean, as of any
date of determination thereof, the ratio of (a) Operating Cash
Flow for the period of four fiscal quarters of the Company ended
on, or most recently ended prior to, such date to (b) Total
Interest for such period.
"Total Pro Forma Debt Service Coverage Ratio" shall
mean, as of any date of determination thereof, the ratio of
(a) Operating Cash Flow for the period of four fiscal quarters of
the Company ended on, or most recently ended prior to, such date
to (b) Pro Forma Debt Service for the period of four fiscal
quarters next following the period referred to in clause (a)
above.
"type" shall have the meaning assigned that term in
Section 1.03 hereof.
"UCGI" shall mean Unistar Communications Group, Inc., a
Delaware corporation.
"Unistar" shall mean Unistar Radio Networks, Inc., a
Delaware corporation.
"Unistar Acquisition" shall mean the acquisition by the
Company of the Unistar Shares from UCGI on substantially the
terms set forth in the Stock Purchase Agreement.
"Unistar/Infinity Transaction Documents" shall mean the
Stock Purchase Agreement, the Securities Purchase Agreement, the
Management Agreement, the Voting Agreement, the Registration
Rights Agreement, the Initial Warrant and the Incentive Warrants.
"Unistar Shares" shall mean all of the issued and
outstanding shares of capital stock of Unistar.
"Voting Agreement" shall mean a Voting Agreement
between the Company, Norman J. Pattiz and INI in substantially<PAGE>
<PAGE>
the form of Exhibit B to the Stock Purchase Agreement, as the <PAGE>
<PAGE>
- 28 -
same shall be modified and supplemented and in effect from time
to time.
"Working Investment" shall mean, as at any date of
determination thereof, for any Person and its Consolidated
Subsidiaries (determined in accordance with GAAP), the excess of
(a) the sum of (i) the amount of all trade receivables and
accounts receivable, plus (ii) the value of all inventory
including, without limitation, all work-in-process and all
merchandise inventory, plus (iii) all prepaid expenses and all
unbilled contracts over (b) the sum of (i) the amount of all
accounts payable plus (ii) all accrued liabilities plus all
deferred revenue.
1.02 Accounting Terms and Determinations
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Administrative Agent or
the Banks hereunder shall (unless otherwise disclosed to the
Banks as provided in Section 1.02(b) hereof, but subject to
Section 1.02(c) hereof) be prepared, in accordance with GAAP
applied on a basis consistent with the accounting principles used
in the preparation of the audited financial statements of the
Company and its Consolidated Subsidiaries referred to in
Section 7.02 hereof, and all computations made for the purpose of
determining compliance with Section 8 hereof, and those made for
the purpose of determining the Applicable Margin and the amount
of each prepayment required by Section 3.04 hereof, shall utilize
accounting principles and policies in effect at the time of the
preparation of and in conformity with those used to prepare such
audited financial statements.
(b) The Company shall deliver to the Administrative
Agent and the Banks at the same time as the delivery of any
annual or quarterly financial statement under Sections 8.01(a) or
8.01(b) hereof a description in reasonable detail of any material
variation between the application of accounting principles
employed in the preparation of such statement and the application
of accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements and reasonable
estimates of the difference between such statements arising as a
consequence thereof. <PAGE>
<PAGE>
- 29 -
(c) Except as otherwise provided herein, if any
changes in accounting principles from those used in the
preparation of the audited financial statements referred to in
Section 7.02 hereof are hereafter required or permitted by the
rules, regulations, pronouncements and opinions of the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with
similar functions) and are adopted by the Company or any of its
Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the
method of calculation of any of the financial covenants,
standards or terms in or relating to Section 3.04, Section 8 or
any other provision of this Agreement, the parties hereto agree
to enter into discussions with a view to amending such provisions
so as to equitably reflect such changes with the desired result
that the criteria for evaluating the financial condition of the
Company and its Consolidated Subsidiaries shall be the same after
such changes as if such changes had not been made, provided that
no change in such accounting principles that would affect the
method of calculation of any of said financial covenants,
standards or terms shall be given effect in such calculations
until such provisions are amended, in a manner satisfactory to
the Majority Banks, to so reflect such change in accounting
principles.
(d) The Company will maintain its accounts and the
accounts of its Subsidiaries on the basis of a fiscal year ending
November 30 of each year, and the last days of the first three
fiscal quarters in each Fiscal Year will be February 28 or 29 (as
the case may be), May 31 and August 31 of each year,
respectively; provided that (i) the Company may, by prior written
notice to the Administrative Agent and the Banks, change the last
day of the Fiscal Year and of each of its Subsidiaries to
December 31 (and will thereupon change the last days of its and
its Subsidiaries first three fiscal quarters in each Fiscal Year
to March 31, June 30 and September 30, respectively); and (ii) in
connection with any such change in the basis of the Fiscal Year,
the Company, the Banks and the Administrative Agent hereby agree
to enter into discussions, promptly after the Company has given
the written notice referred to in clause (i) above, with a view
to amending this Agreement to address to the mutual satisfaction
of the parties the effect of such change on the financial and
other covenants contained herein and on the other terms and <PAGE>
<PAGE>
- 30 -
conditions of this Agreement that may be affected solely by
reason of such change.
1.03 Types and Series of Loans and Commitments. Loans
hereunder are distinguished by "type" and "series" and
Commitments hereunder are distinguished by "series". The "type"
of a Loan refers to whether such Loan is a Base Rate Loan or a
Eurodollar Loan. The "series" of a Loan refers to whether such
Loan is a Term Loan or a Revolving Credit Loan and the "series"
of a Commitment refers to whether such Commitment is an Term Loan
Commitment or a Revolving Credit Commitment.
Section 2. Commitments
2.01 Loans
(a) Term Loans. Each Term Loan Bank severally
agrees, on the terms and conditions of this Agreement, to make
term loans to the Company on the Closing Date in an aggregate
principal amount up to but not exceeding the amount of such
Bank's Term Loan Commitment as then in effect. Loans made
pursuant to this Section 2.01(a) are herein called "Term Loans".
Subject to the terms and conditions of this Agreement, the
Company may (as provided in Section 2.08 hereof) Convert Term
Loans of one type into Term Loans of the other type or Continue
Term Loans of one type as Term Loans of the same type.
(b) Revolving Credit Loans. Each Revolving Credit
Bank severally agrees, on the terms and conditions of this
Agreement, to make loans to the Company on any Business Day
during the period from and including the Closing Date to and
including the Commitment Termination Date in an aggregate
principal amount up to but not exceeding the amount of such
Bank's Revolving Credit Commitment as then in effect. Loans made
pursuant to this Section 2.01(b) are herein called "Revolving
Credit Loans". Subject to the terms and conditions of this
Agreement, during such period the Company may borrow, prepay and
reborrow the amount of the Revolving Credit Commitments by means
of Base Rate Loans and Eurodollar Loans and may (as provided in
Section 2.08 hereof) Convert Revolving Credit Loans of one type
into Revolving Credit Loans of the other type or Continue
Revolving Credit Loans of one type as Revolving Credit Loans of
the same type.<PAGE>
PAGE
<PAGE>
<PAGE>
- 31 -
2.02 Borrowings. The Company shall give the
Administrative Agent (which shall promptly notify the Term Loan
Banks and/or the Revolving Credit Banks, as applicable) notice of
each borrowing hereunder as provided in Section 4.05 hereof. Not
later than 11:00 a.m. New York time on the date specified for
each borrowing hereunder, each such Bank shall make available the
amount of the Loan(s) to be made by it on such date to the
Administrative Agent, at account number NYAO-DI-900-9-000002
maintained by the Administrative Agent with Chase at the
Principal Office, in immediately available funds, for account of
the Company. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be
made available to the Company by depositing the same, in
immediately available funds, in an account of the Company
maintained with Chase at the Principal Office designated by the
Company or by wiring the same, in immediately available funds, to
any account specified by the Company in the related notice of
such borrowing.
2.03 Changes of Commitments
(a) Voluntary. The Company shall have the right to
terminate or reduce the aggregate amount of the Term Loan
Commitments and/or the Revolving Credit Commitments, as the case
may be, at any time or from time to time prior to the Closing
Date (in the case of the Term Loan Commitments) or the Commitment
Termination Date (in the case of the Revolving Credit
Commitments); provided that (x) the Company shall give notice of
each such termination or reduction as provided in Section 4.05
hereof and (y) each partial reduction shall be in an aggregate
amount at least equal to $1,000,000 or any integral multiple of
$1,000,000 in excess thereof (or, if less, the aggregate amount
of Term Loan Commitments or Revolving Credit Commitments, as the
case may be, then remaining).
(b) Mandatory
(i) The Commitments shall automatically terminate if
the Closing Date shall not have occurred on or prior to
March 31, 1994.<PAGE>
<PAGE>
(ii) The aggregate unused amount of the Term Loan
Commitments shall be automatically reduced to zero and the<PAGE>
<PAGE>
- 32 -
Term Loan Commitments shall terminate at the close of
business on the Closing Date.
(iii) The aggregate amount of the Revolving Credit
Commitments shall be automatically reduced to zero and the
Revolving Credit Commitments shall terminate at the close of
business on the Commitment Termination Date.
(iv) Each series of Commitments shall be automatically
reduced by the amount of any prepayment of Loans of the
related series made as required by Section 3.04 hereof
(other than, with respect to the Revolving Credit Loan
Commitments, paragraph (e) thereof) or, if any of the events
described in said Section 3.04 occurs prior to the Closing
Date or at any time when Loans of such series are
outstanding in an amount less than the amount of such series
of Commitments as then in effect, which would have been
required to be made if Loans had been outstanding in an
aggregate principal amount equal to the aggregate amount of
such Commitments on the date of such occurrence.
(c) Effect of Commitment Reductions. Commitments once
terminated or reduced may not be reinstated.
2.04 Commitment Fee. The Company shall pay to the
Administrative Agent a commitment fee on the daily average unused
amount of Revolving Credit Commitment held by each Revolving
Credit Bank for account of such Revolving Credit Bank, for the
period from and including the Closing Date to but not including
the earlier of the date such Revolving Credit Commitment is
terminated and the Commitment Termination Date, at a rate per
annum equal to 1/2 of 1%. Accrued commitment fees shall be
payable on each Quarterly Date and on the date the relevant
Commitment is terminated or expires.
2.05 Lending Offices. The Loans of each type made by
each Bank shall be made and maintained at such Bank's Applicable
Lending Office for Loans of such type.
2.06 Several Obligations; Remedies Independent. The
failure of any Bank to make any Loan to be made by it on the
date specified therefor shall not relieve any other Bank of its<PAGE>
<PAGE>
obligation to make any Loan on such date, but neither any Bank
nor the Agents shall be responsible for the failure of any other
<PAGE>
<PAGE>
- 33 -
Bank to make a Loan to be made by such other Bank. The amounts
payable by the Company at any time hereunder and under the Notes
to each Bank shall be a separate and independent debt and each
Bank shall be entitled to protect and enforce its rights arising
out of this Agreement and the Notes, and it shall not be
necessary for any other Bank or the Agents to consent to, or be
joined as an additional party in, any proceedings for such
purposes.
2.07 Notes.
(a) The Term Loans made by each Term Loan Bank shall
be evidenced by a single promissory note (each, a "Term Loan
Note") of the Company in substantially the form of Exhibit A-1
hereto, dated the Closing Date, payable to the order of such
Bank in a principal amount equal to the amount of such Bank's
Term Loan made on the Closing Date and otherwise duly completed.
(b) The Revolving Credit Loans made by each Revolving
Credit Bank shall be evidenced by a single promissory note
(each, a "Revolving Credit Note") of the Company in
substantially the form of Exhibit A-2 hereto, dated the Closing
Date, payable to the order of such Bank in a principal amount
equal to the amount of such Bank's Revolving Credit Commitment
as in effect on the Closing Date and otherwise duly completed.
(c) The date, amount, type, interest rate, and
duration of Interest Period (if applicable) of each Loan of any
series held by any Bank, and each payment made on account of the
principal thereof, shall be recorded by such Bank on its books
and, prior to any transfer of the Note evidencing such Loans of
such series held by such Bank, endorsed by such Bank on the
schedule attached to such Note or any continuation thereof;
provided that the failure of such Bank to make any such
recordation or endorsement shall not affect the obligations of
the Company to make a payment when due of any amount owing under
such Note.
(d) No Bank shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a
permitted assignment of all or any portion of such Bank's
relevant Commitments, Loans and/or Notes pursuant to Section
12.06 hereof. <PAGE>
<PAGE>
- 34 -
2.08 Conversions or Continuations of Loans. Subject
to Section 4.04 hereof, the Company shall have the right to
Convert Loans of one type and series into Loans of the other
type of the same series or Continue Loans of one type and series
as Loans of the same type and series, at any time or from time
to time, provided that: (a) the Company shall give the
Administrative Agent notice of each such Conversion or
Continuation as provided in Section 4.05 hereof; and (b)
Eurodollar Loans may be Converted only on the last day of an
Interest Period for such Loans. All borrowings, Conversions and
Continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant
to such elections so that, after giving effect thereto, at no
time will the aggregate number of Eurodollar Tranches exceed
six. As used in this Section 2.08, the term "Eurodollar
Tranche" is the collective reference to Eurodollar Loans the
Interest Periods with respect to which begin on the same date
and end on the same later date (whether or not such Eurodollar
Loans shall originally have been
made on the same date). Notwithstanding the foregoing, and
without limiting the rights and remedies of the Banks under
Section 10 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Administrative Agent may
(and at the request of the Majority Banks shall) suspend the
right of the Company to Convert any Loan into a Eurodollar Loan,
or to Continue any Loan as a Eurodollar Loan, in which event all
Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) into Base Rate Loans or, if
outstanding as Base Rate Loans, Continued as Base Rate Loans.
Section 3. Payments of Principal and Interest
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the
Administrative Agent for account of each Term Loan Bank the
aggregate principal amount of the Term Loans held by such Bank
in 28 installments payable on the Principal Payment Dates as
follows (each such installment to be in an amount equal to the
product of (i) the aggregate amount of the Term Loans made to
the Company on the Closing Date times (ii) the percentage set
forth below opposite each such Principal Payment Date): <PAGE>
<PAGE>
- 35 -
Principal Payment Date Percentage of
Falling on or Nearest To: Principal Amount (%)
________________________ ____________________
February 28, 1995 2.2727
May 31, 1995 2.2727
August 31, 1995 2.2727
November 30, 1995 2.2727
February 29, 1996 3.4090
May 31, 1996 3.4090
August 31, 1996 3.4090
November 30, 1996 3.4090
February 28, 1997 3.4090
May 31, 1997 3.4090
August 31, 1997 3.4090
November 30, 1997 3.4090
February 28, 1998 4.5455
May 31, 1998 4.5455
August 31, 1998 4.5455
November 30, 1998 4.5455
February 28, 1999 4.5455
May 31, 1999 4.5455
August 31, 1999 4.5455
November 30, 1999 4.5455
February 29, 2000 3.4090
May 31, 2000 3.4090
August 31, 2000 3.4090
November 30, 2000 3.4090
February 28, 2001 3.4090
May 31, 2001 3.4090
August 31, 2001 3.4090
November 30, 2001 3.4090
(b) The Company hereby promises to pay to the
Administrative Agent for account of each Revolving Credit Bank
the aggregate principal amount of the Revolving Credit Loans
outstanding on the Commitment Termination Date and held by such
Bank on the Commitment Termination Date. <PAGE>
<PAGE>
- 37 -
3.02 Interest.
(a) The Company hereby promises to pay to the
Administrative Agent for account of each Bank interest on the
unpaid principal amount of each Loan held by such Bank for the
period commencing on and including the date of such Loan to but
excluding the date such Loan is paid in full, at the following
rates per annum:
(i) during any period while such Loan is a Base
Rate Loan, the Base Rate (as in effect from time to time)
plus the Applicable Margin; and
(ii) during any period while such Loan is a
Eurodollar Loan, for each Interest Period relating thereto,
the Eurodollar Rate for such Loan for such Interest Period
plus the Applicable Margin.
(b) Notwithstanding the foregoing, to the maximum
extent permitted by the law of the State of New York, the Company
hereby promises to pay to the Administrative Agent interest at
the applicable Post-Default Rate on the aggregate principal
amount of and interest on Loans and on all other amounts payable
by the Company hereunder and under the other Basic Documents from
and after the occurrence and during the continuance of each
Payment Default (such interest to be paid for the account of the
respective Banks or the Administrative Agent to which such
principal, interest or other amount not paid when due is
payable).
(c) Accrued interest on each Loan shall be payable
(i) in the case of a Base Rate Loan, quarterly on the Quarterly
Dates, (ii) in the case of a Eurodollar Loan, on the last day of
each Interest Period therefor and, if such Interest Period is
longer than three months, at three-month intervals following the
first day of such Interest Period, and (iii) in the case of any
Loan, upon the payment or prepayment thereof or the Conversion of
such Loan to a Loan of the other type (but only on the principal
amount so paid, prepaid or Converted), except that interest
payable at the Post-Default Rate shall be payable from time to
time on demand. Promptly after the determination of any interest
rate provided for herein or any change therein, the
Administrative Agent shall give notice thereof to the Banks to
which such interest is payable and to the Company.
<PAGE>
<PAGE>
- 37 -
3.03 Optional Prepayments. Subject to Section 4.04
hereof, the Company shall have the right to prepay Loans made to
it at any time or from time to time, provided that: (a) the
Company shall give the Administrative Agent notice of each such
prepayment as provided in Section 4.05 hereof (and, upon the date
specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder); and (b) each
partial prepayment shall, at the option of the Company, be
applied to the prepayment of Revolving Credit Loans or the Term
Loans pro rata in accordance with the respective aggregate
principal amounts of the Revolving Credit Loans and Term Loans so
prepaid (the amount of the Term Loans so prepaid to be applied to
the remaining installments of such Loans in the inverse order of
maturity); provided that, if the Company so elects in the related
notice of prepayment referred to in clause (a) above, all or that
part (as specified by the Company in such notice) of any amount
required by clause (b) above to be applied to the installments of
the Term Loans in the inverse order of maturity shall instead be
applied to the installments of the Term Loans in the direct order
of their maturity except that no such installment scheduled to be
paid after the date which is 180 days after the date of such
prepayment may be prepaid pursuant to this proviso.
3.04 Mandatory Prepayments. The Company shall prepay
the Loans as follows:
(a) Dispositions. Upon the receipt by the Company or
any Subsidiary of the proceeds of any Disposition (other than any
Disposition permitted by Section 8.12(c) hereof), the principal
of the Loans shall, to the extent the net proceeds of such
Disposition (when taken together with the aggregate amount of net
proceeds of all other Dispositions (other than any permitted by
said Section 8.12(c) during such Fiscal Year) shall exceed
$250,000, be prepaid (as specified in paragraph (f) below) in an
amount equal to such net proceeds. For purposes of this
Section 3.04(a), "net proceeds" shall mean all cash amounts
received in respect of any such Disposition (including any cash
amounts received by way of deferred payment pursuant to a note
receivable or otherwise but only as and when received), net of
(i) expenses incurred in connection with such Disposition and
taxes paid (or reasonably estimated to be payable) in connection
therewith and (ii) contractually required repayments of
Indebtedness payable to Persons other than the Banks hereunder to
<PAGE>
- 38 -
the extent secured by a Lien on the relevant Properties that are
the subject of such Disposition.
(b) Casualty Events. In the event of the receipt by
the Company or any Subsidiary of the proceeds of any property or
casualty insurance (excluding, however, any business interruption
insurance), except to the extent such proceeds are to be applied
reasonably promptly towards the repair, reconstruction or
replacement of the property the damage to or loss of which gave
rise to the payment thereof, the principal of the Loans shall be
prepaid (as specified in paragraph (f) below) in an amount equal
to such proceeds, provided that (i) for purposes of determining
the amount of such proceeds to be so applied, such proceeds shall
be net of taxes paid (or reasonably estimated to be payable) in
connection therewith and of contractually required repayments of
Indebtedness payable to Persons other than the Banks hereunder to
the extent secured by a Lien on such Property and (ii) subject to
clause (i) above, unless the Majority Banks otherwise agree, if
at the time such proceeds are received by the Company or any of
its Subsidiaries a Payment Default shall have occurred and be
continuing, such proceeds shall be applied to the prepayment of
the Loans in the manner required by this Section 3.04(b) and
shall not be used for the repair, reconstruction or replacement
of such property.
(c) Excess Cash Flow, Etc. Upon the date of the
delivery to the Administrative Agent of the financial statements
of the Company pursuant to Section 8.01(b) hereof for each Fiscal
Year (as used herein, the "immediately preceding Fiscal Year")
commencing with the Fiscal Year ending on November 30, 1994, but
in no event later than April 30 of the next succeeding Fiscal
Year, the principal of Loans shall be prepaid (as specified in
paragraph (f) below) in an aggregate amount equal to the sum of
(i) 50% of Excess Cash Flow for the immediately preceding Fiscal
Year plus (ii) the aggregate amount of payments made by the
Company and its Subsidiaries during such immediately preceding
Fiscal Year to redeem Class Action Warrants to the extent
permitted by Section 8.09(g) hereof.
(d) Equity Issuances. Upon any Equity Issuance, the
principal of the Loans shall be prepaid (as specified in
paragraph (f) below) in an amount equal to 50% of the net
proceeds thereof. For purposes of this Section 3.04(d), "net
proceeds" shall mean, with respect to any Equity Issuance, the
<PAGE>
- 39 -
aggregate amount of all cash received by the Company and its
Subsidiaries in respect thereof and the fair market value of all
non-cash consideration received by the Company and its
Subsidiaries in respect thereof, net of expenses incurred by the
Company and its Subsidiaries in connection therewith.
(e) Reductions of Revolving Credit Commitments. Upon
each reduction in the aggregate amount of the Revolving Credit
Commitments pursuant to Section 2.03 hereof to an aggregate
amount less than the then aggregate outstanding principal amount
of the Revolving Credit Loans, Revolving Credit Loans shall be
prepaid in the amount required so that, after giving effect
thereto, the aggregate outstanding principal amount of the
Revolving Credit Loans is less than or equal to the amount of the
Revolving Credit Loan Commitments as so reduced.
(f) Application and Timing of Payments. Each
prepayment under this Section 3.04 shall be applied, first, to
the prepayment of the Term Loans (such prepayment to be applied
to the remaining installments of such Loans in the inverse order
of maturity), and then, after all Term Loans have been paid in
full, to the prepayment of Revolving Credit Loans. The Company
shall give notice to the Administrative Agent of each prepayment
pursuant to this Section 3.04 in the same manner and at the same
time as is required for any optional prepayment pursuant to
Section 3.03 hereof.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein or
therein, all payments of principal, interest and other amounts to
be made by each Obligor under this Agreement and the other Basic
Documents, shall be made in Dollars, in immediately available
funds, to the Administrative Agent at account number
NYAO-DI-900-9-000002 maintained by the Administrative Agent with
Chase at the Principal Office, not later than 11:00 a.m. New York
time on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).
<PAGE>
- 40 -
(b) The Administrative Agent or any Bank for whose
account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of any Obligor
with it (with notice to the Company and, if such Obligor is not
the Company, such Obligor).
(c) The Company shall, at the time it makes any
payment under this Agreement or any Note, notify the Administra-
tive Agent (which shall so notify the intended recipient(s)
thereof) of the Loans or other amounts payable by the Company
hereunder to which such payment is to be applied in which case
such payment shall be so applied, subject to Sections 3.03, 3.04
and 4.02 hereof (and in the event that it fails to so specify,
the Administrative Agent may distribute the amount of such
payment to the Banks in such manner as the Majority Banks may
determine to be appropriate, subject to said Sections 3.03, 3.04
and 4.02).
(d) Each payment received by the Administrative Agent
under this Agreement or any Note for account of any Bank shall be
paid by the Administrative Agent promptly to such Bank, in
immediately available funds, for account of such Bank's
Applicable Lending Office for the Loan or other obligation in
respect of which such payment is made.
(e) All payments by each Obligor hereunder shall be
made without deduction, set-off or counterclaim.
(f) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day which is not
a Business Day such payment shall be made on the immediately
preceding Business Day and interest on any principal so paid
shall be payable to, but excluding, the date such payment is
made.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein:
(a) each borrowing under each series of Commitments
shall be made from the Banks holding such series of Commit-
ments, each payment of commitment fees in respect of each
series of Commitments shall be made for account of the Banks<PAGE>
<PAGE>
holding such series of Commitments, and each termination or<PAGE>
<PAGE>
- 41 -
reduction of the amount of each series of Commitments shall
be applied to such series, pro rata according to the
respective unused amounts of the Commitments of such series;
(b) the making, Conversion and Continuation of Loans
of a particular type and series (other than Conversions
provided for by Section 5.04 hereof) shall be made pro rata
among the Banks holding Loans of such type and series
according to the respective principal amounts of their
Commitments of such series (in the case of making Loans) or
their Loans of such series (in the case of Conversions and
Continuations of Loans), and Eurodollar Loans of a
particular type and series having the same Interest Period
shall be allocated pro rata among the Banks according to the
amounts of their respective Loans of such type and series;
(c) each payment or prepayment of principal of Loans
of a particular type and series shall be made to the
Administrative Agent for account of the Banks holding Loans
of such type and series pro rata in accordance with the
respective unpaid principal amounts of the Loans of such
type and series held by such Banks; and
(d) each payment of interest on Loans of a particular
type and series shall be made to the Administrative Agent
for account of the Banks holding Loans of such type and
series pro rata in accordance with the amounts of interest
on Loans of such type and series then due and payable to
such Banks.
4.03 Computations. Interest on Eurodollar Loans shall
be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable and
interest on Base Rate Loans and commitment fees shall be computed
on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which such interest or
commitment fee is payable. Notwithstanding the foregoing, for
each day that the Base Rate is calculated by reference to the
Federal Funds Rate, interest on Base Rate Loans shall be computed
on the basis of a year of 360 days and actual days elapsed. <PAGE>
<PAGE>
- 42 -
4.04 Minimum Amounts. Except for mandatory
prepayments made pursuant to Section 3.04 hereof and Conversions
or prepayments made pursuant to Section 5.04 hereof, each
borrowing, Conversion and prepayment of principal of Base Rate
Loans shall be in an amount at least equal to $1,000,000 and in
multiples of $500,000 in excess thereof and each borrowing,
Conversion and prepayment of Eurodollar Loans shall be in an
amount at least equal to $1,000,000 and in multiples of $500,000
in excess thereof (borrowings of Loans of different types or
series, Conversions of or into Loans of different types or, in
the case of Eurodollar Loans having different Interest Periods,
prepayments of Loans of different types or series or, in the case
of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions
and prepayments for purposes of the foregoing, one for each type
or series or Interest Period).
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the
Commitments, of borrowings, Conversions, Continuations and
optional and mandatory prepayments of Loans, of series of Loans,
of types of Loans and of the duration of Interest Periods shall
be irrevocable and shall be effective only if received by the
Administrative Agent not later than 11:00 a.m. New York time on
the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
<TABLE>
Number of
Business
Notice Days Prior
______ __________
<C> <C>
Termination or reduction
of Commitments 1
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 1 <PAGE>
</TABLE>
<PAGE>
- 43 -
<TABLE>
<C> <C>
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
</TABLE>
Each such notice of termination or reduction shall specify the
amount and the series of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation
or optional or mandatory prepayment shall specify the series of
Loans to be borrowed, Converted, Continued or prepaid and the
amount (subject to Section 4.04 hereof) and type of each Loan to
be borrowed, Converted, Continued or prepaid and the date of
borrowing, Conversion, Continuation or optional prepayment (which
shall be a Business Day). Each such notice of the duration of an
Interest Period shall specify the Loans to which such Interest
Period is to relate. The Administrative Agent shall promptly
notify the relevant Banks of the contents of each such notice.
In the event that the Company fails to select the type of any
Loan, or the duration of any Interest Period for any Eurodollar
Loan, within the time period and otherwise as provided in this
Section 4.05, such Loan (if outstanding as a Eurodollar Loan)
will be automatically Converted into a Base Rate Loan on the last
day of the then current Interest Period for such Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a
Bank or the Company (the "Payor") prior to the date on which the
Payor is to make payment to the Administrative Agent of (in the
case of a Bank) the proceeds of a Loan to be made by it hereunder
or (in the case of the Company) a payment to the Administrative
Agent for account of one or more of the Banks hereunder (such
payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend
to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the
intended recipient(s) on such date and, if the Payor has not in
fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the <PAGE>
<PAGE>
- 44 -
Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent
recovers such amount at, if such recipient is a Bank, a rate per
annum equal to the Federal Funds Rate for such day or, if such
recipient is the Company, at a rate per annum equal to the Base
Rate then in effect plus (if such Required Payment related to the
making of a Base Rate Loan) the Applicable Margin for Base Rate
Loans and, if such recipient(s) shall fail promptly to make such
payment, the Administrative Agent shall be entitled to recover
such amount, on demand, from the Payor, together with interest as
aforesaid.
4.07 Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Bank may otherwise have, each Bank shall be
entitled, at its option, to offset balances held by it for
account of such Obligor at any of its offices, in Dollars or in
any other currency, against any principal of or interest on any
of such Bank's Loans or any other amount payable to such Bank
hereunder, that is not paid when due (regardless of whether such
balances are then due to such Obligor), in which case it shall
promptly notify the Company (and, if such Obligor is not the
Company, such Obligor) and the Administrative Agent thereof,
provided that such Bank's failure to give such notice shall not
affect the validity thereof.
(b) (i) Prior to the date the principal amount then
outstanding of, and accrued interest on, the Loans become
due and payable pursuant to Section 10 hereof, if any Term
Loan Bank shall obtain payment of any principal of or
interest on any of the Term Loans or payment of any other
amount under this Agreement, any Note evidencing Term Loans
held by it or the Security Agreement through the exercise of
any right of set-off, banker's lien or counterclaim or
similar right or otherwise, and, as a result of such
payment, such Term Loan Bank shall have received a greater
percentage of the principal or interest then due hereunder
in respect of Term Loans held by such Term Loan Bank than
the percentage of principal or interest then due and payable
hereunder in respect of Term Loans held by the other Term <PAGE>
<PAGE>
- 45 -
Loan Banks received by the other Term Loan Banks, such Term
Loan Bank shall promptly purchase from such other Term Loan
Banks participations in (or, if and to the extent specified
by such Term Loan Bank, direct interests in) the Term Loans
held by such other Term Loan Banks (or in interest due
thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable,
to the end that all of such Term Loan Banks shall share the
benefit of such excess payment (net of any expenses which
may be incurred by such Term Loan Bank in obtaining or
preserving such excess payment) pro rata in accordance with
the principal and/or interest on the Term Loans then due and
payable held by each of such Term Loan Banks. To such end
all the Term Loan Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be
restored.
(ii) Prior to the date the principal amount then
outstanding of, and accrued interest on, the Loans become
due and payable pursuant to Section 10 hereof, if any
Revolving Credit Bank shall obtain payment of any principal
of or interest on any of the Revolving Credit Loans or
payment of any other amount under this Agreement, any Note
evidencing Revolving Credit Loans held by it or the Security
Agreement through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise,
and, as a result of such payment, such Revolving Credit Bank
shall have received a greater percentage of the principal or
interest then due hereunder in respect of Revolving Credit
Loans held by such Revolving Credit Bank than the percentage
of principal or interest then due and payable hereunder in
respect of Revolving Credit Loans held by the other
Revolving Credit Banks received by the other Revolving
Credit Banks, such Revolving Credit Bank shall promptly
purchase from such other Revolving Credit Banks
participations in (or, if and to the extent specified by
such Revolving Credit Bank, direct interests in) the
Revolving Credit Loans held by such other Revolving Credit
Banks (or in interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all of such
Revolving Credit Banks shall share the benefit of such
excess payment (net of any expenses which may be incurred
by <PAGE>
<PAGE>
- 46 -
such Revolving Credit Bank in obtaining or preserving such
excess payment) pro rata in accordance with the principal
and/or interest on the Revolving Credit Loans then due and
payable held by each of such Revolving Credit Banks. To
such end all the Revolving Credit Banks shall make
appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is
rescinded or must otherwise be restored.
(iii) On and after the date the principal amount then
outstanding of, and accrued interest on, the Loans become
due and payable pursuant to Section 10 hereof, if any Bank
shall obtain payment of any principal of or interest on the
Loans of any series or payment of any other amount under
this Agreement, any Note held by it or the Security
Agreement or otherwise through the exercise of any right of
set-off, banker's lien or counterclaim or similar right,
and, as a result of such payment, such Bank shall have
received a greater percentage of the principal or interest
then due hereunder in respect of the Loans held by such Bank
than the percentage of principal or interest then due and
payable hereunder in respect of the Loans held by the other
Banks received by the other Banks holding Loans it shall
promptly purchase from such other Banks participations in
(or if and to the extent specified by such Bank, direct
interests in) the Loans of such series held by such other
Banks (or in interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all of such
Banks shall share the benefit of such excess payment (net of
any expenses which may be incurred by such Bank in obtaining
or preserving such excess payment) pro rata in accordance
with the principal and/or interest on the Loans of such
series then due and payable held by each of such Banks. To
such end all the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be
restored.
(c) Each Obligor agrees that any Bank so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a <PAGE>
<PAGE>
- 47 -
direct holder of Loans or other amounts (as the case may be)
owing to such Bank in the amount of such participation.
(d) Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of any
Obligor. If, under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to
the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Banks
entitled under this Section 4.07 to share in the benefits of any
recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from
time to time such amounts as such Bank may determine to be
necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining of any
Eurodollar Loans hereunder or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount
receivable by such Bank hereunder in respect of any of such Loans
or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (other than taxes imposed on or
measured by the overall net income of such Bank or of its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank is incorporated or has its
principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than the Reserve Requirement
utilized in the determination of the Eurodollar Rate for
such Loan) relating to any extensions of credit or other<PAGE>
<PAGE>
assets of, or any deposits with or other liabilities of,<PAGE>
<PAGE>
- 48 -
such Bank (including any of such Loans or any deposits
referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof), or any commitment of such Bank
(including the Commitments of such Bank hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit
or liabilities) or its Commitments.
If any Bank requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Bank (with a
copy to the Administrative Agent), suspend the obligation of such
Bank to make or Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case
the provisions of Section 5.04 hereof shall be applicable);
provided, that such suspension shall not affect the right of such
Bank to receive the compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason
of any Regulatory Change, any Bank either (i) incurs Additional
Costs based on or measured by the excess above a specified level
of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in
this Agreement or a category of extensions of credit or other
assets of such Bank which includes Eurodollar Loans or
(ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if
such Bank so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Bank to make or
Continue, or to Convert Base Rate Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases
to be in effect (in which case the provisions of Section 5.04
hereof shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Bank from time to time on
request such amounts as such Bank may determine to be necessary
to compensate such Bank (or, without duplication, the bank
holding company of which such Bank is a subsidiary) for any costs
which it determines are attributable to the maintenance by such <PAGE>
<PAGE>
- 49 -
Bank (or any Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the
force of law) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or requirement (whether or not
having the force of law and whether or not the failure to comply
therewith would be unlawful) heretofore or hereafter issued by
any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including,
without limitation, the Final Risk-Based Capital Guidelines of
the Board of Governors of the Federal Reserve System (12 CFR
Part 208, Appendix A; 12 CFR Part 225, Appendix A) and the Final
Risk-Based Capital Guidelines of the Office of the Comptroller of
the Currency (12 CFR Part 3, Appendix A)), of capital in respect
of its Commitments or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate
of return on assets or equity of such Bank (or any Applicable
Lending Office or such bank holding company) to a level below
that which such Bank (or any Applicable Lending Office or such
bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes
of this Section 5.01(c), "Basle Accord" shall mean the proposals
for risk-based capital framework described by the Basle Committee
on Banking Regulations and Supervisory Practices in its paper
entitled "International Convergence of Capital Measurement and
Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any replacement
thereof.
(d) Each Bank shall notify the Company of any event
occurring after the date of this Agreement that will entitle such
Bank to compensation under paragraph (a) or (c) of this
Section 5.01 as promptly as practicable after it obtains actual
knowledge thereof and determines to request such compensation and
will designate a different Applicable Lending Office for the
Loans of such Bank affected by such event if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable opinion of such
Bank, be disadvantageous to such Bank, except that such Bank
shall have no obligation to designate an Applicable Lending
Office located in the United States of America, provided that no
Bank shall be entitled to compensation under this Section 5.01
for any costs incurred more than six months prior to the date the
<PAGE>
<PAGE>
- 50 -
respective Bank requests such compensation from the Company.
Each Bank will furnish to the Company a certificate setting forth
the basis and amount of each request by such Bank for
compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Bank for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to
paragraph (a) or (b) of this Section 5.01, or of the effect of
capital maintained pursuant to paragraph (c) of this
Section 5.01, on its costs or rate of return of maintaining Loans
or its obligation to make Loans, or on amounts receivable by it
in respect of Loans, and of the amounts required to compensate
such Bank under this Section 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable
basis. Notwithstanding anything in this Section 5.01 to the
contrary, no Bank shall be entitled to compensation (i) if any
increase in costs results from any Bank failing to comply with
any of the requirements set forth in Section 5.06(a) or (ii) for
any costs to a Bank that are already taken into account in the
determination of the applicable interest rate.
5.02 Limitation on Eurodollar Loans. Anything herein
to the contrary notwithstanding, if, on or prior to the deter-
mination of any Eurodollar Base Rate for any Eurodollar Loans for
any Interest Period:
(a) the Administrative Agent determines, which
determination shall be conclusive, that quotations of
interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof
are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of
interest for such Eurodollar Loans as provided herein; or
(b) if such Loans are Term Loans and/or Revolving
Credit Loans, the Majority Term Loan Banks and/or Majority
Revolving Credit Banks, respectively, determine, which
determination shall be conclusive, and notify the Adminis-
trative Agent that the relevant rates of interest referred
to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans for such Interest Period is to
be determined are not likely adequately to cover the cost to
such Banks of making or maintaining Eurodollar Loans for
such Interest Period; <PAGE>
<PAGE>
- 51 -
then the Administrative Agent shall give the Company and each of
the Banks which are to make or which hold such Loans prompt
notice thereof, and so long as such condition remains in effect,
such Banks shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base
Rate Loans into Eurodollar Loans and each outstanding Eurodollar
Loan held by such Bank shall, on the last day of the then current
Interest Period for such Eurodollar Loan, be Converted
automatically into Base Rate Loans in accordance with
Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Bank or its Applicable Lending Office to honor its obligation to
make or maintain Eurodollar Loans hereunder, then such Bank shall
promptly notify the Company thereof (with a copy to the
Administrative Agent) and such Bank's obligation to make or
Continue, or to Convert Loans of the other type into, Eurodollar
Loans shall be suspended until such time as such Bank may again
make and maintain Eurodollar Loans (in which case the provisions
of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
of any Bank to make Eurodollar Loans or Continue, or to Convert
Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Bank's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for such
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.01(b) or 5.03 hereof, on such earlier date as such Bank
may specify to the Company with a copy to the Administrative
Agent) and, unless and until such Bank gives notice as provided
below that the circumstances specified in Section 5.01 or 5.03
hereof which gave rise to such Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans of
any series have been so Converted, all payments and
prepayments of principal which would otherwise be applied to
such Bank's Eurodollar Loans of such series shall be applied
instead to its Base Rate Loans of such series; and
(b) all Loans which would otherwise be made or<PAGE>
<PAGE>
Continued by such Bank as Eurodollar Loans shall be made or
Continued instead as Base Rate Loans and all Base Rate Loans <PAGE>
<PAGE>
- 52 -
of such Bank which would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Bank gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in
Section 5.01 or 5.03 hereof which gave rise to the Conversion of
such Bank's Eurodollar Loans of any series pursuant to this
Section 5.04 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a time when
Eurodollar Loans of such series held by other Banks are
outstanding, such Bank's Base Rate Loans of such series shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect
thereto, all Loans of such series held by such Banks and by such
Bank are held pro rata (as to principal amounts, types and
Interest Periods) in accordance with their respective Loans of
such series.
5.05 Compensation. The Company shall pay to the
Administrative Agent for account of each Bank, upon the request
of such Bank through the Administrative Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such
Bank determines is attributable to:
(a) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Bank for any reason (including,
without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 6 hereof to be
satisfied) to borrow a Eurodollar Loan from such Bank on the
date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued
on the principal amount so paid, prepaid or Converted or not
borrowed for the period from the date of such payment, <PAGE>
<PAGE>
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prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan which
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest which otherwise would have
accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Bank would have bid in the
London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such
Bank). Each Bank will furnish a certificate to the Company
setting forth the basis and amount of each request by such Bank
for compensation under paragraph (a) or (b) of this Section 5.05,
such certificate to be conclusive as to the amount of
compensation to which such Bank is entitled provided the
determination of such amount is made on a reasonable basis.
5.06 U.S. Taxes.
(a) Prior to the date of the initial Loans hereunder,
and from time to time thereafter if requested by the Company or
the Administrative Agent or required because, as a result of a
change in law or a change in circumstances or otherwise, a
previously delivered form or statement becomes incomplete or
incorrect in any material respect, each Bank organized under the
laws of a jurisdiction outside the United States shall provide,
if applicable, the Administrative Agent and the Company with
complete, accurate and duly executed forms or other statements
prescribed by the Internal Revenue Service of the United States
certifying such Bank's exemption from, or entitlement to a
reduced rate of, United States withholding taxes (including
backup withholding taxes) with respect to its beneficial interest
in payments to be made to such Bank hereunder and under the
Notes. If such Bank has transferred a beneficial interest in any
part of the Notes payable to it, it will forward to the Company
or the Administrative Agent any such statements or forms executed
by the Person to which it has transferred such beneficial
interest.
(b) The Company and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future
taxes or withholdings, and all liabilities with respect thereto,
from payments hereunder or under the Notes, if and to the extent<PAGE>
<PAGE>
- 54 -
that the Company or the Administrative Agent in good faith
determines that such deduction or withholding is required by the
law of the United States, including, without limitation, any
applicable treaty of the United States. In the event the Company
or the Administrative Agent shall so determine that deduction or
withholding of taxes is required, it shall advise the affected
Bank as to the basis of such determination prior to actually
deducting and withholding such taxes. In the event the Company
or the Administrative Agent shall so deduct or withhold taxes
from amounts payable hereunder, it (i) shall pay to or deposit
with the appropriate taxing authority in a timely manner the full
amount of taxes it has deducted or withheld; (ii) shall provide
evidence of payment of such taxes to, or the deposit thereof
with, the appropriate taxing authority and a statement setting
forth the amount of taxes deducted or withheld, the applicable
rate, and any other information or documentation reasonably
requested by the Banks from whom the taxes were deducted or
withheld; and (iii) shall forward to such Banks any official tax
receipts or other documentation with respect to the payment or
deposit of the deducted or withheld taxes as may be issued from
time to time by the appropriate taxing authority. Unless the
Company and the Administrative Agent shall have received forms or
other documents satisfactory to them indicating that payments
hereunder or under any Note are not subject to United States
withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Company or the Administrative Agent
may withhold taxes from such payments at the applicable statutory
rate in the case of payment to or for any Bank organized under
the laws of a jurisdiction outside the United States.
(c) Each Bank organized under the laws of the United
States or any state thereof agrees (i) that as between it and the
Company or the Administrative Agent, it shall be the Person to
deduct and withhold taxes, and to the extent required by law it
shall deduct and withhold taxes, on amounts that such Bank may
remit to any other Person(s) by reason of any undisclosed sale of
a participation in this Agreement to such other Person(s)
pursuant to Section 12.06; and (ii) to indemnify the Company and
the Administrative Agent and any officers, directors, agents or
employees of the Company or the Administrative Agent against and
to hold them harmless from any tax, interest, additions to tax,
penalties, reasonable counsel and accountants fees and
disbursements arising from the assertion by any appropriate
taxing authority of any claim against them relating to a failure<PAGE>
<PAGE>
- 55 -
to withhold taxes as required by law with respect to amounts
described in clause (i) of this paragraph (c).
(d) Each assignee of a Bank's interest in this
Agreement in conformity with Section 12.06 shall be bound by this
Section 5.06, so that such assignee will have all of the
obligations and provide all of the forms and statements and all
indemnities, representations and warranties required to be given
under this Section 5.06. Unless the Company shall have consented
in writing to such assignment, no such assignee of a Bank's
interest in this Agreement shall have the right to any payment
under this Section 5.06 in excess of the amount that would have
been payable by the Company to the assignor Bank.
(e) Notwithstanding the foregoing, in the event that
any withholding taxes shall become payable solely as a result of
any change in any statute, treaty, ruling, determination or
regulation occurring after the Initial Date (as hereinafter
defined) in respect of any sum payable hereunder or under any
Note to any Bank (or any participant in a Loan held by a Bank) or
the Administrative Agent (i) the sum payable by the Company shall
be increased as may be necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 5.06) such Bank (or
any participant in a Loan held by a Bank) or the Administrative
Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the
Company shall make such deductions and (iii) the Company shall
pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. For
purposes of this Section 5.06, the term "Initial Date" shall mean
(i) in the case of the Administrative Agent, the date hereof,
(ii) in the case of each Bank as of the date hereof, the date
hereof and (iii) in the case of any other Bank, the date it
becomes a Bank hereunder pursuant to Section 12.06. No amount
payable hereunder to a holder of a participation in a Loan shall
be greater in amount than the amount that would have been paid to
the holder of the Loan had it retained the Loan and not sold the
participation therein.
(f) If as a result of withholding taxes becoming
payable in connection with any amount payable to or with respect
to a Bank (i) the sum payable by the Company is increased
pursuant to clause (i) of Section 5.06(e) hereof and (ii) such<PAGE>
<PAGE>
- 56 -
Bank utilizes a credit against any tax liability arising
hereunder for which it is liable (other than the income tax
liability directly satisfied by such withholding), then such Bank
shall promptly pay to the Company an amount equal to such amount
as the Bank estimates in a good faith exercise of its judgment
represents the credit so utilized (not to exceed the
corresponding sum payable by the Company pursuant to
Section 5.06(e) hereof), provided that a Bank shall not be
obligated to make any payment hereunder to the extent such
payment would result in such Bank's being in a worse after-tax
economic position than if amounts paid to such Bank had not been
subject to withholding taxes. In the event the credit is later
disallowed, deferred or recaptured for any reason, the Company
will pay the Bank such amount as will equal the amount of the
credit so disallowed, deferred or recaptured, provided that the
Company shall not be obligated to pay any amount hereunder to a
Bank with respect to any credit that is later disallowed or
recaptured in excess of the amount paid hereunder to the Company
by such Bank in respect of such credit. In any such case, the
applicable Bank shall provide to the Company a statement in
reasonable detail setting forth the determination of such credit
utilized by such Bank.
Section 6. Conditions Precedent
6.01 Term Loans. The obligation of each Term Loan
Bank to make the Term Loan to be made by it is subject to (i) the
condition precedent that such Term Loan shall be made on or
before March 31, 1994 and (ii) the receipt by the Administrative
Agent of the following, each of which shall be satisfactory to
the Administrative Agent in form and substance:
(a) Corporate Documents. The following documents,
each certified as indicated below:
(i) a copy of the charter, as amended, of each
Obligor certified by the Secretary or Assistant
Secretary of such Obligor, and a "long form"
certificate as to the good standing of and charter
documents filed by such Obligor from such Secretary of
State, in each case dated as of a date no earlier than
15 days prior to the Closing Date; <PAGE>
<PAGE>
- 57 -
(ii) a certificate of the Secretary or an
Assistant Secretary of each Obligor, dated the Closing
Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Obligor as in
effect on the date of the adoption of the resolutions
referred to in clause (B) below and on the date of such
certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board
of directors of such Obligor authorizing the execution,
delivery and performance of such of the Basic Documents
to which such Obligor is or is intended to be a party,
the extensions of credit hereunder and the grant of the
security interests provided for by the Security
Agreement, and that such resolutions have not been
modified, rescinded or amended and are in full force
and effect, (C) that the charter of such Obligor has
not been amended since the date of the certification
thereto furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each
officer of such Obligor executing this Agreement, any
of the Notes or any of the Security Documents and each
other document required to be delivered by such Obligor
to any of the Agents or the Banks hereunder or
thereunder (and each of the Agents and the Banks may
conclusively rely on such certificate until it receives
notice in writing from such Person); and
(iii) a certificate of another officer of each
Obligor dated the Closing Date and certifying as to the
incumbency and specimen signature of the Secretary or
Assistant Secretary, as the case may be, of such
Obligor, and a corresponding certificate of another
officer of such Obligor as to its signing officers.
(b) Officer's Certificate. A certificate of a Senior
Officer of the Company dated the Closing Date to the effect
set forth in Section 6.03(a) hereof.
(c) Opinion of Counsel to the Obligors. An opinion of
Riordan & McKinzie, counsel to the Obligors, dated the
Closing Date, substantially in the form of Exhibit C hereto
and an opinion of Debevoise & Plimpton, special New York
counsel to the Obligors, dated the Closing Date,
substantially in the form of Exhibit D hereto (and each <PAGE>
<PAGE>
- 58 -
Obligor hereby instructs each such counsel to deliver its
respective opinion to the Banks and the Agents).
(d) Opinion of Counsel to Chase. An opinion of
Milbank, Tweed, Hadley & McCloy, special New York counsel to
Chase, dated the Closing Date, substantially in the form of
Exhibit E hereto.
(e) Notes. The Notes, duly completed and executed and
delivered.
(f) Security Agreement. The Security Agreement, duly
completed, executed and delivered by each Obligor and the
Administrative Agent and the certificates identified under
the name of such Obligor in Schedule I thereto, in each case
accompanied by undated stock powers executed in blank. In
addition, each Obligor shall have taken such other action
(including delivering to the Administrative Agent for
filing, appropriately completed and duly executed Uniform
Commercial Code financing statements) as the Administrative
Agent shall have requested in order to perfect the security
interests created pursuant to the Security Agreement. In
addition, each Obligor shall have delivered to the
Administrative Agent the results (completed no earlier than
30 days prior to the Closing Date) of (i) a Uniform
Commercial Code search request in each jurisdiction in which
such Obligor holds any Property that is to be pledged to the
Administrative Agent under the Security Agreement, and (ii)
search requests of the U.S. Patent & Trademark Office and
the U.S. Copyright Office relative to each Obligor.
(g) Approvals and Consents. Evidence that all
necessary governmental and third party and shareholder
consents, licenses, permits and approvals in connection with
the execution, delivery, performance, validity and
enforceability of each of the Basic Documents and the other
transactions contemplated hereby has been issued or obtained
and are in full force and effect.
(h) Repayment of Existing Indebtedness. Evidence that
the principal of and interest on all Indebtedness
outstanding under the Existing Credit Agreement, and all
other amounts owing thereunder have been (or is<PAGE>
<PAGE>
- 59 -
simultaneously) repaid in full and all commitments under the
Existing Credit Agreement have been canceled; in addition,
the Administrative Agent shall have received from any Person
holding any Lien securing any such Indebtedness, such
Uniform Commercial Code termination statements, mortgage
releases and other instruments, in each case in proper form
for recording, as the Administrative Agent shall have
requested to release and terminate of record the Liens
securing such Indebtedness (or arrangements for such release
and termination satisfactory to the Majority Banks shall
have been made).
(i) Arrangements regarding Conversion of 9%
Debentures. Evidence that arrangements in form and
substance satisfactory to the Administrative Agent shall
have been made providing for the conversion to common stock,
redemption or retirement, in each case in accordance with
the terms of the 9% Debenture Indenture, on or prior to the
90th day following the Closing Date, of all of the 9%
Debentures outstanding on the Closing Date.
(j) Consummation of Unistar Acquisition and Related
Transactions. Evidence that: (i) the Company has purchased
(or is simultaneously purchasing) the Unistar Shares in
accordance with the terms of the Stock Purchase Agreement;
(ii) the transactions contemplated by Section 1 of the
Securities Purchase Agreement have been consummated (or is
simultaneous being consummated in accordance with the terms
of the Securities Purchase Agreement); and (iii) all
conditions specified in Sections 5 and 6 of each of the
Stock Purchase Agreement and the Securities Purchase
Agreement have been satisfied (as if the reference to the
"Purchaser" in Section 5.7 of the Securities Purchase
Agreement referred to the Majority Banks) without any
waivers thereof except for waivers approved by the Majority
Banks.
(k) Unistar. Documentation in form and substance
satisfactory to the Administrative Agent pursuant to which
Unistar shall, upon the consummation of the Unistar
Acquisition, become (i) a "Subsidiary Guarantor" (and,
thereby, an "Obligor") hereunder and (ii) party to the
Security Agreement as a "Subsidiary" (and, thereby, an
"Obligor") thereunder. <PAGE>
<PAGE>
- 60 -
(l) Adjusted Pro Forma Operating Cash Flow. Pro forma
consolidated financial statements of the Company and its
Subsidiaries demonstrating that:
(i) the ratio of Total Debt (determined after
giving effect to the making of the Term Loans and the
consummation of the other transactions to be
consummated on or prior to the Closing Date as
contemplated by this Section 6.01) to Adjusted Pro
Forma Operating Cash Flow does not exceed 5.25:1;
(ii) the ratio of Senior Debt (determined after
giving effect to the making of the Loans on the Closing
Date and the consummation of such other transactions)
to Adjusted Pro Forma Operating Cash Flow does not
exceed 4.75:1; and
(iii) Adjusted Pro Forma Operating Cash Flow is
not less than $28,000,000.
(m) Fees and Expenses. Evidence that all amounts
payable by the Company on or prior to the Closing Date in
connection with this Agreement, including without
limitation, under Sections 2.04 and 12.03 hereof, have been
paid in full (in the case of amounts payable under said
Section 12.03, to the extent that invoices therefor have
been delivered to the Company).
(n) Management Services Subordination Agreement. The
Management Services Subordination Agreement, duly executed
and delivered by Infinity and the Company.
(o) Bailee Agreements. Agreements (collectively,
"Bailee Agreements"), in form and substance satisfactory to
the Administrative Agent, between the Administrative Agent
and each of (a) First American Record Management, and (b)
Iron Mountain Records Management (collectively, the
"Bailees") whereby each Bailee acknowledges that the
Administrative Agent has a security interest in the
inventory or equipment, as applicable, located on the
premises of the Bailees and whereby each Bailee disclaims
any Lien thereon. <PAGE>
<PAGE>
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(p) Other Documents. Such other documents as the
Administrative Agent or special New York counsel to Chase
may reasonably request.
6.02 Initial Revolving Credit Loans. The obligation
of each Revolving Credit Bank to make the initial Revolving
Credit Loan to be made by it is subject to the condition
precedent that the Term Loans shall have been made or are being
made simultaneously therewith.
6.03 Initial and Subsequent Loans. The obligation of
each Bank to make each Loan to be made by it upon the occasion of
each borrowing by the Company hereunder (including the initial
borrowing) is subject to the further conditions precedent that:
(a) Both immediately prior to such borrowing and also
after giving effect thereto and to the proposed use of the
proceeds thereof: (i) no Default shall have occurred and be
continuing; and (ii) the representations and warranties made
by each Obligor in Section 7 hereof, and by each Obligor in
each of the other Basic Documents to which such Obligor is a
party, shall be true on and as of the date of such borrowing
with the same force and effect as if made on and as of such
date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
of such specific date); each notice of borrowing by the
Company hereunder shall constitute a certification by the
Company to the effect set forth in this clause (a), both as
of the date of such notice and, unless the Company otherwise
notifies the Administrative Agent prior to the date of such
borrowing, as of the date of such borrowing.
(b) The Administrative Agent shall have received a
Borrowing Notice duly completed and executed by a Senior
Officer of the Company in substantially the form of
Exhibit G hereto.
Section 7. Representations and Warranties. The
Company represents and warrants to the Banks that (and each other
Obligor represents and warrants to the Banks as to itself and its
Subsidiaries only that): <PAGE>
<PAGE>
- 62 -
7.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and
approvals necessary to own its properties and carry on its
business as now being or as proposed to be conducted; and (c) is
qualified to do business in all jurisdictions in which the nature
of the business conducted by it makes such qualification
necessary (other than in any of such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect).
7.02 Financial Condition. The consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at
November 30, 1992 and the related consolidated statements of
income, retained earnings and changes in financial position (or
of cash flow, as the case may be) of the Company and its
Consolidated Subsidiaries for the fiscal year ended on said date,
with the opinion thereon (in the case of said consolidated
balance sheet and statements) of Price Waterhouse, and the
unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at August 31, 1993 and the related
consolidated statements of income, retained earnings and changes
in financial position (or of cash flow, as the case may be) of
the Company and its Consolidated Subsidiaries for the nine-month
period ended on such date, heretofore furnished to each of the
Banks, fairly present in all material respects the consolidated
financial condition of the Company and its Consolidated
Subsidiaries as at said dates and the consolidated results of
their operations for the fiscal year and nine-month period ended
on said dates (subject, in the case of such financial statements
as at August 31, 1993, to normal year-end audit adjustments), all
in accordance with generally accepted accounting principles and
practices applied on a consistent basis. Since November 30, 1993
there has been no material adverse change in the consolidated
financial condition, operations, business or prospects taken as a
whole of the Company and its Subsidiaries from that set forth in
said financial statements as at said date.
7.03 Litigation. Except as set forth in Schedule V
hereto, there are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority
or agency, now pending or (to the knowledge of the Company) <PAGE>
<PAGE>
- 63 -
threatened against the Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
7.04 No Breach. Except as set forth in Schedule VI
hereto, none of the execution and delivery of this Agreement and
the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated and compliance with
the terms and provisions hereof and thereof will conflict with or
result in a breach of, or require any consent under, the charter
or by-laws of any Obligor, or any applicable law or regulation or
any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument
to which the Company or any of its Subsidiaries is a party or by
which any of them is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument,
except for any such conflict, breach or default that would not
have a Material Adverse Effect or (except for the Liens created
pursuant to the Security Documents) result in the creation or
imposition of any Lien (other than, except with respect to Stock
Collateral, Permitted Liens) upon any Property of the Company or
any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.
7.05 Action. Each Obligor has all necessary corporate
power and authority to execute, deliver and perform its
obligations under each of the Basic Documents to which it is a
party; the execution, delivery and performance by each Obligor of
each of the Basic Documents to which it is or is intended to be a
party have been duly authorized by all necessary corporate action
on its part; and this Agreement has been duly and validly
executed and delivered by each Obligor and constitutes, and each
of the other Basic Documents to which such Obligor is a party
when executed and delivered by such Obligor (in the case of the
Notes, for value) will constitute, its legal, valid and binding
obligation, enforceable in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any <PAGE>
<PAGE>
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governmental or regulatory authority or agency are necessary for
the making or performance by any Obligor of this Agreement or any
of the other Basic Documents to which it is or is intended to be
a party, for the consummation of the transactions contemplated
hereby or thereby, or for the validity or enforceability thereof,
except for filings with respect to the Security Documents
referred to in Section 6.01(f) hereof.
7.07 Use of Loans. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
Margin Stock and no part of the proceeds of any extension of
credit hereunder will be used to buy or carry any Margin Stock.
7.08 ERISA. The Company and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and have not
incurred any liability to the PBGC or any Plan or Multiemployer
Plan (other than to make contributions in the ordinary course of
business).
7.09 Investment Company Act. The Company is not an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended.
7.10 Public Utility Holding Company Act. The Company
is not a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
7.11 Material Agreements. Schedule III hereto is a
complete and correct list, as of the date of this Agreement, of
each credit agreement, loan agreement, indenture, purchase
agreement, guarantee or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or guarantee by,
the Company or any of its Subsidiaries the aggregate principal or
face amount of which equals or exceeds (or may equal or exceed)<PAGE>
<PAGE>
$100,000 and the aggregate principal or face amount outstanding<PAGE>
<PAGE>
- 65 -
or which may become outstanding under each such arrangement is
correctly described in said Schedule III.
7.12 Environmental Laws. The Company and each of its
Subsidiaries have obtained all permits, licenses and other
authorizations which are required under all Environmental Laws,
except to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. The
Company and each of its Subsidiaries are in compliance with the
terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code,
plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not have a Material
Adverse Effect. No notice, notification, demand, request for
information, citation, summons or order has been issued and is,
as of the Closing Date, pending, no complaint has been filed, no
penalty has been assessed and no investigation or review is
pending or threatened in writing by any governmental or other
entity with respect to any alleged failure by the Company or any
of its Subsidiaries to have any permit, license or authorization
required in connection with the conduct of the business of the
Company or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation,
discharge or disposal, or any Release of any Hazardous Materials
generated by the Company or any of its Subsidiaries.
7.13 Subsidiaries, Etc. Set forth in Schedule IV
hereto is a complete and correct list, as of the date of this
Agreement, of all Subsidiaries of the Company (and the respective
jurisdiction of incorporation of each such Subsidiary) and of all
Investments held by the Company or any of its Subsidiaries in any
Joint Venture or other Person. Except (a) as disclosed in
Schedule IV hereto, (b) prior to the Closing Date, for the Liens
created by the Existing Credit Agreement, (c) with respect to
periods after the Closing Date, for Permitted Liens of the type
described in paragraphs (b) and (c) of the definition of
"Permitted Liens" set forth in Section 1.01 hereof, and (d) for
the Liens created by the Security Documents, the Company owns,
free and clear of Liens, all outstanding shares of such<PAGE>
<PAGE>
Subsidiaries (and each such Subsidiary owns, free and clear of<PAGE>
<PAGE>
- 66 -
Liens, all outstanding shares of its Subsidiaries) and all such
shares are validly issued, fully paid and non-assessable and the
Company (or the respective Subsidiary) also owns, free and clear
of Liens, all such Investments.
7.14 Assets of the Company. Each of the Company and
its Subsidiaries has good and marketable title to all of its
Properties, free and clear of all Liens (except Liens permitted
by Section 8.06 hereof).
7.15 Agreements. None of the Company or any of its
Subsidiaries is in default under any agreement, instrument or
other document to which it is a party or by which it or its
Property is bound in any manner that could reasonably be expected
to have a Material Adverse Effect.
7.16 Solvency.
(a) The fair saleable value of the assets of the
Company exceeds and will, immediately following the making of
each Loan, exceed the amount that will be required to be paid on
or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company, as they
mature.
(b) The Company does not and will not have,
immediately following the making of each Loan, unreasonably small
capital to carry out its business as conducted or as proposed to
be conducted.
(c) The Company does not intend to, and does not
believe that it will, incur debts beyond its ability to pay such
debts as they mature.
7.17 Security Documents. The Security Documents
create, as security for the obligations purported to be secured
thereby, a valid and enforceable and, upon the filing of the
financing statements and the taking of the other steps referred
to in the last sentence of this Section 7.17, perfected, security
<PAGE>
<PAGE>
interest in and Lien on all of the Properties covered thereby in
favor of the Administrative Agent, superior to and prior to the
right of all third Persons and subject to no other Liens (except
Liens permitted by Section 8.06 hereof). The respective pledgor
or assignor is, and will be, the sole and beneficial owner (or, <PAGE>
<PAGE>
- 67 -
in the case of any leasehold interests, the lessee) and has, and
will have, good and marketable title to all such owned Properties
and a valid leasehold interest in all such leased Properties, in
each case free and clear of all Liens (except Liens permitted by
Section 8.06 hereof). No filings or recordings are required in
order to perfect the security interests created under, and/or the
Liens granted by, the Security Documents except for filings and
other steps to be taken with respect to the Liens created by the
Security Documents as contemplated thereby.
7.18 Certain Representations included in
Unistar/Infinity Transaction Documents. Each of the repre-
sentations and warranties made by the Company in Article III of
the Stock Purchase Agreement and Article II of the Securities
Purchase Agreement (other than Sections 2.14, 2.16, 2.17 and 2.19
of the Securities Purchase Agreement) are true in all material
respects on the date hereof as if made on and as of such date.
7.19 Senior Indebtedness. The Loans, when made, will
constitute "Senior Indebtedness" under and as defined in the
6-3/4% Debenture Indenture and in the 9% Debenture Indenture.
7.20 Disclosure. No information, report, financial
statement, exhibit, schedule or disclosure letter (including,
without limitation, the Proxy Statement) furnished in writing by
or on behalf of the Company or any of its Subsidiaries to the
Administrative Agent or any Bank in connection with the
negotiation, preparation or delivery of this Agreement and the
other Basic Documents or included herein or therein or delivered
pursuant hereto or thereto contains any untrue statement of
material fact or omits or omitted to state any material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All
written information furnished after the date hereof by the
Company and its Subsidiaries to the Administrative Agent and the
Banks in connection with this Agreement and the other Basic
Documents and the transactions contemplated hereby and thereby
will be true, complete and accurate in all material respects, or
(in the case of projections) based on reasonable estimates, on
the date as of which such information is stated or certified. As
of the Closing Date, there will be no fact (other than matters of
a general economic nature) known to any Obligor that could have a
Material Adverse Effect that has not been disclosed herein, in
the other Basic Documents or in a report, financial statement, <PAGE>
<PAGE>
- 68 -
exhibit, schedule, disclosure letter or other writing furnished
to the Administrative Agent for use in connection with the
transactions contemplated hereby.
7.21 Certain Documents. The Company has furnished to
the Administrative Agent and each of the Banks true and complete
copies of each of the Unistar/Infinity Transaction Documents,
each as in effect on the date hereof.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Banks and the Agents that, so long
as any Commitment or Loan is outstanding and until payment in
full of all amounts payable by the Company and the other Obligors
hereunder:
8.01 Financial Statements. The Company will deliver
to each of the Banks:
(a) as soon as available and in any event within 45
days after the end of each quarterly fiscal period of each
Fiscal Year, consolidated statements of income, retained
earnings and cash flow of the Company and its Consolidated
Subsidiaries for such period and for the period from the
beginning of such Fiscal Year to the end of such period, and
the related consolidated balance sheet as at the end of such
period, setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding
period in the preceding Fiscal Year, accompanied by a
certificate of a Senior Officer of the Company, which
certificate shall state that said financial statements
fairly present in all material respects the consolidated
financial condition and results of operations of the Company
and its Consolidated Subsidiaries in accordance with
generally accepted accounting principles, consistently
applied, as at the end of, and for, such period (subject to
normal year-end audit adjustments and the absence of
footnote disclosure);
(b) as soon as available and in any event within 90
days after the end of each Fiscal Year, consolidated
statements of income, retained earnings and cash flow of the
Company and its Consolidated Subsidiaries for such year and<PAGE>
<PAGE>
the related consolidated balance sheet as at the end of such<PAGE>
<PAGE>
- 69 -
Fiscal Year, setting forth in each case in comparative form
the corresponding consolidated figures for the preceding
Fiscal Year, and accompanied by an opinion thereon of
independent certified public accountants of recognized
national standing, which opinion shall state that said
consolidated financial statements fairly present in all
material respects the consolidated financial condition and
results of operations of the Company and its Consolidated
Subsidiaries as at the end of, and for, such Fiscal Year in
accordance with generally accepted accounting principles,
and a certificate of such accountants stating that, in
making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any
Default continuing as of the date of such certificate;
(c) promptly upon their becoming available, copies of
all registration statements and regular periodic reports, if
any, which the Company shall have filed with the Securities
and Exchange Commission (or any governmental agency
substituted therefor) or any national securities exchange;
(d) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(e) as soon as possible, and in any event within ten
days after the Company knows or has reason to believe that
any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan have occurred or exist, a
statement signed by a Senior Officer of the Company setting
forth details respecting such event or condition and the
action, if any, which the Company or an ERISA Affiliate
proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC
by the Company or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC<PAGE>
<PAGE>
has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event (provided that a<PAGE>
<PAGE>
- 70 -
failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall
be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the
termination of any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or
the receipt by the Company or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal by the
Company or any ERISA Affiliate under Section 4201
or 4204 of ERISA from a Multiemployer Plan, or the
receipt by the Company or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under
Section 4041A of ERISA; and
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company
or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days;
(f) not less than three Business Days prior to the
occurrence of any transaction or event that would give rise
to an obligation to make a prepayment of Loans pursuant to
Section 3.04(a) or (d) hereof, notice thereof describing
such transaction or event and the expected proceeds to be
received therefrom, in detail satisfactory to the
Administrative Agent;
(g) not later than the end of the first fiscal quarter
of each Fiscal Year, a budget for the Company and its<PAGE>
<PAGE>
Subsidiaries for the current Fiscal Year in detail
reasonably satisfactory to the Majority Banks, and <PAGE>
<PAGE>
- 71 -
thereafter from time to time any modification to such budget
as soon as available;
(h) promptly after the Company knows that any Default
has occurred, notice of such Default, describing the same in
reasonable detail and describing the steps being taken to
remedy the same;
(i) immediately upon becoming aware that the holder of
any note or any other evidence of Indebtedness of the
Company or any of its Subsidiaries has given notice or taken
any other action with respect to a claimed default or event
of default, a notice specifying the notice given or action
taken by such holder and the nature of the claimed default
or event of default and the steps being taken to remedy the
same;
(j) promptly upon receipt by the Company, a copy of
each report sent by the Company's independent certified
public accountants which deliver the opinion on the
Company's financial statements pursuant to clause (b) above
in connection with any annual, interim or special audit made
by them of the books of the Company or any of its
Subsidiaries, and promptly upon completion of any response
report, a copy of such response report;
(k) as soon as possible and in any event within ten
days after the Company has received any written notice or
other written communication from any governmental authority
to the effect that the Company or any of its Subsidiaries is
not in compliance with any Environmental Laws, a notice of
such circumstance describing the same in reasonable detail;
(l) at the time the Company furnishes each set of
financial statements pursuant to clause (a) or (b) above,
summaries in detail reasonably satisfactory to the
Administrative Agent of the operating revenues and operating
expenses of the Company and its Subsidiaries; and
(m) promptly, from time to time, such other
information regarding (i) the business, affairs, operations
or conditions (financial or otherwise) of the Company or any
of its Subsidiaries, (ii) compliance by the Company with its
obligations contained in the Basic Documents and the <PAGE>
<PAGE>
- 72 -
Unistar/Infinity Transaction Documents and (iii) the other
transactions contemplated hereby, in each case as any Bank
or the Administrative Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a Senior Officer of the Company (i) to
the effect that no Default has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same
in reasonable detail and describing the action that the Company
has taken and proposes to take with respect thereto) and
(ii) setting forth in reasonable detail the computations or other
information necessary to determine whether the Company is in
compliance with Sections 3.04, 8.05, 8.06, 8.07, 8.08, 8.10 and
8.11 hereof.
8.02 Litigation. The Company will promptly give to
each Bank notice of all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority
or agency, and any material development in respect of such legal
or other proceedings, affecting the Company or any of its
Subsidiaries, except proceedings which, if adversely determined,
could not reasonably be expected to have a Material Adverse
Effect.
8.03 Existence, Etc. The Company will, and will cause
each of its Subsidiaries to: (a) preserve and maintain its legal
existence and all of its material rights, privileges and
franchises (provided that nothing in this Section 8.03 shall
prohibit any transaction expressly permitted by Section 8.12
hereof); (b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements would
have a Material Adverse Effect; (c) pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or
on its income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against
which adequate reserves (determined in accordance with GAAP) are
being maintained; (d) maintain all of its Properties used or
useful in its business in good working order and condition,
ordinary wear and tear excepted; and (e) permit representatives<PAGE>
<PAGE>
of any Bank or the Administrative Agent, during normal business <PAGE>
<PAGE>
- 73 -
hours, to examine, copy and make extracts from its books and
records, to inspect its Properties, and to discuss its business
and affairs with its officers, all to the extent reasonably
requested by such Bank or the Administrative Agent (as the case
may be).
8.04 Insurance. The Company will, and will cause each
of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by
corporations engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations.
8.05 Capital Expenditures. The Company will not
permit the aggregate amount of Capital Expenditures in any Fiscal
Year to exceed the sum of (a) $2,000,000 plus (b) for each Fiscal
Year commencing on and after December 1, 1994, the excess, if
any, of the aggregate amount of Capital Expenditures permitted in
the immediately preceding Fiscal Year over the actual amount of
Capital Expenditures made by the Company and its Consolidated
Subsidiaries in such immediately preceding Fiscal Year (provided
that the amount of such excess for such immediately preceding
Fiscal Year shall not exceed $2,000,000).
8.06 Liens. The Company will not, and will not permit
any of its Subsidiaries to, create, incur or suffer to exist
(a) any Lien on or in respect of any of the Stock Collateral
except (i) Liens created pursuant to the Security Documents,
(ii) prior to the Closing Date, Liens created pursuant to the
Existing Credit Agreement and (iii) with respect to periods after
the Closing Date, for Permitted Liens of the type described in
paragraphs (b) and (c) of the definition of "Permitted Liens" set
forth in Section 1.01 hereof, or (b) any Lien on or in respect of
any of its other Properties now owned or hereafter acquired,
securing Indebtedness or other obligations, except (i) Liens
created pursuant to the Security Documents, (ii) Permitted Liens,
(iii) prior to the Closing Date, Liens created pursuant to the
Existing Credit Agreement, and (iv) Liens upon real and/or
tangible personal Property acquired after the date hereof (by
purchase, construction or otherwise) by the Company or any of its
Subsidiaries, each of which Liens either (x) existed on such
Property before the time of its acquisition and was not created<PAGE>
<PAGE>
in anticipation thereof or (y) was created solely for the purpose <PAGE>
<PAGE>
- 74 -
of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of
construction) of such Property, provided that no such Lien shall
extend to or cover any Property of the Company or any of it
Subsidiaries other than the Property so acquired and/or
improvements thereon.
8.07 Indebtedness, Etc.
(a) The Company will not, and will not permit any of
its Subsidiaries to, create, assume, incur or suffer to exist any
Indebtedness except:
(i) Indebtedness of the Company and its Subsidiaries
under this Agreement, the Notes or any of the Security
Documents;
(ii) until the Closing Date, Indebtedness of the
Company under the Existing Credit Agreement;
(iii) the 6-3/4% Debentures;
(iv) Capital Lease Obligations and Indebtedness of the
Company and its Subsidiaries secured by Liens permitted
under Section 8.06(b)(iv) hereof up to but not exceeding
$2,000,000 at any one time outstanding;
(v) Indebtedness of the Company's Subsidiaries in
respect of the loans and advances referred to in
Section 8.08(d)(ii) hereof;
(v) additional Indebtedness of the Company up to but
not exceeding $5,000,000 at any one time outstanding; and
(vi) Interest Rate Protection Agreements entered into
pursuant to Section 8.13 hereof.
(b) The Company will not permit the aggregate
outstanding face amount of the 9% Debentures to exceed (i)
$18,500,000 during the period commencing on the Closing Date and
ending on the 90th day thereafter, and (ii) $0 from and after
such 90th day. <PAGE>
<PAGE>
- 75 -
8.08 Investments and Joint Ventures. The Company will
not, and will not permit any of its Subsidiaries to, make or
permit to remain outstanding any other Investment in any Person
or enter into any Joint Venture, except:
(a) Investments of the Company and its Subsidiaries in
direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed as to principal
and interest by the United States of America, or any agency
thereof, in each case maturing no more than 90 days from the
date of acquisition thereof;
(b) the Company or any of its Subsidiaries may acquire
and hold certificates of deposit and other time deposits of,
and bankers' acceptances (provided that such time deposit or
bankers' acceptance shall mature within one year after the
date so acquired), and other bank accounts with, any Bank or
any other bank having capital and surplus of at least
$500,000,000;
(c) the Company or any of its Subsidiaries may acquire
and hold commercial paper (i) issued by any bank holding
company controlling any Bank or (ii) rated A-2 or better by
Standard & Poor's Corporation or P-2 or better by Moody's
Investors Service, Inc.;
(d) (i) existing Investments of the Company or any of
its Subsidiaries in their respective existing Subsidiaries
and the Unistar Acquisition, and (ii) additional Investments
by the Company or any of its Subsidiaries in the ordinary
course of business in the form of loans and advances to
their respective Subsidiaries, provided that such loans and
advances are evidenced by promissory notes and such
promissory notes are delivered to the Administrative Agent
under the Security Agreement as collateral security for the
Secured Obligations (as defined in the Security Agreement)
promptly upon the making of the related loan or advance,
such promissory notes to constitute Pledged Debt under and
as defined in the Security Agreement;
(e) Investments in the form of Acquisitions permitted
by Section 8.12(b)(ii) hereof; <PAGE>
<PAGE>
- 76 -
(f) existing Investments and Joint Ventures of the
Company and its Subsidiaries listed on Schedule IV hereto;
(g) additional Investments and Joint Ventures of the
Company and its Subsidiaries up to but not exceeding
$1,000,000 in the aggregate at any one time outstanding
minus the aggregate amount of Acquisitions made from and
after the date hereof under Section 8.12(b)(i) hereof;
(h) loans or advances to officers and employees by the
Company or any of its Subsidiaries for travel, business or
relocation expenses in the ordinary course of business; and
(i) Investments in money market funds substantially
all of whose assets consist of Investments permitted by
clauses (a), (b) and (c) of this Section 8.08.
8.09 Restricted Payments. The Company will not, and
will not permit any of its Subsidiaries to, make any Restricted
Payment, except for:
(a) the conversion of 9% Debentures into shares of
common stock (and cash payments for fractional shares of
such common stock of the Company in connection therewith),
or the redemption or retirement of the 9% Debentures on
terms which have substantially the same economic effect for
the Company as a conversion thereof in accordance with the
terms of the 9% Debenture Indenture;
(b) the conversion of the 6-3/4% Debentures into shares
of common stock of the Company (and cash payments for
fractional shares of such common stock in connection
therewith) in accordance with the terms of the 6-3/4%
Debenture Indenture;
(c) subject to the subordination provisions applicable
thereto, cash payments by the Company of principal of and
interest on the Subordinated Debt (but only in the amounts
and at the times required to be made by the terms thereof);
(d) payments by the Company in respect of the
repurchase by the Company of any capital stock, or Equity
Rights therefor, issued to employees of the Company, in an<PAGE>
<PAGE>
aggregate amount not exceeding the sum of (i) $250,000<PAGE>
<PAGE>
- 77 -
during any Fiscal Year (but not exceeding $2,000,000 in the
aggregate), and (ii) the net proceeds of issuances of
capital stock to employees of the Company after the Closing
Date;
(e) with respect to each Equity Issuance after the
date hereof, other Restricted Payments by the Company in an
amount not exceeding (i) 50% of the net proceeds of such
Equity Issuance minus (ii) the aggregate amount of
Acquisitions made under Section 8.12(b)(ii) hereof with
proceeds from such Equity Issuance, provided that (x) both
prior to and after giving effect to each such Restricted
Payment, no Default shall have occurred and be continuing,
and (y) no such Restricted Payment shall be made prior to
the prepayment required to be made under Section 3.04(d)
hereof with respect to such Equity Issuance;
(f) (i) the issuance and delivery to INI of Incentive
Warrants pursuant to Section 2.3 of the Management
Agreement, and (ii) subject in each case to the terms of the
Management Services Subordination Agreement and provided
that, both prior to and after giving effect to each such
payment, no Default shall have occurred and be continuing:
(x) cash payments of Management Fees to Infinity
at the times and in the amounts provided for by
Section 2.1 of the Management Agreement in respect of
each Fiscal Year; and
(y) a cash payment of Management Fees to Infinity
at the times and in the amounts provided for by
Section 2.2 of the Management Agreement, so long as:
(1) at least three Business Days (but not
more than 30 Business Days) prior to the date of
such payment, the Company shall have delivered to
the Administrative Agent the financial statements
required to be delivered for such Fiscal Year
pursuant to Section 8.01(b) hereof and a
certificate of a Senior Officer of the Company
setting forth a computation of the Excess Cash
Flow for the prior Fiscal Year and describing the
amount of such Management Fees to be paid; and <PAGE>
<PAGE>
- 78 -
(2) such payment shall be made promptly
following any prepayment required to be made under
Section 3.04(c) hereof with respect to Excess Cash
Flow for such prior Fiscal Year; and
(g) payments by the Company to redeem the Company's
outstanding Class Action Warrants when and to the extent
required by the terms thereof.
8.10 Debt Ratios.
(a) Senior Debt Ratio. The Company will not permit
the Senior Debt Ratio, at the Closing Date and at any
Quarterly Date occurring during any period specified below,
to exceed the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Period (both dates inclusive) Ratio
_____________________________ _____
<C> <C>
Closing Date to 5/31/95 4.75:1
6/1/95 to 8/31/95 4.50:1
9/1/95 to 2/29/96 4.25:1
3/1/96 to 8/31/96 3.75:1
9/1/96 to 8/31/97 3.25:1
Thereafter 3.00:1
</TABLE>
(b) Total Debt Ratio. The Company will not permit the
Total Debt Ratio, at the Closing Date and at any Quarterly
Date occurring during any period specified below, to exceed
the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Period (both dates inclusive) Ratio
_____________________________ _____
<C> <C>
Closing Date to 5/31/95 5.25:1
6/1/95 to 8/31/95 5.00:1
9/1/95 to 2/29/96 4.75:1
3/1/96 to 8/31/96 4.25:1<PAGE>
<PAGE>
9/1/96 to 8/31/97 3.75:1
Thereafter 3.00:1
</TABLE>
(c) Fixed Charges Ratio. The Company will not permit
the Fixed Charges Ratio to be less than 1.10 to 1.00 on the<PAGE>
<PAGE>
- 79 -
Closing Date and any Quarterly Date occurring after the
Closing Date.
8.11 Total Interest Coverage Ratio; Total Pro Forma
Debt Service Coverage Ratio.
(a) Total Interest Coverage Ratio. The Company will
not permit the Total Interest Coverage Ratio, at the Closing
Date and at any Quarterly Date occurring during any period
specified below, to be less than the ratio set forth
opposite such period:
<TABLE>
<CAPTION>
Period (both dates inclusive) Ratio
_____________________________ _____
<C> <C>
Closing Date to 11/30/94 2.00:1
12/1/94 to 11/30/95 2.25:1
12/1/95 to 11/30/96 2.50:1
Thereafter 3.00:1
</TABLE>
(b) Total Pro Forma Debt Service Coverage Ratio. The
Company will not permit the Total Pro Forma Debt Service
Coverage Ratio to be less than 1.15:1 on the Closing Date
and any Quarterly Date occurring after the Closing Date.
8.12 Prohibition of Fundamental Changes
(a) The Company will not, and will not permit any of
its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution).
(b) The Company will not, and will not permit any of
its Subsidiaries to, effect any Acquisition or create or Acquire
any new Subsidiary other than Unistar and other than:
(i) Acquisitions which, together with the Investments<PAGE>
<PAGE>
permitted by Section 8.08(g) hereof, do not exceed
$1,000,000 in the aggregate, and
(ii) with respect to each Equity Issuance after the
date hereof, Acquisitions by the Company in an amount not
exceeding (1) 50% of the net proceeds of such Equity
Issuance minus (2) the aggregate amount of Restricted <PAGE>
<PAGE>
- 80 -
Payments made under Section 8.09(e) hereof with proceeds
from such Equity Issuance, provided that:
(x) both prior to and after giving effect to each
such Acquisition, no Default shall have occurred and be
continuing,
(y) no such Acquisition shall be made prior to the
prepayment required to be made under Section 3.04(d)
hereof with respect to such Equity Issuance, and
(z) each business, group of assets or Person so
Acquired shall have Operating Cash Flow for the twelve
months ended on or most recently ended prior to the
date of such Acquisition of at least $1; and
(c) The Company will not, and will not permit any of
its Subsidiaries to, convey, sell, lease, transfer or otherwise
Dispose of, in one transaction or a series of transactions, all
or any substantial part of its business, all or any part of its
tangible personal Property, all or any part of its trademarks,
copyrights, programming or other intangible personal Property, or
all or any substantial part of its real property, whether now
owned or hereafter acquired, except for Dispositions by the
Company and its Subsidiaries to each other and except that the
Company and/or any Subsidiary may Dispose of (i) any inventory or
other Property in the ordinary course of business and on ordinary
business terms, (ii) obsolete or worn-out Property, tools or
equipment no longer used or useful in its business, (iii) KM
Records, Inc. and (iv) other Property in an aggregate amount not
exceeding $500,000 in any Fiscal Year.
8.13 Interest Rate Protection Agreements. The Company
will from time to time enter into and maintain in full force and
effect Interest Rate Protection Agreements with one or more of
the Banks (and/or with other counterparties reasonably
satisfactory to the Majority Banks), pursuant to documentation
and on terms reasonably satisfactory to the Majority Banks, which
effectively enable the Company, as at any date (commencing no
later than 90 days after the Closing Date), to protect itself
against fluctuations in the rates of interest on the Loans as to
a notional principal amount at least equal to 50% of the Loans
then outstanding for a period of at least three years from such<PAGE>
<PAGE>
date.<PAGE>
<PAGE>
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8.14 Sale or Discount of Receivables. The Company
will not, and will not permit any of its Subsidiaries to,
discount or sell with recourse, or sell for less than the greater
of the face value or market value thereof, any of its notes
receivable or accounts receivable.
8.15 Lines of Business. The Company will not, and
will not permit any of its Subsidiaries to, engage, directly or
indirectly, in any business other than producing and
distributing radio programs, sales of advertising time, and
supporting activities related thereto.
8.16 Transactions With Affiliates. The Company will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, (a) make any Investment in an Affiliate,
(b) transfer, sell, lease, assign or otherwise dispose of any
assets to an Affiliate, (c) merge or consolidate with or purchase
or acquire any assets from an Affiliate, (d) Guarantee or assume
any obligations of an Affiliate or (e) enter into any other
transaction directly or indirectly with or for the benefit of an
Affiliate; provided that (i) any Affiliate who is an individual
may serve as a director, officer or employee of the Company and
its Subsidiaries and receive reasonable compensation or
indemnification in connection with his or her services in such
capacity, (ii) the Company or any of its Subsidiaries may enter
into any transaction with an Affiliate in the ordinary course of
business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company
or such Subsidiary as the monetary or business consideration
which would obtain in a comparable arm's length transaction with
a Person not an Affiliate and (iii) subject to Section 1.7 of the
Management Agreement, nothing herein shall be deemed to prohibit
the Company from engaging in the transactions contemplated by the
Unistar/Infinity Transaction Documents.
8.17 Use of Proceeds. The Company will use the
proceeds of the Loans solely for the following purposes: (a) the
proceeds of the Term Loans will be used solely (i) to finance the
Unistar Acquisition and the payment of Restructuring Expenses,
(ii) to repay the Indebtedness outstanding under the Existing
Credit Agreement and the Retained Unistar Debt and other amounts
owing in respect thereof and (iii) for general corporate purposes
<PAGE>
<PAGE>
of the Company and its Subsidiaries, and (b) the proceeds of the <PAGE>
<PAGE>
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Revolving Credit Loans will be used for general corporate
purposes of the Company and its Subsidiaries.
8.18 Certain Obligations Respecting Subsidiaries. The
Company will, and will cause each of its Subsidiaries to, take
such action from time to time as shall be necessary to ensure
that (a) the Company at all times following the Closing Date owns
(subject only to the Lien of the Security Agreement) all of the
Unistar Shares and (b) except as permitted by Section 8.12
hereof, the Company and each of its other Subsidiaries at all
times owns (subject only to the Lien of the Security Agreement)
at least the same percentage of the issued and outstanding shares
of each class of stock of each of its other Subsidiaries as is
owned by it on the date of this Agreement. Without limiting the
generality of the foregoing, none of the Company nor any of its
Subsidiaries shall sell, transfer or otherwise Dispose of any
shares of stock of any Subsidiary owned by them, nor permit any
such Subsidiary to issue any shares of stock of any class
whatsoever to any Person (other than to the Company or to another
Obligor). In the event that (a) any such additional shares of
stock shall be issued by any such Subsidiary or (b) any Obligor
shall create or Acquire any new Subsidiary (subject to
Section 8.12(b) hereof) and shall thereby become the owner of
shares of capital stock of such Subsidiary, in each case, the
respective Obligor agrees forthwith to deliver to the
Administrative Agent, pursuant to the Security Agreement, the
certificates evidencing such shares of stock, accompanied by
undated stock powers executed in blank and shall take such other
action as the Administrative Agent shall request to perfect the
security interest created therein pursuant to the Security
Agreement (and each of the Banks hereby authorizes the
Administrative Agent to take such action, and to execute such
documents and other instruments, as may be necessary to give
effect to the creation and perfection of such security
interests).
8.19 Modifications of Certain Documents; Subordinated
Debt.
(a) The Company will not, without the prior consent of
the Majority Banks, (i) waive, amend or otherwise modify any
provision of any of the Subordinated Debt Documents, (ii) waive,
amend or otherwise modify any provision of any of the
Unistar/Infinity Transaction Documents in any manner that could <PAGE>
<PAGE>
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have a material adverse effect on the Banks, or (iii) waive,
amend or otherwise modify any provision of the Class Action
Warrants in any manner that is materially adverse to the Company.
(b) The Company will not, and will not permit any
Subsidiary to, amend or otherwise modify any provision of its
charter or by-laws in any manner that would have a material
adverse effect on the Banks without the prior consent of the
Majority Banks.
(c) Except as permitted by Sections 8.09(a) and
8.09(b) hereof, the Company will not, without the prior consent
of the Majority Banks, exercise any option or right under any of
the Subordinated Debt Documents to prepay, redeem, defease, or to
make any payment the effect of which is to prepay, redeem or
defease, any of the Subordinated Debt.
(d) The Company will at all times exercise its option
under Section 1402 of the 6-3/4% Debenture Indenture (and take
all action as shall be necessary to give effect to such exercise)
to apply all 6-3/4% Debentures that shall have been redeemed or
converted on or prior to the Closing Date as a credit against the
mandatory sinking fund payments required from time to time by
said Indenture.
Section 9. Guarantee
9.01 Guarantee. Each of the Subsidiary Guarantors
hereby jointly and severally guarantees to each of the Banks and
the Agents and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by
acceleration, by mandatory or optional prepayment or otherwise)
of (a) the principal of and interest on the Loans made by the
Banks to, and the Note held by each Bank of, the Company and all
other amounts from time to time owing to the Banks or the
Administrative Agent by the Company under this Agreement and
under the Notes and by each of the Obligors under each of the
other Basic Documents, and (b) all obligations of the Company to
any Bank in respect of Interest Rate Protection Agreements
entered into by the Company and such Bank pursuant to
Section 8.13 hereof, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called<PAGE>
<PAGE>
the "Guaranteed Obligations"). Each of the Subsidiary Guarantors <PAGE>
<PAGE>
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hereby further jointly and severally agrees that if any of the
Guaranteed Obligations shall not be paid in full when due
(whether at stated maturity, by acceleration, by mandatory or
optional prepayment or otherwise), such Subsidiary Guarantor will
promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such
extension or renewal.
9.02 Obligations Unconditional. The obligations of
each of the Subsidiary Guarantors under Section 9.01 hereof are
absolute and unconditional, joint and several, irrespective of
the value, genuineness, validity, regularity or enforceability of
the obligations of any other Obligor under this Agreement or any
other Basic Document or any substitution, release or exchange of
any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which
might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this
Section 9.02 that the obligations of the each of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint
and several, under any and all circumstances. Without limiting
the generality of the foregoing, it is agreed that, to the extent
permitted by applicable law, the occurrence of any one or more of
the following shall not affect the liability of any of the
Subsidiary Guarantors under this Section 9:
(i) at any time or from time to time, without notice
to such Subsidiary Guarantor, the time for any performance
of or compliance with any of its Guaranteed Obligations
shall be extended, or such performance or compliance shall
be waived;
(ii) any of the acts mentioned in any of the provisions
of this Agreement or any other Basic Document shall be done
or omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations<PAGE>
<PAGE>
shall be modified, supplemented or amended in any respect,
or any right under this Agreement or any other Basic<PAGE>
<PAGE>
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Document shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt
with; or
(iv) any lien or security interest granted as security
for any of the Guaranteed Obligations shall fail to be
perfected.
Each of the Subsidiary Guarantors hereby expressly waives
diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that any of the Agents
and the Banks exhaust any right, power or remedy or proceed
against any other Obligor under this Agreement or any other Basic
Document or against any other Person under any other guarantee
of, or security for, any of such Subsidiary Guarantor's
Guaranteed Obligations.
9.03 Reinstatement. The obligations of each of the
Subsidiary Guarantors under this Section 9 shall be automatically
reinstated if and to the extent that for any reason any payment
by or on behalf of any other Subsidiary Guarantor in respect of
any of the Obligor's Guaranteed Obligations is rescinded or must
be otherwise restored by any holder of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise and each of the Obligors jointly
and severally agrees that it will indemnify each of the Agents
and the Banks on demand for all reasonable costs and expenses
(including, without limitation, fees of counsel) incurred by such
Agent or such Bank in connection with such rescission or
restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
9.04 Subrogation. Each of the Subsidiary Guarantors
hereby jointly and severally agrees that until the payment and
satisfaction in full of all of the Guaranteed Obligations and the
expiration and termination of all Commitments under this
Agreement it shall not exercise any right or remedy arising by
reason of any performance by it of its guarantee in Section 9.01
hereof, whether by subrogation or otherwise, against any other<PAGE>
<PAGE>
Obligor or any other guarantor of any of the Guaranteed <PAGE>
<PAGE>
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Obligations or any security for any of such Guaranteed
Obligations.
9.05 Remedies. Each of the Subsidiary Guarantors
jointly and severally agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Agents and the Banks, on the
other hand, the obligations of the Company under this Agreement
and the Notes may be declared to be forthwith due and payable as
provided in Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in
said Section 10) for purposes of Section 9.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by such Subsidiary Guarantor for
purposes of said Section 9.01.
9.06 Continuing Guarantee. The guarantee in this
Section 9 is a continuing guarantee, and shall apply to all
Guaranteed Obligations of each of the Subsidiary Guarantors
whenever arising.
9.07 Rights of Contribution. The Subsidiary
Guarantors hereby agree, as between themselves, that if any of
them (an "Excess Funding Guarantor") shall pay any Guaranteed
Obligations under Section 9.01 hereof in excess of such Excess
Funding Guarantor's Pro Rata Share (as hereinafter defined) of
such Guaranteed Obligations, the other such Obligors shall, on
demand (but subject to the next sentence hereof), pay to such
Excess Funding Guarantor an amount equal to their respective Pro
Rata Shares of such Excess Funding Guarantor's payment. The
payment obligation of each of such Subsidiary Guarantors to any
Excess Funding Guarantor under this Section 9.07 shall be
subordinate and subject in right of payment to the prior payment
in full of the obligations of such Obligor under the other
provisions of this Section 9 and such Excess Funding Guarantor
shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such
obligations. For the purposes hereof, "Pro Rata Share" shall
mean, for any Subsidiary Guarantor, a percentage equal to the<PAGE>
<PAGE>
percentage that the excess of the fair value of its assets as at <PAGE>
<PAGE>
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December 31, 1993 over the amount of its liabilities (including
contingent liabilities) as at such date is of the excess of the
aggregate value of the assets of all other Subsidiary Guarantors
as at such date over their aggregate liabilities (including
contingent liabilities) as at such date.
9.08 Limitation on Subsidiary Obligor Obligations. In
any action or proceeding involving any State corporate law, or
any State or Federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the
obligations of any of the Subsidiary Guarantor under Section 9.01
hereof would otherwise, taking into account the provisions of
Section 9.07 hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under said
Section 9.01, then, notwithstanding any other provision hereof to
the contrary, the amount of such liability shall, without any
further action by Subsidiary Guarantor, any Bank, the Agents or
any other Person, be automatically limited and reduced to the
highest amount which is valid and enforceable and not
subordinated to the claims of other creditors as determined in
such action or proceeding.
Section 10. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) The Company shall default in the payment or
prepayment when due of any principal of or interest on any
Loan; or the Company shall default in the payment of any fee
or any other amount payable by it hereunder which shall
remain unremedied for a period of three days; or the Company
shall default in the payment of any fee or other amount
payable by it under the Security Documents for a period of
five days after notice from the intended recipient of such
fee or other amount; or
(b) The Company or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on any of its other Indebtedness aggregating
$250,000 or more beyond any applicable grace periods, or in
the payment when due of any amount under any Interest Rate
Protection Agreement for a notional principal amount <PAGE>
<PAGE>
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exceeding $1,000,000; or the Company shall become obligated
to purchase or otherwise acquire, prior to the stated
maturity thereof, any of its other Indebtedness aggregating
$250,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or
relating to any such Indebtedness or any event specified in
any Interest Rate Protection Agreement shall occur if the
effect of such other event is to cause, or would (after
giving effect to any applicable notice requirement or grace
period) permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders)
to cause, such Indebtedness to become due, or to be prepaid,
purchased or otherwise acquired in full (whether by
redemption, purchase, offer to purchase or otherwise), prior
to its stated maturity or, in the case of an Interest Rate
Protection Agreement, to permit the payments owing under
such Interest Rate Protection Agreement to be liquidated; or
(c) Any representation, warranty or certification made
or deemed made in any Basic Document (or in any modification
or supplement thereto) by any Obligor, or any certificate
furnished to any Bank or any of the Agents pursuant to the
provisions thereof, shall prove to have been false or
misleading as of the time made or furnished in any material
respect; or
(d) The Company shall default in the performance of
any of its obligations under any of Sections 8.05, 8.07,
8.08, 8.09, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.17, 8.18
or 8.19 hereof; or the Company shall default in the
performance of any of its obligations under Section 8.06 or
8.16 hereof and such default shall continue unremedied for a
period of 15 days; or any Obligor shall default in the
performance of any of its obligations, under this Agreement
or any other Basic Document which imposes on it a monetary
obligation and such default shall remain unremedied for a
period of three days; or, except as otherwise provided in
this paragraph (d), any Obligor shall default in the
performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall
continue unremedied for a period of 30 days after such
Obligor obtains actual knowledge thereof or after notice
thereof to the Company by any Agent or any Bank (through any
Agent); or <PAGE>
<PAGE>
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(e) The Company or any of its Subsidiaries shall admit
in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or
(f) The Company or any of its Subsidiaries shall
(i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (v) fail to controvert
in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Company or any of its
Subsidiaries, in any court of competent jurisdiction,
seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of the Company or such Subsidiary or
of all or any substantial part of its assets, or
(iii) similar relief in respect of the Company or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or
an order for relief against the Company or such Subsidiary
shall be entered in an involuntary case under the Bankruptcy
Code; or
(h) A final judgment or judgments for the payment of
money in excess of $250,000 in the aggregate shall be
rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company and/or
any of its Subsidiaries and the same shall not be discharged
(or provision shall not be made for such discharge), or a <PAGE>
<PAGE>
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stay of execution thereof shall not be procured, within 30
days from the date of entry thereof and the Company or the
relevant Subsidiary shall not, within said period of 30
days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur
or in the opinion of the Majority Banks shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan
or PBGC (or any combination of the foregoing) which would
constitute, in the reasonable judgment of the Majority
Banks, a Material Adverse Effect; or
(j) Except for expiration in accordance with its
terms, any of the Security Documents shall be terminated or
shall cease to be in full force and effect, for whatever
reason; or shall cease to give the Administrative Agent the
Liens, rights, powers and privileges purported to be created
thereby (including without limitation a prior perfected
security interest in and Lien on all of the Properties
covered thereby in accordance with the terms thereof) in
favor of the Administrative Agent, subject to no equal or
prior Liens (except as permitted thereby); or
(k) the Management Agreement shall be terminated or
otherwise cease to be in full force and effect, or the Company is
or becomes entitled to terminate the Management Agreement under
Section 3.2(b)(ii) thereof; or
(l) (i) less than one-third of the members of the Board
of Directors of the Company shall be persons designated by
INI, or (ii) from and after the 90th day following the
Closing Date, less than a majority of the members of the
Board of Directors of the Company shall be designated by INI
or persons designated in the manner provided in Section 1(a)
of the Voting Agreement; or
(m) any 9% Debentures shall remain outstanding on or
after the 90th day following the Closing Date; <PAGE>
<PAGE>
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THEREUPON: (i) in the case of an Event of Default other than an
Event of Default with respect to the Company referred to in
clause (f) or (g) of this Section 10 the Administrative Agent may
and, upon request of the Majority Banks, shall, by notice to the
Company, cancel all of the Commitments then in effect and declare
the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts owing by the Company
to the Administrative Agent, the Co-Agents and the Banks under
this Agreement and under the Notes to be forthwith due and
payable, whereupon such amounts shall be immediately due and
payable, without presentment, demand, protest or other
formalities of any kind all of which are hereby expressly waived
by the Obligors and (ii) in the case of the occurrence of an
Event of Default with respect to the Company referred to in
clause (f) or (g) of this Section 10, the Commitments forthwith
shall be automatically canceled and the principal amount then
outstanding of, and the accrued interest on, the Loans and all
other amounts payable by the Company under this Agreement and the
Notes shall become automatically immediately due and payable,
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor.
Section 11. The Agents
11.01 Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Administrative
Agent to act as its agent hereunder and under the other Basic
Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the
other Basic Documents, together with such other powers (if any)
as are reasonably incidental thereto. None of the Co-Agents, in
their capacity as Co-Agents, shall have any duties or
responsibilities under this Agreement or any fiduciary
relationship with the Administrative Agent, or any Bank, and no
implied covenants, functions, responsibilities, duties or
liabilities shall be read into this Agreement or any other Basic
Document or otherwise exist against any Co-Agent in its capacity
as Co-Agent hereunder. No Agent (which term, either in the
singular or the plural, as used in this sentence and in
Section 11.05 and the first sentence of Section 11.06 hereof
shall include reference to such Agent's affiliates and its own
and its affiliates' officers, directors, employees and agents):
(a) shall have any duties or responsibilities except those <PAGE>
<PAGE>
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expressly set forth in the Basic Documents with respect to such
Agent (if any); (b) shall by reason of any Basic Document be a
trustee for any of the Banks or the other Agents; (c) shall be
responsible to any of the Banks or the other Agents for any
recitals, statements, representations or warranties contained in
any Basic Document, or in any certificate or other document
referred to or provided for in, or received by it under any Basic
Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Basic Document or any other
document referred to or provided for herein or therein or for any
failure by any Obligor or any other Person to perform any of its
obligations hereunder or thereunder; (d) except as expressly
required by any Basic Document, shall be required to initiate or
conduct any litigation or collection proceedings under any Basic
Document; or (e) shall be responsible for any action taken or
omitted to be taken by it under any Basic Document or under any
other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its
own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each of the Agents shall be
conclusively entitled to assume that the conditions precedent set
forth in Section 6 hereof have been satisfied unless such Agent
has received a notice to the effect that any of such conditions
have not been satisfied from either the Majority Banks or, if the
related borrowing is of a Term Loan, the Majority Term Loan
Banks, or, if the related borrowing is of a Revolving Credit
Loan, the Majority Revolving Credit Banks, in each case referring
to the relevant subsection(s) and stating that the relevant
condition(s) have not been satisfied or unless the Company so
notifies such Agent. Each Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected by
such Agent in good faith. Each Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof
unless and until a notice of the assignment or transfer thereof
shall have been filed with the Administrative Agent, together
with a notice of such assignment or transfer to the Company.
Each of the Banks hereby irrevocably authorizes the
Administrative Agent to execute, deliver and/or perform each of
the Security Documents. The Administrative Agent is hereby
authorized to determine whether the cost to the Obligors is
disproportionate to the benefit to be realized by the Banks by
perfecting a Lien in any given Property, or whether any given
Property is immaterial or of inconsequential value, and if the<PAGE>
<PAGE>
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Administrative Agent makes any such determination the applicable
Obligor(s) shall not be required to perfect a Lien on such
Property in favor of the Administrative Agent.
11.02 Reliance by Each Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in
accordance with instructions given by the Majority Banks or, if
and to the extent required hereby or by any other Basic Document,
in accordance with instructions given by all of the Banks, the
Majority Term Loan Banks and/or the Majority Revolving Credit
Banks, as the case may be, and such instructions of such Banks
and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks or, if applicable, on all of the Term
Loan Banks and/or Revolving Credit Banks, as the case may be.
11.03 Defaults.
(a) No Agent shall be deemed to have knowledge or
notice of the occurrence of a Default (except, in the case of the
Administrative Agent only) unless it has received notice from
another Agent, a Bank or the Company specifying such Default and
stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the
occurrence of a Default, it shall give prompt notice thereof to
the Banks.
(b) The Administrative Agent shall (subject to
Sections 11.01, 11.05 and 11.07 hereof) take such action with
respect to any Default as shall be directed by the Majority
Banks, or, if and to the extent required herein or in any other
Basic Document, all of the Banks, the Majority Term Loan Banks
and/or the Majority Revolving Credit Banks, as the case may be,
provided that, unless and until the Administrative Agent shall<PAGE>
<PAGE>
have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from <PAGE>
<PAGE>
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taking such action, with respect to such Default as it shall deem
advisable in the best interest of all of the Banks, except to the
extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the agreement or consent of the
Majority Banks, the Majority Term Loan Banks, the Majority
Revolving Credit Banks or all of the Banks.
11.04 Rights as a Bank. With respect to its
Commitment(s) and the Loans made by it, each Agent (and any
successor to any Agent) in its capacity as a Bank hereunder or
under any Basic Document shall have the same rights and powers
hereunder or thereunder as any other Bank and may exercise the
same as though it were not acting as an Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates,
include each Agent in its individual capacity. Each Agent (and
any successor to any Agent) and its affiliates may (without
having to account therefor to any Bank) accept deposits from,
lend money to and generally engage in any kind of banking, trust
or other business with any of the Obligors (and any of their
Subsidiaries or Affiliates) as if it were not acting as an Agent,
and each Agent and its affiliates may accept fees and other
consideration from any of the Obligors for services in connection
with this Agreement or otherwise without having to account for
the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify
the Administrative Agent (to the extent not reimbursed under
Section 12.03 hereof, but without limiting the obligations of the
Company under said Section 12.03) ratably in accordance with the
aggregate principal amount of the Loans and, if any of the
Commitments are then in effect, the aggregate unused amount of
such Commitments held by the Banks, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent (including by any Bank) arising
out of or by reason of any investigation or any way relating to
or arising out of this Agreement or any other Basic Document or
any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby (including,
without limitation, the costs and expenses which the Company is
obligated to pay under Section 12.03 hereof, but excluding,
unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of<PAGE>
<PAGE>
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its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided
that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
11.06 Non-Reliance on Agents and Other Banks. Each
Bank agrees that it has, independently and without reliance on
any Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon any Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the
other Basic Documents. No Agent shall be required to keep itself
informed as to the performance or observance by any Obligor or
other party of this Agreement or any of the other Basic Documents
or any other document referred to or provided for herein or
therein or to inspect the Properties or books of the Company or
any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to
the Banks by the Administrative Agent hereunder, no Agent shall
have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial
condition or business of the Company or any of its Subsidiaries
(or any of their affiliates) which may come into the possession
of such Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly
required of the Administrative Agent hereunder and under the
other Basic Documents, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its
satisfaction from the Banks of their indemnification obligations
under Section 11.05 hereof against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action.
11.08 Resignation or Removal of Agents. Subject to
the appointment and acceptance of a successor Agent as provided
below, each Agent may resign at any time by giving notice thereof
<PAGE>
<PAGE>
to the Banks, the other Agents and the Company, and the <PAGE>
<PAGE>
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Administrative Agent and any Co-Agent may each be removed at any
time with or without cause by the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right
to appoint a successor Administrative Agent or Co-Agent, as the
case may be, in each case (except during the continuance of a
Default or an Event of Default) with the consent of the Company
(which consent shall not be unreasonably withheld), provided that
any failure of the Company to object to a proposed successor
Agent within 15 days after notice of the proposed appointment to
the Company shall be deemed to constitute consent of the Company
to such appointment of such proposed successor Agent. If no
successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal, as the case may be, and consented to by
the Company (but only if the consent of the Company to the
appointment of a successor Agent is required as provided above),
then the retiring Agent may, on behalf of the relevant Banks,
appoint a successor Agent, which shall be a Bank which has an
office in New York, New York with a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or
removal hereunder as an Agent, the provisions of this Section 11
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
an Agent.
11.09 Collateral Sub-Agents. Each Bank by its
execution and delivery of this Agreement agrees that, in the
event it shall hold any Investments of any Obligor constituting
part of the Collateral under and as defined in the Security
Agreement, such Investments shall be held in the name and under
the control of such Bank, and such Bank shall hold such
Investments as a collateral sub-agent for the Administrative
Agent under the Security Agreement. Each Obligor and Bank, by
its execution and delivery of this Agreement hereby consents to
the foregoing. <PAGE>
<PAGE>
- 97 -
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of any Agent or
any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this
Agreement or any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices. All notices and other communications
provided for herein and under the Security Documents (including,
without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (below the name of the
Company, in the case of any Obligor other than the Company); or,
as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or
reimburse each of the Banks and each of the Agents for paying:
(a) all reasonable out-of-pocket costs and expenses of the
respective Agents (including, without limitation, the reasonable
fees and expenses of Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase), in connection with (i) the review,
negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the Unistar
Acquisition Documents and the making of Loans hereunder and
(ii) any amendment, modification or waiver of any of the terms of
this Agreement or any of the other Basic Documents; (b) all
reasonable out-of-pocket costs and expenses of each of the Banks
and the Agents (including reasonable counsels' fees) in
connection with any Default and any enforcement or collection
proceedings resulting therefrom (including the enforcement of
this Section 12.03); and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any <PAGE>
<PAGE>
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governmental or revenue authority in respect of this Agreement or
any of the other Basic Documents or any other document referred
to herein or therein and all costs, expenses, taxes, assessments
and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest
contemplated by this Agreement or any other Basic Document or any
other document referred to herein or therein.
The Company hereby agrees (to the fullest extent
permitted by law) to indemnify each Agent and each Bank and their
respective directors, officers, employees and agents for, and
hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them
(including any and all losses, liabilities, claims, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements incurred by any Agent to any Bank) arising out of
or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation
or other proceedings) relating to any of the Commitments and the
Loans or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the Loans or any of the
other transactions contemplated hereby or by the other Basic
Documents or other Unistar Acquisition Documents, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of the Person to be
indemnified).
12.04 Amendments, Etc.
(a) Any provision of this Agreement (including the
Schedules hereto) or the Notes may be amended only by an
instrument in writing signed by the Obligors (or, in the case of
the Notes, the Company only) and (except as otherwise provided
below in this Section 12.04(a)) the Majority Banks, or by the
Company (in the case of this Agreement, acting with the agreement
or consent of the other Obligors, provided that the Agents and
the Banks may conclusively assume that any such action by the
Company has been agreed or consented to by the other Obligors)
and the Administrative Agent (in the case of this Agreement,
acting with the agreement or consent of, except as otherwise so
provided, the Majority Banks), and any provision of this <PAGE>
<PAGE>
- 99 -
Agreement (including the Schedules hereto) or the Notes may be
waived by (except as otherwise so provided) the Majority Banks or
by the Administrative Agent (acting with the agreement or consent
of, except as otherwise so provided, the Majority Banks);
provided that, except as otherwise expressly provided in clauses
(i) through (iv) below, the agreement or consent of the Majority
Banks shall not be required to take any of the actions referred
to in any of said clauses (i) through (iv): (i) any modification
or waiver altering the terms of Section 4 or 5 hereof shall
require the agreement or consent of all of the Banks that would
be adversely affected thereby; (ii) any alteration of this
Section 12.04 or the definition of "Majority Banks", "Term Loan
Banks", "Revolving Credit Banks", "Majority Term Loan Banks" or
"Majority Revolving Credit Banks" shall require the agreement or
consent of each of the Banks; (iii) any modification or waiver
extending any date fixed for any scheduled payment of principal
of or interest on the Term Loans, or reducing the amount of any
scheduled payment of principal thereof or the rate at which
interest is payable thereon or the amount of any fee payable to
the Term Loan Banks hereunder shall require the agreement or
consent of all of the Term Loan Banks and any extension of the
term or increase in the amount of a Term Loan Commitment of any
Term Loan Bank shall require the agreement or consent of such
Term Loan Bank, provided that, solely for the purpose of
determining whether or not the condition precedent specified in
Section 6.03(a)(i) hereof is satisfied with respect to borrowings
under the Revolving Credit Commitments, at any time during the
continuance of a Payment Default, any modification or waiver
extending the date fixed for any scheduled payment of principal
of or interest on the Term Loans shall also require the agreement
or consent of the Majority Revolving Credit Banks; and (iv) any
modification or waiver extending the date fixed for any scheduled
payment of principal of or interest on the Revolving Credit Loans
or reducing the amount of any scheduled payment of principal
thereof or the rate at which interest is payable thereon or the
amount of any fee payable to the Revolving Credit Banks hereunder
shall require the agreement or consent of all of the Revolving
Credit Banks and any extension of the term or increase in the
amount of the Revolving Credit Commitment of any Revolving Credit
Bank shall require the agreement or consent of such Revolving
Credit Bank. Anything in this Section 12.04 to the contrary
notwithstanding, any modification or waiver of any provision of
this Agreement or any of the other Basic Documents reducing the <PAGE>
<PAGE>
- 100 -
rights or increasing the obligations of any Agent hereunder or
thereunder shall require the agreement or consent of such Agent.
(b) The Administrative Agent may, with the prior
consent of the Majority Banks (but not otherwise), consent to any
modification, supplement or waiver of any of the Security
Documents, provided that, without the prior consent of each Bank,
the Administrative Agent may not (except as provided herein or in
the Security Documents) modify, supplement or waive any term with
respect to the application of proceeds under and pursuant to the
Security Agreement or release any collateral or otherwise
terminate any Lien under any Security Document providing for
collateral security except that no such consent shall be
required, and the Administrative Agent is hereby authorized, to
release any Lien covering Property which is the subject of a
Disposition of Property permitted hereunder or to which the
Majority Banks have consented hereunder.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provided that
no Obligor may assign any of its rights or obligations hereunder
or under any of the other Basic Documents without the prior
consent of all of the Banks and the Agents.
12.06 Bank Assignments and Participations.
(a) Subject to paragraph (b) below, each Bank may
assign to any other Bank or any other bank or financial
institution all or any part of its Loans and Commitments,
provided that: (i) except for an assignment consented to by the
Administrative Agent and, except during the continuance of an
Event of Default, any such assignment of less than all of such
Bank's Loans and Commitments of each series to a single assignee
shall be in a minimum amount of $5,000,000 and (iii) each partial
assignment by such Bank of its Term Loans and Term Loan
Commitments or its Revolving Credit Loans or Revolving Credit
Commitments shall be made in such a manner so that the same
proportion of each of its outstanding Term Loans and Term Loan
Commitments (if then in effect) or Revolving Credit Loans and
Revolving Credit Commitments (if then in effect), as the case may
be, is assigned to the assignee. Upon written notice to the
Company and the Administrative Agent of an assignment permitted
hereunder (which notice shall identify the assignee, the amount <PAGE>
<PAGE>
- 101 -
of the assignor's Loan(s) and Commitment(s) assigned in detail
reasonably satisfactory to the Administrative Agent), the
assignee shall have, to the extent of such assignment, the
obligations, rights and benefits of a Bank hereunder holding the
Loan(s) and/or Commitment(s) assigned to it (in addition to the
Loan(s) and Commitment(s) of such series, if any, theretofore
held by such assignee). In connection with the assignment by a
Bank of all or any portion of its Loan(s) and/or Commitment(s) to
another Person as permitted hereunder, upon request of such Bank
or such Person, the Company will issue promissory notes in
substantially the form of Exhibit A-1 or A-2 hereto (as
appropriate) (as such form may have been modified), each dated
the date of the Notes originally issued hereunder (or, if
interest has been paid on such Loan(s), the last day through
which interest shall have been paid on such Loan(s)) and payable
to the order of such Person in a principal amount equal to the
Loan(s) so assigned and otherwise duly completed, and the
assigning Bank shall make an appropriate notation on the schedule
attached to the related Note(s) held by it as to the principal
amount of the Loan(s) and/or Commitment(s) so assigned.
(b) If any assignment made pursuant to paragraph (a),
above shall be made to any Person that is organized under the
laws of any jurisdiction other than the United States of America
or any State thereof, such Person shall furnish such
certificates, documents or other evidence to the Company and the
Administrative Agent as shall be required by Section 5.06 hereof
to evidence such Person's exemption from U.S. withholding taxes
with respect to any payments under or pursuant to this Agreement
because any such payments to such Person are effectively
connected with the conduct by such Person of a trade or business
in the United States.
(c) A Bank may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans
held by it, or in its Commitment(s), provided that each purchaser
of a participation (a "Participant"), except as otherwise
provided in Section 4.07(c) or 5.06(e) hereof, shall not have any
other rights or benefits under this Agreement or any Note or any
other Basic Document (the Participant's rights against such Bank
in respect of such participation to be those set forth in the
agreements executed by such Bank in favor of the Participant).
Each Bank's right to sell such participations is subject to the
following conditions: (i) such Bank's obligations under this <PAGE>
<PAGE>
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Agreement (including, without limitation, its Commitment(s), if
any, hereunder) shall remain unchanged, (ii) such Bank shall
remain solely responsible for the performance of such obligations
and (iii) the Obligors, the Agents, and the other Banks shall
continue to be entitled to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under
this Agreement. All amounts payable by the Company to any Bank
under Section 5 hereof in respect of the Loan(s) held by it, and
its Commitment(s), shall be determined as if such Bank had not
sold or agreed to sell any participations in such Loan(s) and
Commitment(s), and as if such Bank were funding and maintaining
each of such Loan(s) and Commitment(s) in the same way that it is
funding and maintaining the portion of such Loan and Commitment
in which no participations have been sold. In no event shall a
Bank that sells a participation agree with the Participant to
take or refrain from taking any action hereunder or under any
other Basic Document except that such Bank may agree with the
Participant that it will, on behalf of the Participant, request
the Company to furnish information to such Bank for delivery to
the Participant, of the type specified in Section 8.01(m) hereof
and may further agree with the Participant that it will not,
without the consent of the Participant, agree to any of the
following (but only if and to the extent that such agreement
would have an adverse effect on the Participant): (i) increase
or extend the term, or extend the time or waive any requirement
for the reduction or termination, of such Bank's related
Commitment(s), (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans or any
portion of any fee hereunder payable to the Participant,
(iii) reduce the amount of any such payment of principal or
(iv) reduce the rate at which interest is payable thereon, or any
fee hereunder payable to the Participant, to a level below the
rate at which the Participant is entitled to receive such
interest or fee.
(d) Anything in this Section 12.06 to the contrary
notwithstanding, any Bank may assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Bank from its obligations hereunder.
<PAGE>
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(e) A Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 12.12(b) hereof.
12.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06 and 12.03 hereof and the obligations of
the Banks under Sections 11.05 and 12.12 hereof shall survive the
repayment of the Loans and the termination of the Commitments.
In addition, each representation and warranty made, or deemed to
be made by a notice of any borrowing, herein or pursuant hereto
shall survive the making of such representation and warranty, and
no Bank shall be deemed to have waived, by reason of making any
Loan hereunder, any Default which may arise by reason of such
representation or warranty proving to have been false or
misleading, notwithstanding that such Bank or any of the Agents
may have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time
such extension of credit was made.
12.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
12.10 Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. Each Obligor
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and
of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each
Obligor irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the<PAGE>
<PAGE>
laying of the venue of any such proceeding brought in such a <PAGE>
<PAGE>
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court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE
AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Treatment of Certain Information;
Confidentiality.
(a) The Company acknowledges that (i) services may be
offered or provided to it (in connection with this Agreement or
otherwise) by each Bank or by one or more subsidiaries or
affiliates of such Bank and (ii) information delivered to each
Bank by the Company and its Subsidiaries may be provided to each
such subsidiary and affiliate, it being understood that any such
subsidiary or affiliate receiving such information shall be bound
by the provisions of clause (b) below as if it were a Bank
hereunder.
(b) Each Bank and each Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for
handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public
information supplied to it by the Company pursuant to this
Agreement which is identified by the Company as being
confidential at the time the same is delivered to the Banks or
the Agents, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel
for any of the Banks or any of the Agents, (iii) at their
request, to bank examiners or other regulators having analogous
responsibilities, (iv) to auditors or accountants, (v) to the
Agents or any other Bank (or to Chase Securities, Inc.), (vi) in
connection with any litigation arising under or in connection
with the transactions contemplated by this Agreement or the other
Basic Documents, (vii) to a subsidiary or affiliate of such Bank
as provided in clause (a) above or (viii) to any assignee or
participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or<PAGE>
<PAGE>
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participant) first executes and delivers to the respective Bank a
Confidentiality Agreement substantially in the form of Exhibit F
hereto. In no event shall any Bank or any Agent be obligated or
required to return any materials furnished by the Company.
12.13 Senior Indebtedness. Each of the parties hereto
agrees that the obligations of the Company with respect to the
Loans hereunder and under the Notes constitute "Senior
Indebtedness" under and as defined in the 6-3/4% Debenture
Indenture and "Senior Indebtedness" under and as defined in the
9% Debenture Indenture. <PAGE>
<PAGE>
- 106 -
IN WITNESS WHEREOF, the parties hereto have caused this
Credit Agreement to be duly executed as of the day and year first
above written.
COMPANY
_______
WESTWOOD ONE, INC.
By /s/ Eric R. Weiss
___________________________
Title: Senior Vice President
Address for Notices:
c/o Infinity Broadcasting Corporation
600 Madison Avenue
New York, New York 10022
Attention: Mel Karmazin
Telecopier No.: (212) 888-2959
Telephone No.: (212) 750-6400 <PAGE>
<PAGE>
- 107 -
SUBSIDIARY GUARANTORS
_____________________
WESTWOOD ONE RADIO, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
MUTUAL BROADCASTING SYSTEM, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
WESTWOOD NATIONAL RADIO CORPORATION
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
WESTWOOD ONE SATELLITE SYSTEMS, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
WESTWOOD ONE STATIONS-NYC, INC.<PAGE>
<PAGE>
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
WESTWOOD ONE STATIONS GROUP, INC. (f/k/a
Westwood One Stations, Inc.)
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President <PAGE>
<PAGE>
- 108 -
NATIONAL RADIO NETWORK, INC.
____________________________
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
THE SOURCE, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
TALKNET, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
KM RECORDS, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President
WESTWOOD ONE STATIONS-LA, INC.
By /s/ Eric R. Weiss
__________________________
Title: Senior Vice President <PAGE>
<PAGE>
- 109 -
BANKS AND CO-AGENTS
___________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By /s/ William E. Rottino
________________________
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Telecopier No.: (212) 552-4095
Telephone No.: (212) 552-4846
Attention: William Rottino
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081 <PAGE>
<PAGE>
- 110 -
BANK OF MONTREAL, as a Bank
and as a Co-Agent
By /s/ Catherine Shea
____________________
Title: Director
Address for Notices:
Bank of Montreal
430 Park Avenue - 16th Floor
New York, NY 10022
Telecopier No.: (212) 605-1525
(212) 605-1648
Telephone No.: (212) 605-1423
Attention: Catherine Shea
Director
Lending Office for all Loans:
115 South LaSalle Street - 11th Fl
Chicago, Illinois 60603 <PAGE>
<PAGE>
- 111 -
THE FIRST NATIONAL BANK OF BOSTON, as a
Bank and as a Co-Agent
By /s/ Lisa Gallagher
____________________
Title: Director
Address for Notices:
Bank of Boston
100 Federal Street
Boston, MA 02110
Attention: Steve Pratt-Otto
Telecopier No.: (617) 434-3401
Telephone No.: (617) 434-5425
Lending Office for all Loans:
Bank of Boston
Loan Processing
100 Federal Street (01-1B-12)
Boston, MA 02110 <PAGE>
<PAGE>
ADMINISTRATIVE AGENT
____________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By /s/ William E. Rottino
________________________
Title: Vice President
Address for Notices to Chase as
Administrative Agent:
The Chase Manhattan Bank
(National Association)
New York Agency
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopier No.: (718) 242-6900
Telephone No.: (718) 242-7970
Attention: Lilianne Pouponneau<PAGE>
<PAGE>
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of August 12, 1994, between WESTWOOD ONE, INC.,
a corporation duly organized and validly existing under the laws of the
State of Delaware (the "Company"); each of the Subsidiaries of the
Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors'); each of the Banks party to
the Credit Agreement referred to below; BANK OF MONTREAL and THE FIRST
NATIONAL BANK OF BOSTON, as Co-Agents for said Banks (individually, a
"Co-Agent" and, collectively, the "Co-Agents"); and THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), as agent for said Banks (in such capacity,
together with its successors in such capacity, the "Administrative
Agent").
The Company, the Subsidiary Guarantors, the lenders party thereto
(individually, a "Bank" and, collectively, the "Banks"), the Co-Agents
and the Administrative Agent are parties to a Credit Agreement dated as
of February 1, 1994 (the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for loans to be made by said Banks to the
Company in an aggregate principal amount not exceeding $125,000,000.
The Company, the Subsidiary Guarantors and the Banks wish to amend the
Credit Agreement in certain respects, and accordingly, the parties
hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 1, terms defined in the Credit Agreement are used herein as defined
therein.
Section 2. Amendments. Upon the execution and delivery hereof by the
Company, each of the Subsidiary Guarantors and the Majority Banks, but
effective as of the date hereof, the second proviso to Section 3.03 of
the Credit Agreement shall be amended to read in its entirety as
follows:
"; provided that, if the Company so elects in the related notice
of prepayment referred to in clause (a) above, all or that part
(as specified by the Company in such notice) of any amount
required by clause (b) above to be applied to the installments of
the Term Loans in the inverse order of maturity shall instead be
applied as follows:
(i) first, such prepayment shall be applied to the
installments of the Term Loans scheduled to be paid on or
prior to the later of (x) August 31, 1995 and (y) the date
180 days after the date of such prepayment (such later date,
the "Specified Date") in the direct order of the maturities
thereof;
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(ii) then (after prepayment in full of the pre-Specified
Date installments of the Term Loans pursuant to clause (i)
above), (x) one-half of the remainder of such prepayment
shall be applied to the post-Specified Date installments in
the direct order of the maturities thereof and (y) one-half
of the remainder of such prepayment shall be applied to the
post-Specified Date installments in the inverse order of
their maturities; provided that the aggregate amount applied
to the post-Specified Date installments in connection with
the instant prepayment pursuant to clause (x) above,
together with the aggregate amount of all previous
prepayments of the post-Specified Date installments pursuant
to said clause (x), shall not exceed $5,000,000; and
(iii) finally, any amount not applied pursuant to clauses
(i) and (ii) above shall be applied to the remaining
installments of the Term Loans in the inverse order of the
maturities thereof."
Section 3. Representations and Warranties. The Company and the
Subsidiary Guarantors represent and warrant to the Banks that the
representations and warranties set forth in Section 7 of the Credit
Agreement are true and complete on the date hereof as if made on and as
of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific
date) and as if each reference in said Section 7 to "this Agreement"
included reference to this Amendment No. 1.
Section 4. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This
Amendment No. 1 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same amendatory
instrument and any of the parties hereto may execute this Amendment No.
1 by signing any such counterpart. This Amendment No. 1 shall be
governed by, and construed in accordance with, the law of the State of
New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed and delivered as of the day and year first above
written.
WESTWOOD ONE, INC.
By /s/ Farid Suleman
SUBSIDIARY GUARANTORS
_____________________
WESTWOOD ONE RADIO, INC.
By /s/ Farid Suleman
MUTUAL BROADCASTING SYSTEM, INC.
By /s/ Farid Suleman
WESTWOOD NATIONAL RADIO CORPORATION
By /s/ Farid Suleman
WESTWOOD ONE SATELLITE SYSTEMS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-NYC, INC.
By /s/ Farid Suleman
NATIONAL RADIO NETWORK, INC.
By /s/ Farid Suleman
THE SOURCE, INC.
By /s/ Farid Suleman
TALKNET, INC.
By /s/ Farid Suleman
3<PAGE>
<PAGE>
KM RECORDS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-LA, INC.
By /s/ Farid Suleman
UNISTAR RADIO NETWORKS, INC.
By /s/ Farid Suleman
BANKS
_____
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as a Bank and as
Administrative Agent
By /s/ John P. White
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as a Bank and a Co-Agent
By /s/ Lisa Gallagher
Title: Director
BANK OF MONTREAL,
as a Bank and a Co-Agent
By /s/ Catherine Shea
Title: Director
4<PAGE>
<PAGE>
CIBC, INC.
By /s/ Harold Birk
Title: Vice President
CONTINENTAL BANK
By /s/ L. Dustin Vincent
Title: Vice President
SOCIETY NATIONAL BANK
By /s/ Paul Nestvold
Title: Officer
5<PAGE>
<PAGE>
AMENDMENT NO. 2
AMENDMENT NO. 2 dated as of August 31, 1994, between WESTWOOD ONES
INC., a corporation duly organized and validly existing under the
laws of the State of Delaware (the "Company"); each of the
Subsidiaries of the Company identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto
(individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"); each of the Banks party to the Credit
Agreement referred to below; BANK OF MONTREAL and THE FIRST
NATIONAL BANK OF BOSTON, as Co-Agents for said Banks
(individually, a "Co-Aqent" and, collectively, the "Co-Agents");
and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for
said Banks (in such capacity, together with its successors in such
capacity, the "Administrative Aqent").
The Company, the Subsidiary Guarantors, the lenders party thereto
(individually, a "Bank" and, collectively, the "Banks"), the
Co-Agents and the Administrative Agent are parties to a Credit
Agreement dated as of February 1, 1994 (as heretofore amended, the
"Credit Aqreement"), providing, subject to the terms and
conditions thereof, for loans to be made by said Banks to the
Company in an aggregate principal amount not exceeding
$125,000,000.
In accordance with Section 1.02(d) of the Credit Agreement, the
Company wishes to change the fiscal year of the Company and each
of its Subsidiaries to December 31 of each year, and to change the
last day of the first three fiscal quarters of each fiscal year to
March 31, June 30 and September 30 in each year, effective as of
September 30, 1994. The Company, the Subsidiary Guarantors, the
Banks and the Administrative Agent wish to amend the Credit
Agreement to reflect such change in fiscal year and fiscal
quarter, and wish to amend the Credit Agreement in certain other
respects. Accordingly, the parties hereto hereby agree as
follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 2, terms defined in the Credit Agreement are used
herein as defined therein.
Section 2. Amendments. Upon the execution and delivery hereof by
the Company, each of the Subsidiary Guarantors and the Majority
Banks, but effective as of the date hereof, the Credit Agreement
shall be amended as follows:
A. References in the Credit Agreement (including
references to the Credit Agreement as amended hereby) to "this
Agreement" (and indirect references such as "hereunder", "hereby",
"herein" and "hereof") shall be deemed to be references to the
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<PAGE>
Credit Agreement as amended hereby.
B. Section 1.01 of the Credit Agreement shall be amended
by adding the following new definition in its appropriate
alphabetical location:
"Calculation Dates" shall mean (a) the last Business Day of
February, 1994, (b) the last Business Day of May, 1994, and
(c) commencing with the last Business Day of September,
1994, the last Business Day of March, June, September and
December in each year.
C. The definition of "Operating Cash Flow" in Section 1.01
of the Credit Agreement shall be amended by deleting "November 30,
1994" in clause (b)(ii) of such definition and substituting
"December 31, 1994" therefor; and by deleting Clause (1) of the
provision therein and substituting the following, respectively,
therefor:
"(1) for purposes hereof (other than for purposes of
computing the Total Debt Ratio for determinations of the
Applicable Margin), Operating Cash Flow (W) for the period
of four fiscal quarters of the Company ending February 28,
1994 shall be increased by $5,300,000; (X) for the period of
four fiscal quarters of the Company ending May 31, 1994
shall be increased by $3,975,000; (Y) for the period of four
fiscal quarters of the Company ending September 30, 1994
shall be increased by $2,650,000; and (Z) for the period of
four fiscal quarters of the Company ending December 31, 1994
shall be increased by $1,325,000;".
D. Section 1.02(d) of the Credit Agreement shall be
amended to read in its entirety as follows:
"(d) From and after September 30, 1994, the Company will
maintain its accounts and the accounts of its Subsidiaries
on the basis of a fiscal year ending December 31 of each
year, and the last days of the first three fiscal quarters
in each Fiscal Year will be March 31, June 30 and September
30 of each year, respectively."
E. Section 3.04(c) of the Credit Agreement shall be
amended by deleting "with the Fiscal Year ending on November 30,
1994" therein and substituting "with the Fiscal Year ending on
December 31, 1994" therefor.
F. Section 8.05 of the Credit Agreement shall be amended
by deleting "for each Fiscal Year commencing on and after December
1, 1994" therein and substituting "for each Fiscal Year commencing
on and after January 1, 1995" therefor.
2
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<PAGE>
G. Sections 8.10 and 8.11 of the Credit Agreement shall be
amended to read in their entirety as follows:
"8.10 Debt Ratios.
(a) Senior Debt Ratio. The Company will not permit the Senior Debt
Ratio, at the Closing Date and at any Calculation Date occurring
during any period specified below, to exceed the ratio set forth
opposite such period:
Period (both dates inclusive) Ratio
Closing Date to 6/30/95 4.75:1
7/1/95 to 9/30/95 4.50:1
10/1/95 to 3/31/96 4.25:1
4/1/96 to 9/30/96 3.75:1
10/1/96 to 9/30/97 3.25:1
Thereafter 3.00:1
(b) Total Debt Ratio. The Company will not permit the Total Debt
Ratio, at the Closing Date and at any Calculation Date occurring
during any period specified below, to exceed the ratio set forth
opposite such period:
Period (both dates inclusive) Ratio
Closing Date to 6/30/95 5.25:1
7/1/95 to 9/30/95 5.00:1
10/1/95 to 3/31/96 4.75:1
4/1/96 to 9/30/96 4.25:1
10/1/96 to 9/30/97 3.75:1
Thereafter 3.00:1
(c) Fixed Charges Ratio. The Company will not permit the Fixed
Charges Ratio to be less than 1.10 to 1.00 on the Closing Date and
any Calculation Date occurring after the Closing Date.
8.11 Total Interest Coverage Ratio: Total Pro Forma Debt
Service Coverage Ratio.
(a) Total Interest Coverage Ratio. The Company will not permit
the Total Interest Coverage Ratio, at the Closing Date and at any
Calculation Date occurring during any period specified below, to
be less than the ratio set forth opposite such period:
Period (both dates inclusive) Ratio
Closing Date to 12/31/94 2.00:1
1/1/95 to 12/31/95 2.25:1
1/1/96 to 12/31/96 2.50:1
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<PAGE>
Thereafter 3.00:1
(b) Total Pro Forma Debt Service Coverage Ratio. The Company
will not permit the Total Pro Forma Debt Service Coverage Ratio to
be less than 1.15:1 on the Closing Date and any Calculation Date
occurring after the Closing Date."
Section 3. Representations and Warranties. The Company and the
Subsidiary Guarantors represent and warrant to the Banks that the
representations and warranties set forth in Section 7 of the
Credit Agreement are true and complete on the date hereof as if
made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific
date, as of such specific date) and as if each reference in said
Section 7 to "this Agreement" included reference to this Amendment
No. 2.
Section 4. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect.
This Amendment No. 2 may be executed in any number of
counterparts, all of which taken together shall constitute one and
the same amendatory instrument and any of the parties hereto may
execute this Amendment No. 2 by signing any such counterpart. This
Amendment No. 2 shall be governed by, and construed in accordance
with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2 to be duly executed and delivered as of the day and year
first above written.
WESTWOOD ONE, INC.
By /s/ Farid Suleman
SUBSIDIARY GUARANTORS
_____________________
WESTWOOD ONE RADIO, INC.
By /s/ Farid Suleman
4<PAGE>
<PAGE>
MUTUAL BROADCASTING SYSTEM, INC.
By /s/ Farid Suleman
WESTWOOD NATIONAL RADIO CORPORATION
By /s/ Farid Suleman
WESTWOOD ONE SATELLITE SYSTEMS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-NYC, INC.
By /s/ Farid Suleman
NATIONAL RADIO NETWORK, INC.
By /s/ Farid Suleman
THE SOURCE, INC.
By /s/ Farid Suleman
TALKNET, INC.
By /s/ Farid Suleman
KM RECORDS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-LA, INC.
By /s/ Farid Suleman
UNISTAR RADIO NETWORKS, INC.
By /s/ Farid Suleman
5<PAGE>
<PAGE>
BANKS
_____
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as a Bank and as
Administrative Agent
By /s/ John P. White
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as a Bank k and a Co-Agent
By /s/ Lisa Gallagher
Title: Director
BANK OF MONTREAL,
as a Bank and a Co-Agent
By /s/ Gretchen Shugart
Title: Director
CIBC, INC.
By /s/ Harold Birk
Title: Vice President
BANK OF AMERICA ILLINOIS
By /s/ Nancy L. Sun
Title: Vice President
SOCIETY NATIONAL BANK
By /s/ Paul Nestvold
Title: Officer
6<PAGE>
<PAGE>
AMENDMENT NO. 3
AMENDMENT NO. 3 dated as of February 23, 1995, between WESTWOOD ONE,
INC., a corporation duly organized and validly existing under the laws
of the State of Delaware (the "Company"); each of the Subsidiaries of
the Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors"); each of the Banks party to
the Credit Agreement referred to below; BANK OF MONTREAL and THE FIRST
NATIONAL BANK OF BOSTON, as Co-Agents for said Banks (individually, a
"Co-Agent" and, collectively, the "Co-Agents"); and THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), as agent for said Banks (in such capacity,
together with its successors in such capacity, the "Administrative
Agent").
The Company, the Subsidiary Guarantors, the lenders party thereto
(individually, a "Bank" and, collectively, the "Banks"), the Co-Agents
and the Administrative Agent are parties to a Credit Agreement dated as
of February 1, 1994 (as heretofore amended, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for loans to be
made by said Banks to the Company in an aggregate principal amount not
exceeding $125,000,000.
The Company, the Subsidiary Guarantors, the Banks and the Administrative
Agent wish to amend the Credit Agreement in certain respects and,
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 3, terms defined in the Credit Agreement are used herein as defined
therein.
Section 2. Amendments. Upon the execution and delivery hereof by the
Company, each of the Subsidiary Guarantors and the Majority Banks, but
effective as of Closing Date, the Credit Agreement shall be amended as
follows:
A. General. References in the Credit Agreement (including
references to the Credit Agreement as amended hereby) to "this
Agreement" (and indirect references such as hereunder "hereby", "herein"
and "hereof") shall be deemed to be references to the Credit Agreement
as amended hereby.
B. Interest Rate Protection Agreements. Section 8.13 of the
Credit Agreement shall be amended by deleting the phrase "to protect
itself against fluctuations in the rates of interest on the Loans as to
a notional principal amount at least equal to 50% of the Loans then
outstanding" and substituting the following therefor:
"to protect itself against fluctuations in the rates of interest
on the Loans as to a notional principal amount at least equal to
40% of the Loans then outstanding".
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Section 3. Representations and Warranties. The Company and the
Subsidiary Guarantors represent and warrant to the Banks that the
representations and warranties set forth in Section 7 of the Credit
Agreement are true and complete on the date hereof as if made on and as
of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific
date) and as if each reference in said Section 7 to "this Agreement"
included reference to this Amendment No. 3.
Section 4. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This
Amendment No. 3 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same amendatory
instrument and any of the parties hereto may execute this Amendment No.
3 by signing any such counterpart. This Amendment No. 3 shall be
governed by, and construed in accordance with, the law of the State of
New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3
to be duly executed and delivered as of the day and year first above
written.
WESTWOOD ONE, INC.
By /s/ Farid Suleman
SUBSIDIARY GUARANTORS
_____________________
WESTWOOD ONE RADIO, INC.
By /s/ Farid Suleman
MUTUAL BROADCASTING SYSTEM, INC.
By /s/ Farid Suleman
WESTWOOD NATIONAL RADIO CORPORATION
By /s/ Farid Suleman
WESTWOOD ONE SATELLITE SYSTEMS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-NYC, INC.
By /s/ Farid Suleman
NATIONAL RADIO NETWORK, INC.
By /s/ Farid Suleman
THE SOURCE, INC.
By /s/ Farid Suleman
2<PAGE>
<PAGE>
TALKNET, INC.
By /s/ Farid Suleman
KM RECORDS, INC.
By /s/ Farid Suleman
WESTWOOD ONE STATIONS-LA, INC.
By /s/ Farid Suleman
UNISTAR RADIO NETWORKS, INC.
By /s/ Farid Suleman
BANKS
_____
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as a Bank and as
Administrative Agent
By /s/ John P. White
Title: Vice President
3<PAGE>
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THE FIRST NATIONAL BANK OF BOSTON,
as a Bank and a Co-Agent
By /s/ Mary E. Meduski
Title: Vice President
BANK OF MONTREAL,
as a Bank and a Co-Agent
By /s/ Gretchen Shugart
Title: Director
CIBC INC.
By /s/ Harold Birk
Title: Vice President
BANK OF AMERICA ILLINOIS
By /s/ Nancy L. Sun
Title: Vice President
SOCIETY NATIONAL BANK
By /s/ Paul Nestvold
Title: Officer
4<PAGE>
<PAGE>
<PAGE>
LEASE
Between
BROADWAY 52ND ASSOCIATES
OWNER
AND
UNISTAR COMMUNICATIONS GROUP, INC.
TENANT
Premises: Entire Seventeenth (17th) Floor
1675 Broadway
New York, New York
1<PAGE>
<PAGE>
LEASE dated as of the 18th day of June, 1990 between BROADWAY 52nd
ASSOCIATES, a New York partnership having its principal office at 345
Park Avenue, Borough of Manhattan, City, County and State of New York,
as landlord (referred to as "Owner"), and UNISTAR COMMUNICATIONS GROUP,
INC., a Delaware corporation, having as office at 1440 Broadway, Borough
of Manhattan, City, County and State of New York, as tenant (referred to
as "Tenant).
WITNESSETH:
Owner and Tenant hereby covenant and agree as follows:
ARTICLE 1
DEMISE, PREMISES, TERM, RENTS
Section 1.01. Owner hereby leases to Tenant and Tenant hereby hires
from Owner the entire seventeenth (17th) floor in the building located
on the northwest corner of Broadway and West 52nd Street and known as
1675 Broadway and 225 West 52nd Street in the Borough of Manhattan, City
of New York (said building is referred to as the "Building", and the
Building, together with the plot of land upon which it stands and all
other land and development rights demised in the Ground and Development
Rights Lease referred to in Article 7 is referred to collectively as the
"Real Property"), at the annual rental rate or rates set forth in
Section 1.03, and upon and subject to all of the terms, covenants and
conditions contained in this Lease. The premises leased to Tenant,
together with all appurtenances, fixtures, improvements, additions and
other property attached thereto or installed therein at the commencement
of, or at any time during, the term of this Lease, other than Tenant's
Personal Property (as defined in Article 4), are referred to,
collectively, as the "Demised Premises".
Section 1.02. A. The Demised Premises are leased for a term
(referred to as the "Demised Term") to commence (subject to the
provisions of subsection B of this Section 1.02) on March 1, 1991 and to
end on September 30, 2000 unless the Demised Term shall sooner terminate
pursuant to any of the terms, covenants or conditions of this Lease or
pursuant to law.
B. Notwithstanding anything in subsection A of this section 1.02
to the contrary, if on or prior to the date set forth in said subsection
A for the commencement of the Demised Term, a temporary or permanent
Certificate(s) of Occupancy covering the Demised Premises has not been
issued by the Department of Buildings of the City of New York or Owner
shall have failed substantially to complete Owner's initial Construction
(as defined in Article 12) or if prior to March 1, 1991 a temporary or
permanent Certificate(s) of Occupancy covering the Demised Premises and
permitting its use as "offices" and "broadcasting studio" without
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material conditions as to such use (and if a temporary certificate,
Owner shall obtain a permanent certificate without interruption of
Tenant's occupancy), shall have been so issued and owner shall have
substantially completed Owner's Initial Construction, as the case may
be, then: (a) the Demised Term shall not commence on the date set forth
in said subsection A but shall, instead, commence on a date, fixed by
Owner in a notice to Tenant, not sooner than fifteen (15) days next
following the date of the giving of such notice, which notice shall
state that (i) a temporary or permanent Certificate(s) of Occupancy
covering the Demised Premises and permitting its use as "offices" and
"broadcasting studio" without material conditions as to such use (and if
a temporary certificate, Owner shall obtain a permanent certificate
without interruption of Tenant's occupancy) has been, or prior to the
commencement date fixed in said notice is expected to be, issued by the
Department of Buildings of the City of New York and (ii) Owner has, or
prior to the commencement date fixed in said notice will have,
subsequently completed Owner's initial Construction whether or not the
Demised Term shall occur before of after March 1, 1991; and (b) the
Demised Term shall end nevertheless on September 30, 2000 unless sooner
terminated pursuant to any of the terms, covenants or conditions of this
Lease or pursuant to law; and (c) except as aforesaid, neither the
validity of this Lease nor the obligations of Tenant under this Lease
shall be affected thereby. If, by the date fixed in any such notice, a
temporary or permanent Certificate(s) of Occupancy covering the Demised
Premises has not been issued or Owner's initial Term shall commence on a
date fixed by Owner in a further notice by Owner not sooner than fifteen
(15) days next following the date of the giving of such further notice.
The date upon which the Demised Term shall commence pursuant to
subsection A of this Section or pursuant to this subsection B is
referred to as the "commencement Date", and the date fixed pursuant to
said subsection A as the date upon which the Demised Term shall end is
referred to as the "expiration Date".
C.Tenant waives any right to rescind this Lease under Section 223-
a of the New York Real Property Law or any successor statute of similar
import then in force and further waives the right to recover any damages
which may result from Owner's failure to deliver possession of the
Demised Premises on the date set forth in subsection A of this Section,
or in any notice given pursuant to subsection B of this Section, for the
commencement of the Demised Term.
D. After the determination of the Commencement Date, Tenant
agrees, upon request of Owner, to execute, acknowledge and deliver to
Owner an instrument, in form satisfactory to Owner, setting forth said
Commencement Date and the Expiration Date.
Section 1.03. A. This Lease is made at the annual rental
rate(s)(referred to as "Fixed Rent") of SIX HUNDRED EIGHTEEN THOUSAND
THREE HUNDRED FIFTY EIGHT ($618,358.00) DOLLARS with respect to the
period from the Commencement Date to the last day of the calendar month
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<PAGE>
in which the day immediately preceding the fifth (5th) anniversary date
of the Commencement Date shall occur, both dates inclusive, and SIX
HUNDRED FORTY TWO THOUSAND ONE HUNDRED FORTY ONE ($642,141.00) DOLLARS
with respect to the remainder of the Demised Term.
B. The Fixed Rent and any additional rent payable pursuant to the
provisions of this Lease shall be payable by Tenant to Owner at its
office (or at such other place as Owner may designate in a notice to
Tenant) in lawful money of the United States which shall be legal tender
in payment of all debts and dues, public and private, at the time of
payment, or by Tenant's good check drawn on a bank or trust company
whose principal office is located in New York City and which is a member
of the New York Clearinghouse Association, without prior demand therefor
and without any offset or deduction whatsoever except as otherwise
specifically provided in this Lease. The Fixed Rent shall be payable in
equal monthly installments of FIFTY ONE THOUSAND FIVE HUNDRED TWENTY
NINE and 83/100 ($51,529.83) DOLLARS with respect to the period from the
Commencement Date to the last day of the calendar month in which the day
immediately preceding the fifth (5th) anniversary date of the
Commencement Date shall occur, both dates inclusive, and FIFTY THREE
THOUSAND FIVE HUNDRED ELEVEN and 75/100 ($$53,511.75) DOLLARS with
respect to the remainder of the first (1st) day of each month during the
Demised Term (except as otherwise provided in subsection C of this
Section).
C. Tenant shall pay to Owner, on the Commencement Date a sum
equal to ONE THOUSAND SEVEN HUNDRED SEVENTEEN and 67/100 ($1,717.67)
Dollars, multiplied by the number of calendar days in the period from
the Commencement Date to the last day of the month in which the
Commencement Date shall occur, both inclusive or if the Commencement
Date shall occur on the first day of any calendar month Tenant shall pay
to Owner the sum of FIFTY ONE THOUSAND FIVE HUNDRED TWENTY NINE and
83/100 ($51,529.83) DOLLARS. Such payment shall constitute payment of
the Fixed Rent for the period (referred to, herein, as the "Initial Rent
Period") from the Commencement Date to and including the last day of the
calendar month in which the Commencement Date shall occur.
D. If Tenant shall use or occupy all or any part of the Demised
Premises for the conduct of business prior to the Commencement Date,
such use or occupancy shall be deemed to be under all of the terms,
covenants and conditions of this Lease, including the covenant to pay
Fixed Rent for the period from the commencement of said use or occupancy
to and including the date immediately preceding the Commencement Date,
without, however, affecting the Expiration Date. The provisions of the
foregoing sentence shall not be deemed to give to Tenant any right to
use or occupy all or any part of the Demised Premises prior to the
Commencement Date without the consent of Owner.
Section 1.04. Tenant covenants (i) to pay the Fixed Rent, any increases
in the Fixed Rent, and any additional rent payable pursuant to the
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provisions of this Lease, and (ii) to observe and perform, and to permit
no violation of, the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed. (See Article 38 and Article
48.)
ARTICLE 2
USE AND OCCUPANCY
Section 2.01. Tenant shall use and occupy the Demised Premises for the
following purpose:
Executive and general offices, broadcasting studio and related uses
provided the related uses comply with all applicable zoning resolutions
and laws.
Section 2.02. Tenant shall not use or occupy, or permit the use or
occupancy of, the Demised Premises or any part thereof, for any purpose
other than the purpose specifically set forth in Section 2.01, or in any
manner which, in Owner's reasonable judgement, (a) shall materially
adversely affect or materially interfere with (i) any services required
to be furnished by Owner to Tenant or to any other tenant or occupant of
the Building, or (ii) the proper and economical rendition of any such
service, or (iii) the use or enjoyment of any part of the Building by
any other tenant or occupant, or (b) shall tend to impair the character
or dignity of the Building.
ARTICLE 3
ALTERATIONS
Section 3.01. Tenant shall not make or perform, or permit the making or
performance of any alterations, installations, improvements, additions
or other physical changes in or about the Demised Premises (referred to
collectively as "Alterations") without Owner's prior consent. Owner
agrees not to unreasonably withhold or delay its consent to any
nonstructural Alterations proposed to be made by Tenant to adapt the
Demised Premises for Tenant's business purposes. Notwithstanding the
foregoing provisions of this Section or Owner's consent to any
Alterations, all Alterations and decorations shall be made and performed
in conformity with and subject to the following provisions: All
Alterations and decorations shall be made and performed at Tenant's sole
cost and expense and at such time and in such manner as Owner may, from
time to time, reasonably designate; no Alterations or decoration shall
adversely affect the structural integrity of the building; Alterations
shall be made only by contractors or mechanics approved by Owner, such
approval not unreasonably to be withheld or delayed (notwithstanding the
foregoing, all Alterations requiring mechanics in trades with respect to
which Owner has adopted or may hereafter adopt a list or lists of
approved contractors shall be made only by contractors selected by
Tenant from such list or lists); no Alteration or decoration shall
affect any part of the Building other than the Demised Premises or
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adversely affect any service required to be furnished by Owner to Tenant
or to any other tenant or occupant of the Building or reduce the value
or utility of the Building; no Alteration or decoration shall affect
the outside appearance of the Building or the color or style of any
venetian blinds (except that Tenant may remove any venetian blinds
provided that they are promptly replaced by Tenant with blinds of a
similar type, material and color); all business machines and mechanical
equipment shall be placed and maintained by Tenant in settings
sufficient, in Owner's reasonable judgement, to absorb and prevent
vibration, noise and annoyance to other tenants or occupants of the
Building; Tenant shall submit to Owner detailed plans and
specifications which approval shall not be unreasonably withheld or
delayed prior to the commencement of such proposed Alteration, Tenant
shall have procured and paid for, and exhibited to Owner, so far as the
same may be required from time to time, all permits and authorizations
of all municipal departments and governmental subdivisions and
authorities having or claiming jurisdiction; prior to the commencement
of each proposed Alteration or decoration, Tenant shall furnish to Owner
duplicate original policies or certificates of workmen's compensation
insurance covering all persons to be employed in connection with such
Alteration or decoration, including those to be employed by all
contractors and subcontractors, and of comprehensive public liability
insurance (including
ARTICLE 4
OWNERS OF IMPROVEMENTS
Section 4.01. All appurtenances, fixtures, improvements,
additions and other property attached to or installed in the
premises demised in this lease, whether by Owner or Tenant
or others, and whether at Owner's expense, or Tenant's
expense, or the joint expense of Owner and Tenant, shall be
and remain the property of Owner, except that any such
fixtures, improvements, additions and other property
installed at the sole expense of Tenant with respect to
which Tenant has not been granted any credit or allowance by
Owner, whether pursuant to Schedule A or otherwise, and
which are removable without material damage to the said
premises shall be and remain the property of Tenant and are
referred to as "Tenant's Personal Property". Any
replacements of any property of Owner, whether made at
Tenant's expense or otherwise, shall be and remain the
property of Owner. (See Article 40)
ARTICLE 5
REPAIRS
Section 5.01 . Tenant shall take good care of the Demised
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Premises (including, but not limited to, any Class E Fire
Alarm and Communication system and any sprinkler system and
any installations made or equipment installed. as a result
of any requirement of New York City Local Law #16 of 1984 or
any successor law of like import) and, at Tenant's sole cost
and expense, shall make all repairs and replacements,
structural and otherwise, ordinary and extraordinary,
foreseen and unforeseen, as and when needed to preserve the
Demised Premises (including, but not limited to, any Class E
Fire Alarm and Communication system and any sprinkler system
and any installations made or equipment installed as a
result of any requirement of New York City Local Law # 16 of
1984 or any successor law of like import) in good and safe
working order and in first class repair and condition,
except that Tenant shall not be required to make any such
structural repairs or structural replacements to the Demised
Premises unless necessitated or occasioned by the acts,
omissions or negligence of Tenant or any person claiming
through or under Tenant, or any of their servants,
employees, contractors, agents, visitors or licensees, or by
the manner of use or occupancy of the Demised Premises by
Tenant or any such person (in contradistinction to the mere
use or occupancy of the Demised Premises for the purposes
set forth in Section 2.01). Without affecting Tenant's
obligations set forth in the preceding sentence, Tenant, at
Tenant's sole cost and expense, shall also (i) make all
repairs and replacements, and perform all maintenance as and
when necessary, to the lamps, tubes, ballasts, and starters
in the lighting fixtures installed in the Demised Premises,
(ii) make all repairs and replacements, as and when
necessary, to Tenant's Personal Property and to any
Alterations made or performed by or on behalf of Tenant or
any person claiming through or under Tenant, and (iii) if
the Demised Premises shall include any space on any ground,
street, mezzanine or basement floor in the Building, make
all replacements, as and when necessary, to all windows and
plate and other glass in, on or about such space, and obtain
and maintain, throughout the Demised Term, plate glass
insurance policies issued by companies, and in form and
amounts, satisfactory to Owner, in which Owner, its agents
and any lessor under any ground or underlying lease shall be
named as parties insured, and (iv) perform all maintenance
and make all repairs and replacements, as and when
necessary, to any air conditioning equipment, private
elevators, escalators, conveyors or mechanical systems
(other than the Building's standard equipment and systems
including, without limitation, the core toilets) which may
be installed in the Demised Premises by Owner, Tenant or
others. However, the provisions of the foregoing sentence
shall not be deemed to give to Tenant any right to install
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air conditioning equipment, elevators, escalators, conveyors
or mechanical systems. All repairs and replacements made by
or on behalf of Tenant or any person claiming through or
under Tenant shall be made and performed in conformity with,
and subject to the provisions of, the third (3rd) sentence
of Section 3.01 and shall be at least equal in quality and
class to the original work or installation. The necessity
for, and adequacy of, repairs and replacements pursuant to
this Article 5 shall be measured by the standard which is
appropriate for first class office buildings of similar
construction and class in the Borough of Manhattan, City of
New York. (See Article 49)
ARTICLE 6
COMPLIANCE WITH LAWS
Section 6.01. Tenant at Tenant's sole cost and expense,
shall comply with all present and future laws, orders and
regulations (including, but not limited to, the New York
State Energy Conservation Construction Code) of Federal,
State, County and Municipal authorities, and with all
directions, requirements, orders and notices of violation
thereof, issued by all public officers, which shall impose
any duty upon Owner or Tenant with respect to the Demised
Premises or the use or occupation thereof, including, but
not limited to, any requirement that any hazardous material
be dealt with in any particular manner, whether ordinary or
extraordinary, foreseen or unforeseen, except that Tenant
shall not be required to make any structural Alterations in
order so to comply unless such Alterations shall be
necessitated or occasioned, in whole or in pan, by the acts,
omissions, or negligence of Tenant or any person claiming
through or under Tenant, or any of their servants,
employees, contractors, agents, visitors or licensees, or by
the manner of use or occupancy of the Demised Premises by
Tenant or by any such person (in contradistinction to the
mere use or occupancy of the Demised Premises for the
purposes set forth in Section 2.01). Any work or
installations made or performed by or on behalf of Tenant or
any person claiming through or under Tenant pursuant to the
provisions of this Article shall be made in conformity with,
and subject to the provisions of, the third (3rd) sentence
of Section 3.01. For the purposes of this Article, any
requirement that any hazardous material be dealt with in any
particular manner shall be deemed to be a non-structural
Alteration. Compliance with any requirement regarding any
hazardous material shall be made in conformity with the
provisions of Section 3.06.
Section 6.02. Tenant shall not do anything, or permit
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anything to be done, in or about the Demised Premises which
shall (i) invalidate or be in conflict with the provisions
of any fire or other insurance policies covering the
Building or any property located therein, or (ii) result in
a refusal by fire insurance companies of good standing to
insure the Building or any such property in amounts
reasonably satisfactory to Owner, or (iii) subject Owner to
any liability or responsibility for injury to any person or
property by reason of any business operation being conducted
in the Demised Premises, or (iv) cause any increase in the
fire insurance rates applicable to the Building or property
located therein at the beginning of the Demised Term or at
any time thereafter. Tenant, at Tenant's expense, shall
comply with all present and future rules, orders,
regulations and requirements of the New York Board of Fire
Underwriters and the New York Fire Insurance Rating
Organization or any similar body and the issuer of any
insurance obtained by Owner covering the Building and/or the
Real Property, whether ordinary or extraordinary, foreseen
or unforeseen, including but not limited to, any requirement
that any hazardous material be dealt with in any particular
manner.
Section 6.03. In any action or proceeding wherein Owner and
Tenant are parties, a schedule or "make up" of rates
applicable to the Building or property located therein
issued by the New York Fire Insurance Rating Organization,
or other similar body fixing such fire insurance rates,
shall be conclusive evidence of the facts therein stated and
of the several items and charges in the fire insurance rates
then applicable to the Building or property located therein.
(See Article 52)
ARTICLE 7
REPLACED BY ARTICLE 47
ARTICLE 8
PROPERTY LOSS, ETC.
Section 8.01. Any Building employee to whom any property
shall be entrusted by or on behalf of Tenant shall be deemed
to be acting as Tenant's agent with respect to such property
and neither Owner nor Owner's agents shall be liable for any
loss of, or damage to, any such property by they or
otherwise. Neither (i) the performance by Owner, Tenant or
others of any decorations, repairs adaptions, additions or
improvements in or to the Building or the Demised Premises,
nor (ii) the failure of Owner or others to make any such
decorations, repairs, alterations, additions or
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improvements, nor (iii) any damage to the Demised Premises
or to the property of Tenant, nor any injury to any persons,
caused by other tenants or persons in the Building, or by
operations in the construction of any private, public or
quasi-public work or by any other cause, nor (iv) any latent
defect in the Building or in the Demised Premises, nor (v)
any temporary closing, darkening or bricking up of any
window of the Demised Premises for any reason whatsoever
including, but not limited to, Owner's own or any permanent
closing, darkening or bricking up of such windows if
required by law or in connection with any construction upon
adjacent property by Owner or others, nor (iv) any
inconvenience or annoyance to Tenant or injury to or
interruption of Tenant's business by reason of any of the
events or occurrences referred to in the foregoing
subdivisions (i) thorough (v), shall constitute an actual or
constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or
impose any liability upon Owner, or its agents, or any
lessor under any ground or underlying lease, other than such
liability as may be imposed upon Owner by law for Owner's
negligence or the negligence of Owner's agents, servants or
employees in the operation or maintenance of the Building or
for the breach by Owner of any express covenant of this
Lease on Owner's part to be performed. Tenant's taking
possession of the Demised Premises shall be conclusive
evidence, as against Tenant, that, at the time such
possession was so taken, the Demised Premises and the
Building were in good and satisfactory condition and Owner's
Initial Construction was substantially completed. Access to
the Demised Premises by Tenant's contractors as permitted
by, and in accordance with the provisions of Schedule A
shall not be deemed to constitute possession of the Demised
Premises for purposes of this Section 8.01, or affect
Owner's obligation to complete Owner's initial construction.
ARTICLE 9
DESTRUCTION - FIRE OR OTHER CASUALTY
Section 9.01. If the Demised Premises shall be damaged by
fire or other casualty and if Tenant shall give prompt
notice to Owner of such damage, Owner, at Owner's expense,
shall repair such damage. However, Owner shall have no
obligation to repair any damage to, or to replace, Tenant's
Personal Property or any other property or effects of
Tenant. Except as otherwise provided in Section 9.03, if
the entire Demised Premises shall be rendered untenantable
by reason of any such damage, the Fixed Rent shall abate for
the period from the date of such damage to the date when
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such damage shall have been repaired, and if only a part of
the Demised Premises shall be so rendered untenantable, the
Fixed Rent shad abate for such period in the proportion
which the area of the part of the Demised Premises so
rendered untenantable bears to the total area of the Demised
Premises. However, if, prior to the date when all of such
damage shad have been repaired, any part of the Demised
Premises so damaged shall be rendered tenantable and shall
be used or occupied by Tenant or any person or persons
Claiming through or under Tenant, then the amount by which
the Fixed Rent shall abate shall be equitably apportioned
for the period from the date of any such use or occupancy to
the date when all such damage shall have been repaired.
Owner agrees that if it is reimbursed by its rent insurance
policies covering the Building for a time period following
the date that the Demised Premises, or any part thereof,
shall once again become tenantable and prior to the date
Tenant shall resume the conduct of its business in the
Demised Premises or such part thereof, in which time period
Tenant enters the Demised Premises to perform work therein
to re-install or repair its business equipment and other
personal property, any abatement with respect to such space
shall extend beyond the date that such space has become so
tenantable by the number of days that such rent insurance
policy provides Owner with reimbursement for Tenant to
perform such work. Owner further agrees to attempt, in good
faith, to give to Tenant a non-binding notice estimating the
date that the Demised Premises or the applicable portion
thereof shall become tenantable at least fifteen (15) days
prior thereto, without any liability if the Demised Premises
are not rendered tenantable by the date fixed in said
notice. Tenant hereby expressly waives the provisions of
Section 227 of the New York Real Property Law, and of any
successor law of like import then in force, and Tenant
agrees that the provisions of this Article shall govern and
control in lieu thereof. Notwithstanding the foregoing
provisions of this Section, if, prior to or during the
Demised Term, (i) the Demised Premises shad be totally
damaged or rendered wholly untenantable by fire or other
casualty, and if Owner shall decide not to restore the
Demised Premises, or (ii) the Building shall be so damaged
by fire or other casualty that, in Owner's opinion,
substantial alteration, demolition, or reconstruction of the
Building shall be required (whether or not the Demised
Premises shall have been damaged or rendered untenantable),
then, in any of such events, Owner, at Owner's option, may
give to Tenant, within ninety (90) days after such fire or
other casualty, a five (5) days' notice of termination of
this Lease and, in the event such notice is given, this
Lease and the Demised Term shall come to an end and expire
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(whether or not said term shall have commenced) upon the
expiration of said five (5) days with the same effect as if
the date of expiration of said five (5) days were the
Expiration Date, the Fixed Rent shall be apportioned as of
such date and any prepaid portion of Fixed Rent for any
period after such date shall be refunded by Owner to Tenant.
If Owner shall be obligated to repair any damage pursuant to
this Section, Owner agrees to commence such repairs within a
reasonable time after the occurrence of such damage and
thereafter to complete such repairs with reasonable
diligence (without any obligation, however, to employ labor
at overtime or other premium pay rates).
Section 9.02. Owner now has and shall attempt to maintain,
throughout the Demised Term, in Owner's fire insurance
policies covering the Building, provisions to the effect
that such policies shall not be invalidated should the
insured waive, in writing, prior to a loss, any or all right
of recovery against any party for loss occurring to the
Building. In the event that at any time Owner's fire
insurance carriers shall exact an additional premium for the
inclusion of such or similar provisions, Owner shall give
Tenant notice thereof. In such event, if Tenant agrees, in
writing, to reimburse Owner for such additional premium for
the remainder of the Demised Term, Owner shall require the
inclusion of such or similar provisions by Owner's fire
insurance carriers. As long as such or similar provisions
are included in Owner's fire insurance policies then in
force, Owner hereby waives (i) any obligation on the part of
Tenant to make repairs to the Demised Premises necessitated
or occasioned by fire or other casualty that is an insured
risk under such policies, and (ii) any right of recovery
against Tenant, any other permitted occupant of the Demised
Premises, and any of their servants, employees, agents or
contractors, for any loss occasioned by fire or other
casualty that is an insured risk under such policies. In the
event that at any time Owner's fire insurance carriers shall
not include such or similar provisions in Owner's fire
insurance policies, the waivers set forth in the foregoing
sentence shall, upon notice given by Owner to Tenant, be
deemed of no further force or effect. During any period
while the foregoing waiver of right of recovery is in
effect, Owner shall look solely to the proceeds of such
policies to compensate Owner for any loss occasioned by fire
or other casualty which is an insured risk under such
policies or under other insurance policies covering risks
against which a reasonably prudent landlord in the Borough
of Manhattan would carry insurance for similar office
buildings.
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Section 9.03. Except as expressly provided Section 9.02,
nothing contained in this Lease shall relieve Tenant of any
liability to Owner or to its insurance carriers which Tenant
may have under law or the provisions of this Lease in
connection with any damage to the Demised Premises or the
Building by fire or other casualty. Notwithstanding the
provisions of Section 9.01, if any such damage, occurring
after any date when the waivers set forth in Section 9.02
are no longer in force and effect, is due to the fault or
neglect of Tenant, any person claiming through or under
Tenant, or any of their servants, employees, agents,
contractors, visitors or licensees, then there shall be no
abatement of Fixed Rent by reason of such damage.
Section 9.04. Tenant acknowledges that it has been advised
that Owner's insurance policies do not cover Tenant's
Personal Property or any other property of Tenant in the
Demised Premises; accordingly, it shall be Tenant's
obligation to obtain and maintain insurance covering its
property in the Demised Premises and loss of profits
including, but not limited to, water damage coverage and
business interruption insurance. Tenant shall attempt to
obtain and maintain, throughout the Demised Term, in
Tenant's fire and other insurance policies covering Tenant's
Personal Property and other property of Tenant in the
Demised Premises, and Tenant's use and occupancy of the
Demised Premises, and/or Tenant's profits (and shall cause
any other permitted occupants of the Demised Premises to
attempt to obtain and maintain, in similar policies),
provisions to the effect that such policies shall not be
invalidated should the insured waive, in writing, prior to a
loss, any or all right of recovery against any party for
loss occasioned by fire or other casualty which is an
insured risk under such policies in the event that at any
time the insurance carriers issuing such policies shall
exact an additional premium for the inclusion of such or
similar provisions, Tenant shall give Owner notice thereof.
In such event, if Owner agrees, in writing, to reimburse
Tenant or any person claiming through or under Tenant, as
the case may be, for such additional premium for the
remainder of the Demised Term, Tenant shall require the
inclusion of such or similar provisions by such insurance
carriers. As long as such or similar provisions are included
in such insurance policies then in force, Tenant hereby
waives (and agrees to cause any other permitted occupants of
the Demised Premises to execute and deliver to Owner written
instruments waiving) any right of recovery against Owner,
any lessors under any ground or underlying leases, any other
tenants or occupants of the Building, and any servants,
employees, agents or contractors of Owner or of any such
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lessor, or of any such other tenants or occupants, for any
loss occasioned by fire or other casualty which is an
insured risk under such policies. In the event that at any
time such insurance earners shall not include such or
similar provisions in any such insurance policy, the waiver
set forth in the foregoing sentence (or in any written
instrument executed by any other permitted occupant of the
Demised Premises) shall, upon notice given by Tenant to
Owner, be deemed of no further force or effect with respect
to any insured risks under such policy from and after the
giving of such notice. During any period while any such
waiver of right of recovery is in effect, Tenant, or any
other permitted occupant of the Demised Premises, as the
case may be, shall look solely to the proceeds of such
policies to compensate Tenant or such other permitted
occupant for any loss occasioned by fire or other casualty
which is an insured risk under such policies or under other
insurance policies covering risks against which a reasonably
prudent tenant with a similar use in the Burough of
Manhattan would carry insurance. (See Article 41)
ARTICLE 10
EMINENT DOMAIN
Section 10.01. If the whole of the Demised Premises shall be
acquired for any public or quasi-public use or purpose,
whether by condemnation or by deed in lieu of condemnation,
this Lease and the Demised Term shall end as of the date of
the vesting of title with the same effect as if said date
were the Expiration Date. If only a part of the Demised
Premises shall be so acquired or condemned then, except as
otherwise provided in this Section, this Lease and the
Demised Term shall continue in force and effect but, from
and after the date of the vesting of title, the Fixed Rent
shall be reduced in the proportion which the area of the
part of the Demised Premixes so acquired or condemned bears
to the total area of the Demised Premises immediately prior
to such acquisition or condemnation. If only a part of the
Real Property shall be so acquired or condemned, then (i)
whether or not the Demised Premises shall be affected
thereby, Owner, at Owner's option, may give to Tenant,
within sixty (60) days next following the date upon which
Owner should have received notice of vesting of title, a
five (5) days' notice of termination of this Lease, and (ii)
if the part of the Real Property so acquired or condemned
shall contain more than ten (10%) per cent of the total area
of the Demised Premises immediately prior to such
acquisition or condemnation, or if, by reason of such
acquisition or condemnation, Tenant no longer has reasonable
means of access to the Demised Premises, Tenant, at Tenant's
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option, may give to Owner, within sixty (60) days next
following the date upon which Tenant shall have received
notice of vesting of title, a five (5) days' notice of
termination of this Lease. In the event any such five (5)
days notice of termination is given, by Owner or Tenant,
this Lease and the Demised Term shall come to an end and
expire upon the expiration of said five (5) days with the
same effect as if the date of expiration of said five (5)
days were the Expiration Date. If a part of the Demised
Premises shall be so acquired or condemned and this Lease
and the Demised Term shall not be terminated pursuant to the
foregoing provisions of this Section, Owner, at Owner's
expense, shall restore that part of the Demised Premises not
so acquired or condemned to a self-contained rental unit in
the event of any termination of this lease and the Demised
Term pursuant to the provisions of this Section, the Fixed
Rent shall be
apportioned as of the date of such termination and any
prepaid portion of Fixed Rent for any period after such date
shall be refunded by Owner to Tenant.
Section 10.02. In the event of any such acquisition or
condemnation of all or any part of the Real Property, Owner
shall be entitled to receive the entire award for any such
acquisition or condemnation, Tenant shall have no claim
against Owner or the condemning authority for the value of
any unexpired portion of the Demised Term and Tenant hereby
expressly assigns to Owner all of its right in and to any
such award. Nothing contained in this Section shall be
deemed to prevent Tenant from making a claim in any
condemnation proceedings for the value of any items of
Tenant's Personal Property which are compensable, in law, as
trade fixtures.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
Section 11.01. Tenant, for itself, its heirs, distributees,
executors, administrators, legal representatives, successors
and assigns, covenants that, without the prior consent of
Owner in each instance, it shall not (i) assign whether by
merger, consolidation or otherwise, mortgage or encumber its
interest in this lease, in whole or in part, or (ii) sublet,
or permit the subletting of, the Demised Premises or any
part thereof or (iii) permit the Demised Premises or any
part thereof to be occupied, or used for desk space, mailing
privileges or otherwise, by any person other than Tenant.
Subject to the provisions of Section 42.02, the sale,
pledge, transfer or other alienation of (a) any of the
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issued and outstanding capital stock of any corporate Tenant
(unless such stock is publicly traded on a recognized
security exchange or over-the-counter market) or (b) any
interest in any partnership or joint venture Tenant,
however, accomplished, and whether in a single transaction
or in a series of related or unrelated transactions, shall
be deemed for the purposes of this Section as an assignment
of this Lease which shall require the prior consent of Owner
in each instance.
Section 11.02. If Tenant's interest in this Lease is
assigned, whether or not in violation of the provisions of
this Article, Owner may collect rent from the assignee; if
the Demised Premises or any part thereof are sublet to, or
occupied by, or used by, any person other than Tenant,
whether or not in violation of this Article, Owner, after
default by Tenant under this Lease, may collect rent from
the subtenant, user or occupant. In either case, Owner shall
apply the net amount collected to the rents reserved in this
Lease, but neither any such assignment, subletting,
occupancy, or use, whether with or without Owner's prior
consented nor any such collection or application, shall be
deemed a waiver of any term, covenant or condition of this
Lease or the acceptance by Owner of such assignee,
subtenant, occupant or user as tenant The consent by Owner
to any assignment, subletting, occupancy or use shall not
relieve Tenant from its obligation to obtain the express
prior consent of Owner to any further assignment,
subletting, occupancy or use. The listing of any name other
than that of Tenant on any door of the Demised Premises or
on any directory or in any elevator in the Building, or
otherwise, shall not operate to vest in the person so named
any right or interest in this Lease or in the Demised
Premises or the Building, or be deemed to constitute, or
serve as a substitute for, any prior consent of Owner
required under this Article, and it is understood that any
such listing shall constitute a privilege extended by Owner
which shall be revocable at Owner's will by notice to
Tenant. Tenant agrees to pay to Owner reasonable counsel
fees incurred by Owner in connection with any proposed
assignment of Tenant's interest in this Lease or any
proposed subletting of the Demised Premises or any part
thereof. Neither any assignment of Tenant's interest in this
Lease nor any subletting, occupancy or use of the Demised
Premises or any part thereof by any person other than
Tenant, nor any collection of rent by Owner from any person
other than Tenant as provided in this Section, nor any
application of any such rent as provided in this Section
shall, in any circumstances, relieve Tenant of its
obligation fully to observe and perform the terms, covenants
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and conditions of this Lease on Tenant's part to be observed
and performed.
Section 11.03. As long as Tenant is not in default under any
of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed beyond the
applicable grace period provided in the Lease for curing of
such default. Owner agrees not to unreasonably withhold or
delay Owner's prior consent to sublettings by Tenant of all
or parts of the Demised Premises to not more than four (4)
subtenants. Each such subletting shall be for undivided
occupancy by the subtenant (ie. with no further right on the
part of such subtenant to further sublet space) of that part
of the Demised Premises affected thereby, for the use
permitted in this Lease, and at no time shall there be more
than four (4) occupants, including Tenant in the Demised
Premises. Without Owner's prior consent, Tenant shall not
(a) negotiate or enter into a proposed subletting with any
tenant, subtenant or occupant of any space in the Building
or (b) publicly advertise the Demised Premises or any part
thereof for subletting at a rental lower than the higher of
(i) the Fixed Rent, then in effect, allocable to the space
sought to be sublet or (ii) the rental at which the Owner is
then offering to rent comparable space in the Building. At
least thirty (30) days prior to any proposed subletting,
Tenant shall submit to Owner a statement containing the name
and address of the proposed subtenant and all of the
principal terms and conditions of the proposed subletting
including, but not limited to, the proposed commencement and
expiration dates of the term thereof. Unless the proposed
sublet area shall constitute an entire floor or floors, such
statement shall be accompanied by a floor plan delineating
the proposed sublet area. Owner may, however, withhold such
consent if, in Owner's reasonable judgment, the occupancy of
the proposed subtenant will tend to impair the character or
dignity of the Building or impose any additional material
burden upon Owner in the operation of the Building or if the
owner shall have any other reasonable objections to the
proposed subletting. In the event of any dispute between
Owner and Tenant as to the reasonableness of Owner's failure
or refusal to consent to any subletting, such dispute shall
be submitted to arbitration, in accordance with the
provisions of Article 36. Notwithstanding the foregoing
provisions of this Section, (I) in the event Tenant proposes
to sublet all or substantially all of the Demised Premises
whether or not such subletting is for all or substantially
all of the remainder of the Demised Term, Owner at Owners
option, may give to Tenant, within thirty (30) days after
the submission by Tenant to Owner of the statement required
to be submitted in connection with subletting, a notice
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terminating this Lease on the date (referred to as the
"Earlier Termination Date") immediately prior to the
proposed commencement date of the term of the proposed
subletting, as set forth in such statement, and, in the
event such notice is given, this Lease and the Demised Term
shall come to an end and expire on the Earlier Termination
Date with the same effect as if it were the Expiration Date,
the Fixed Rent shall be apportioned as of said Earlier
Termination Date and any prepaid portion of Fixed Rent for
any period after such date shall be refunded by Owner to
Tenant; or (2) in the event Tenant proposes to sublet all or
any portion of the Demised Premises, Owner, at Owner's
option, may give to Tenant, within thirty (30) days after
the submission by Tenant to Owner, of the statement required
to be submitted in connection with such proposed subletting
affecting one half (1/2) or more than one half (1/2) of the
Demised Premises or within twenty (20) days after the
submission by Tenant to Owner of the statement required to
be submitted in connection with such proposed subletting
affecting less than one half (1/2) of the Demised premises,
notice electing to eliminate such portion of the Demised
Premises (said portion is referred to as the "Eliminated
Space") from the Demised Premises during the period
(referred to as the "Elimination Periods) commencing on the
date (referred to as the "Elimination Date") immediately
prior to the proposed commencement date of the term of the
proposed subletting, as set forth in such statement, and
ending on the proposed expiration date of the term of the
proposed subletting, as set forth in such statement, and in
the event such notice is given (i) the Eliminated Space
shall be eliminated from the Demised Premises during the
Elimination Period; (ii) Tenant shall surrender the
Eliminated Space to Owner on or prior to the Elimination
Date in the same manner as if said Date were the Expiration
Date; (iii) if the Eliminated Space shall constitute less
than an entire floor, (a) Owner, at Owner's expense, shall
have the right to make any alterations and installations in
the Demised Premises required, in Owner's judgement,
reasonably exercised, to make the Eliminated Space a
self-contained rental unit with access through corridors to
the elevators and core toilets serving the Eliminated Space,
and if the Demised Premises shall contain any core toilets
or any corridors (including any corridors proposed to be
constructed by Owner pursuant to this subdivision [iii]),
providing access from the Eliminated Space to the core area,
(b) Owner and any tenant or other occupant of the Eliminated
Space shall have the right to use such toilets and corridors
in common with Tenant and any other permitted occupants of
the Demised Premises, and the right to install signs and
directional indicators in or about such corridors indicating
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the name and location of such tenant or other occupant; (iv)
during the Elimination Period, the Fixed Rent and Tenant's
Proportionate Share (as defined in Article 23), shall each
be reduced in the proportion which the area of the
Eliminated Space bears to the total area of the Demised
Premises immediately prior to the Elimination Date
(including an equitable portion of the area of any corridors
referred to in subdivision (iii) of this sentence as part of
the area of the Eliminated Space for the purpose of
computing such reduction), and in the event that the
Eliminated Space shall be the entire Demised Premises,
during the Elimination Period, Tenant shall have no rights
with respect to the Demised Premises nor any obligations
with respect to the Demised Premises, including, but not
limited to, any obligations to pay Fixed Rent or any
increases therein or any additional rent, and any prepaid
portion of Fixed Rent for any period after the Elimination
Date allocable to the Eliminated Space shall be refunded by
Owner to Tenant; (v) there shall be an equitable
apportionment of any increase in the Fixed Rent pursuant to
Article 23 for the Escalation Year and Tax Escalation Year
(as defined in Article 23) in which said Elimination Date
shall occur, (vi) if the Elimination Period shall end prior
to the Expiration Date, the Eliminated Space, in its then
existing condition (provided such condition shall enable the
Eliminated Space to be used reasonably for general office
purposes), shall be deemed restored to and once again a part
of the Demised Premises during the period (referred to as
the "Restoration Period") commencing on the date next
following the expiration of the Elimination Period and
ending on the Expiration Date, (vii) during the Restoration
Period, if any, the Fixed Rent and Tenant's Proportionate
Share, shall each be increased in the proportion which the
area of the Eliminated Space bears to the total area of the
Demised Premises immediately prior to the commencement of
the Restoration Period (including an equitable portion of
the area of any corridors referred to in subdivision (iii)
of this sentence as a part of the area of the Eliminated
Space for the purpose of computing such increase) and in the
event that the Eliminated Space shall be the entire Demised
Premises, during the Restoration Period, the Demised
Premises, in its then existing condition (provided such
condition shall enable the Eliminated Space to be used
reasonably for general office purposes), shall be deemed
restored to Tenant and Tenant shall have all rights with
respect to the Demised Premises which are set forth in this
Lease and all obligations with respect to the Demised
Premises which are set forth in this Lease, including, but
not limited to, the obligations for the payment of Fixed
Rent and any increases therein and any additional rent (as
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they would have been adjusted if Tenant occupied the Demised
Premises during the Elimination Period); and (viii) there
shall be an equitable apportionment of any increase in the
Fixed Rent pursuant to Article 23 for the Escalation Year
and Tax Escalation Year in which the Restoration Period, if
any, shall commence; however, notwithstanding the foregoing,
Owner and Tenant acknowledge the possibility that all or any
of the tenants or occupants of the Eliminated Space may not
have vacated and surrendered all or any portions of the
Eliminated Space to Owner by the commencement of the
Restoration Period; accordingly, notwithstanding anything to
the contrary contained in the foregoing provisions of this
Section (x) the Restoration Period applicable to the
Eliminated Space shall commence on the commencement of the
Restoration Period with expect to those portions, if any, of
the Eliminated Space which are vacant on the commencement of
the Restoration Period and with respect to those portions,
if any, of the Eliminated Space which are not vacant on the
commencement of the Restoration Period on the respective
later date or dates upon which such portions of the
Eliminated Space become vacant and Owner gives notice to
Tenant of such vacancy and the Expiration Date
shall not be affected thereby, the increases in the Fixed
Rent and Tenant's Proportionate Share shall be equitably
adjusted to reflect the fact that all or any portions of the
Eliminated Space have not been restored to Tenant on the
commencement of the Restoration Period but are restored to
Tenant and included back in the Demised Premises on a date
or dates after the commencement of the Restoration Period
and (y) except as set forth in this sentence, neither the
validity of this Lease nor the obligations of Tenant under
this Lease shall be affected thereby and (z) Tenant waives
any right to rescind this Lease and to recover any damages
which may result from the failure of Owner to deliver
possession of all or any portion of the Estimated Space on
the commencement of the Restoration Period. At the request
of Owner, Tenant shall execute and deliver an instrument or
instruments in form satisfactory to Owner, setting forth any
modifications to this Lease contemplated in or resulting
from the operation of the foregoing provisions of this
Section; however, neither Owner's failure to request any
such instrument nor Tenant's failure to execute or deliver
any such instrument shall vitiate the effect of the
foregoing provisions of this Section. The failure by Owner
to exercise any option under this Section with respect to
any subletting shall not be deemed a waiver of such option
with respect to any extension of such subletting or any
subsequent subletting of the premises affected thereby or
any other portion of the Demised Premises. Owner and Tenant
agree that (xx) any increase in the rental value of the
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Demised Premises over and above the fixed Rent payable
pursuant to the provisions of this Lease, as such Fixed Rent
may be increased from time to time pursuant to the
provisions of this Lease, and (yy) any consideration paid to
Tenant or any subtenant or other person claiming through or
under Tenant in connection with an assignment of the
Tenant's interest in this Lease or the interest of any
subtenant or other person claiming through or under Tenant
under any sublease whether or not such assignment shall be
effected with court approval in a proceeding of the types
described in subsection 16.01 (c) or (d), or in any similar
proceeding, or otherwise, shall accrue to the benefit of
Owner and not to the benefit of Tenant, or of any subtenant
or other person claiming through or under Tenant, or of the
creditors of Tenant or of any such subtenant or other person
claiming through or under Tenant Accordingly, it is agreed
that if Owner shall fail to exercise its option to sooner
terminate this Lease in connection with any proposed
subletting by Tenant of all or substantially all of the
Demised Premises, or its option to eliminate the Demised
Premises or to eliminate from the Demised Premises any
portion thereof in connection with any proposed subletting
by Tenant of the entire Demised Premises or any portion
thereof, or if any subtenant or other person claiming
through or under Tenant shall sublet all or any portion of
the Demised Premises, Tenant shall pay to Owner a sum equal
to any Subletting Profit, as such term is hereinafter
defined. All rentals and other sums payable by any subtenant
to Tenant or to any subtenant or other person claiming
through or under Tenant in connection with (i) any
subletting of the entire Demised Premises in excess of the
Fixed Rent then payable by Tenant to Owner under this Lease,
or (ii) any subletting of a portion of the Demised Premises
in excess of that proportion of the fixed Rent payable by
Tenant to Owner under this Lease which the area of the
portion of the Demised Premises so Sublet bears to the total
area of the Demised Premises, are referred to, in the
aggregate as "Subletting Profit"; in computing any
Subletting Profit there shall be deducted first brokerage
commission, reasonable legal and other professional fees and
Alteration costs (which Alteration costs shall not exceed an
amount equal to Twenty Five ($25.00) Dollars per rentable
sq. ft. of the sublet space in question), reasonable
advertising fees and reasonable rent concession periods (not
to exceed three [3] months for any subletting) any such
commissions, legal and other professional fees, Alteration
costs, advertising fees and rent concessions shall be paid
or granted by tenant or any such subtenant or other person
claiming through or under Tenant in connection with such
subletting owner and Tenant such that if Tenant, or any
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subtenant or other person claiming through or under Tenant,
shall assign or have assigned its interest as Tenant under
this Lease or its interest as subtenant under any sublease
as the case may be, whether or not such assignment shall be
effected with court approval in a projecting of the types
described in subsections 16.01 (c) or (d), or in any similar
proceeding, or otherwise Tenant shall pay to Owner a sum
equal to any consideration paid to Tenant or any subtenant
or other person claiming through or under Tenant for such
assignment. All sums payable hereunder by Tenant shall be
paid to Owner as additional rent immediately upon such sums
being paid (after the permitted deductions from Subletting
Profits referred to in the preceding provisions of this
section have first been recouped) to Tenant or to any
subtenant or other person claiming through or under Tenant
and, if requested by Owner, Tenant shall promptly enter into
a written agreement with Owner setting forth the amount of
such sums to be paid to Owner, however, neither Owner's
failure to request the execution of such agreement nor
Tenant's failure to execute such agreement shall vitiate the
provisions of this Section. For the purposes of this
Section, a trustee, receiver or other representative of the
Tenant's or any subtenant's estate under any federal or
state bankruptcy act shall be deemed a person claiming
through or under Tenant. Neither Owner's consent to any
subletting nor anything contained in this Section shall be
deemed to grant to any subtenant or other person claiming
through or under Tenant the right to sublet all or any
portion of the Demised Premises or to permit the occupancy
of all or any portion of the Demised Premises by others.
Neither any subtenant referred to in this Section nor its
heirs, distributes executors, administrators, legal
representatives, successors nor assigns without the prior
consent of Owner in each instance, shall (i) assign, whether
by merger, consolidation or otherwise, mortgage or encumber
its interest in any sublease, in whole or in part, or (ii)
sublet, or permit the subletting of, that part of the
Demised Premises affected by such subletting or any part
thereof, or (ii) permit such part of the Demised Premises
affected by such subletting or any part thereof to be
occupied or used for desk space, mailing privileges or
otherwise, by any person other than such subtenant and any
sublease shall provide that any violation of the foregoing
provisions of this sentence shall be an event of default
thereunder. The sale, pledge, transfer or other alienation
of (a) the issued and outstanding capital stock of any
corporate subtenant (unless such stock is publicly traded on
any recognized security exchange or over-the-counter market)
or (b) any interest in any partnership or joint venture
subtenant, however accomplished, and whether in a single
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transaction or in a series of related or unrelated
transactions, shall be deemed for the purposes of this
Section as an assignment of such sublease which shall
require the prior consent of Owner in each instance and any
sublease shall so provide.
Section 11.04. In the event that, at any time after Tenant
may have assigned Tenant's interest in this Lease, this
Lease shall be disaffirmed or rejected in any proceeding of
the types described in subsections 16.01 (c) and (d), or in
any similar proceeding, or in the event of termination of
this Lease by reason of any such proceeding or by reason of
lapse of time following notice of termination given pursuant
to Section 16.01 based upon any of the Events of Default set
forth in said subsections, Tenant, upon request of Owner
given within thirty (30) days next following any such
disaffirmance, rejection or termination (and actual notice
thereof to Owner in the event of a disaimance or rejection
or in the event of termination other than by act of Owner),
shall (i) pay to Owner all Fixed Rents additional rent and
other charges due and owing by the assignee to Owner under
this Lease to and including the date of such disaffirmance,
rejection or termination, and (ii) as "tenant", enter into a
new lease with Owner of the Demised Premises for a term
commencing on the effective date of such disaffirmance,
rejection or termination and ending on the Expiration Date
unless sooner terminated as in such lease provided, at the
same Fixed Rent and then executory terrns, covenants and
conditions as are contained in this Lease, except that (a)
Tenant's rights under the new lease shad be subject to the
pouessory rights of the assignee under this lease and the
posseuory right of any person claiming through or under such
assignee or by virtue of any statute or of any order of any
court, and (b) such new lease shall require all defaults
existing under this Lease to be cured by Tenant with due
diligence, and (c) such new lease shall require Tenant to
pay all increases in the Fixed Rent reserved in this Lease
which, had this lease not been so disaffirmed, rejected or
terminated, would have accrued under the provisions of
Article 23 of this lease after the date of such
disaffirmance, rejection or termination with respect to any
period prior thereto. in the event Tenant shall default in
its obligation to enter into said new lease for a period of
ten (10) days next following Owner's request therefor, then,
in addition to all other rights and remedies by reason of
such default, either at law or in equity, Owner shall have
the same rights and remedies against Tenant as if Tenant had
entered into such new lease and such new lease had
thereafter been terminated as at the commencement date
thereof by reason of Tenant's default thereunder. Nothing
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contained in this Section shall be deemed to grant to Tenant
any right to assign Tenant's interest in this Lease. (See
Article 42)
ARTICLE 12
OWNER'S INITIAL CONSTRUCTION
Section 12.01. Owner agrees to perform work and make
installations in the Demised Premises as set forth in
Schedule A. Such work: and installation (including, without
limitation, all work shown on Tenant's Plan which as been
approved by Owner in accordance with the provisions of
Schedule A) are referred to as "Owner's Initial
Construction". All of the terms, covenants and conditions of
Schedule A are incorporated in this lease by reference and
shall be deemed a part of this Lease as though fully set
forth in the body of this Lease.
ARTICLE 13
ACCESS TO DEMISED PREMISES
Section l3.01. Owner and its agents shall have the
following rights in and about the Demised Premises: (i) to
enter the Demised Premises at all times to examine the
Demised Premises or for any of the purposes set forth in
this Article or for the purpose of performing any obligation
of Owner under this Lease or exercising any right or remedy
reserved to Owner in this Lease, and if Tenant, its
officers, partners, agents or employees shall not be
personally present or shall not open and permit an entry
into the Demised Premises at any time when such entry shad
be necessary or permissible, to use a master key or to
forcibly enter the Demised Premises; (ii) to erect, instate
use and maintain pipes, ducts and conduits in and through
the Demised Premises; (iii) to exhibit the Demised Premises
to others; (iv) to make such decorations, repairs,
alterations, improvements or additions, or to perform such
maintenance, including, but not limited to, the maintenance
of all heating, air conditioning, elevator, plumbing,
electrical and other mechanical facilities, as Owner may
deem necessary or desirable; (v) to take all materials into
and upon the Demised Premises that may be required in
connection with any such decorations, repairs, alterations,
improvements, additions or maintenance; and (vi) to alter,
renovate and decorate the Demised Premises at any time
during the Demised Term if Tenant shall have removed all or
substantially all of Tenant's property from the Demised
Premises. The lessors under any ground or underlying lease
and the holders of any mortgages affecting any such ground
or underlying leases or the Building or the Real Property
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shall have the right to enter the Demised Premises from time
to time through their respective employees, agents,
representatives and architects to inspect the same or to
cure any default of Owner or Tenant relating thereto. Owner
shall have the right, from time to time, to change the name,
number or designation by which the Building is commonly
known which right shall include, without limitation the
right to name the Building after any Tenant. Tenant
acknowledges that Owner has advised Tenant that Owner
presently intends to name the Building the "D'arcy Masius
Benton & Bowles" or "DMB & B" Building.
Section 13.02. All parts (except surfaces facing the
interior of the Demised Premises) of all walls, windows and
doors bounding the Demised Premises (including exterior
Building walls, core corridor walls, doors and entrances),
all balconies, terraces and roofs adjacent to the Demised
Premises, all space in or adjacent to the Demised Premises
used for shafts, stacks, stairways, chutes, pipes, conduits,
ducts, fan rooms, heating, air conditioning, plumbing,
electrical, telecommunication and other mechanical
facilities, closets, service closets and other Building
facilities, and the use thereof, as well as access thereto
through the Demised Premises for the purposes of operation,
maintenance, alteration and repair, are hereby reserved to
Owner. Owner also reserves the right at any time to change
the arrangement or location of entrances, passageways,
doors, doorways, corridors, elevators, stairs, toilets and
other public parts of the Building, provided any such change
does not permanently ant unseasonably obstruct Tenant's
access to the Demised Premises. Nothing contained in this
Article shall impose any obligation upon Owner with respect
to the operation, maintenance, alteration or repair of the
Demised Premises or the Building.
Section 13.03. Owner and its agents shall have the right to
permit access to the Demised Premises, whether or not Tenant
shall be present, to any receiver, trustee, assignee for the
benefit of creditors, sheriff, marshal or court officer
entitled to, or reasonably purporting to be entitled to,
such access for the purpose of talking possession of, or
removing, any property of Tenant or any other occupant of
the Demised Premises, or for any other lawful purpose, or by
any representative of the fire, police, building, sanitation
or other department of the City, State or Federal
Governments. Neither anything contained in this Section, nor
any action taken by Owner under this Section, shall be
deemed to constitute recognition by Owner that any person
other than Tenant has any right or interest in this Lease or
the Demised Premises.
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Section 13.04. The exercise by Owner or its agents or by the
lessor under any ground or underlying lease or the holder of
any mortgage affecting the Building or the Real Property of
any right reserved in this Article shall not constitute an
actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under this Lease,
or impose any liability upon Owner, or its agents, or upon
any lessor under any ground or underlying lease or upon the
holder of any such mortgage, by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of
Tenant's business, or otherwise. (See Article 43)
ARTICLE 14
VAULT SPACE
Section 14.01. The Demised Premises do not contain any
vaults, vault space or other space outside the boundaries of
the Real Property, notwithstanding anything contained in
this Lease or indicated on any sketch, blueprint or plan.
Owner makes no representation as to the location of the
boundaries of the Real Property. All vaults and vault space
and all other space outside the boundaries of the Real
Property which Tenant may be permitted to use or occupy are
to be used or occupied under a revocable license, and if any
such license shall be revolted, or if the amount of such
space shall be diminished or required by any Federal, State
or Municipal Authority or by any public utility company,
such revocation, diminution or requisition shall not
constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of
rent, or relieve Tenant from any of its obligations under
this Lease, or impose any liability upon Owner. Any fee, tax
or charge imposed by any governmental authority for any such
vault, vault space when Tenant uses such vault, vault space
or other space shall be paid by Tenant.
ARTICLE 15
CERTIFICATE OF OCCUPANCY
Section 15.01. Tenant will not at any time use or occupy, or
permit the use or occupancy of, the Demised Premises in
violation of any Certificate(s) of Occupancy covering the
Demised Premises. Owner agrees that a temporary or permanent
Certificate(s) of Occupancy covering the Demised Premises
will be in force on the Commencement Date permitting the
Demised Premises to be used as "offices". However, neither
such agreement, nor any other provision of this Lease, nor
any act or omission of Owner, its agents or contractors,
shall be deemed to constitute a representation or warranty
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that the Demised Premises or any part thereof, may be
lawfully used or occupied for any particular purpose or in
any particular manner, in contradistinction to mere "office"
use.
ARTICLE 16
DEFAULT
Section 16.01. Upon the occurrence, at any time prior to or
during the Demised Term, of any one or more of the following
events (referred to as "Events of Default"):
(a) if Tenant shall default in the payment when due of
any installment of Fixed Rent or any increase in the Fixed
Rent or in the payment when due of any additional rent, and
such default shall continue for a period of seven (7) days
after notice by Owner to Tenant of such default; or
(b) if Tenant shall default in the observance or
performance of any term, covenant or condition of this Lease
on Tenant's part to be observed or performed (other than the
covenants for the payment of Fixed Rent, any increase in the
Fixed Rent and additional rent) and Tenant shall fail to
remedy such default within ten (10) days after notice by
Owner to Tenant of such default, or if such default is of
such a nature that it cannot be completely remedied within
said period of ten (10) days and Tenant shall not commence,
promptly after receipt of such notice or shall not
thereafter diligently prosecute to completion, all steps
necessary to remedy such default; or
(c) if Tenant shall file a voluntary petition in
bankruptcy or insolvency, or shall be adjudicated a bankrupt
or insolvent, or shall file any petition or answer seeking
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present
or any future federal bankruptcy act or any other present or
future applicable federal, state or other statute or law, or
shall make an assignment for the benefit of creditors, or
shall seek or consent to or acquiesce in the appointment of
any trustee, receiver or liquidator of Tenant or of all or
any part of Tenant's property; or
(d) if, within ninety (90) days after the commencement
of any proceeding against Tenant, whether by the filing of a
petition or otherwise, seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any
future federal bankruptcy act or any other present or future
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applicable federal, state or other statute or law, such
proceeding shall not have been dismissed, or if, within
ninety (90) days after the appointment of any trustee,
receiver or liquidator of Tenant, or of all or any part of
Tenant's property, without the consent or acquiescence of
Tenant, such appointment shall not have been vacated or
otherwise discharged, or if any execution or attachment
shall be issued against Tenant or any of Tenant's property
pursuant to which the Demised Premises shall be taken or
occupied or attempted to be taken or occupied; or
(e) if Tenant shall default in the observance or
performance of any term, covenant or condition on Tenant's
part to be observed or performed under any other lease with
Owner of space in the Building and such default shall
continue beyond any grace period set forth in such other
lease for the remedying of such default; or
(f) if the Demised Premises shall become vacant for
more than one hundred eighty (180) consecutive days,
deserted or abandoned; or
(g) if Tenant's interest in this Lease shall devolve
upon or pass to any person, whether by operation of law or
otherwise, except as expressly permitted under Article 11,
then, upon the occurrence, at any time prior to or during
the Demised Term, of any one or more such Events of Default,
Owner, at any time thereafter, at Owner's option, may give
to Tenant a five (5) days' notice of termination of this
Lease and, in the event such notice is given, this Lease and
the Demised Term shall come to an end and expire (whether or
not said term shall have commenced) upon the expiration of
said five (5) days with the same effect as if the date of
expiration of said five (5) days were the Expiration Date,
but Tenant shall remain liable for damages and all other
sums payable pursuant to the provisions of Article 18.
Section 16.02. If, at any time (i) Tenant shall be comprised
of two (2) or more persons, or (ii) Tenant's obligations
under this Lease shall have been guaranteed by any person
other than Tenant, or (iii) Tenant's interest in this Lease
shall have been assigned, the word "Tenant" as used in
subsections (c) and (d) of Section 16.01, shall be deemed to
mean any one or more of the persons primarily or secondarily
liable for Tenant's obligations under this Lease. Any
monies received by Owner from or on behalf of Tenant during
the pendency of any proceeding of the types referred to in
mid subsections (c) and (d) shall be deemed paid as
compensation for the use and occupation of the Demised
Premises and the acceptance of any such compensation by
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Owner shall not be deemed an acceptance of rent or a waiver
on the part of Owner of any rights under Section 16.01.
ARTICLE 17
REMEDIES
Section 17.01. If Tenant shall default in the payment when
due of any installment of Fixed Rent or in the payment when
due of any increase in the Fixed Rent or any additional rent
and such default shall continue for a period of seven (7)
days after notice by Owner to Tenant of such default, or if
this Lease and the Demised Term shall expire and come to an
end as provided in Article 16:
(a) Owner and its agents and servants may immediately,
or at any time after such default or after the date upon
which this Lease and the Demised Term shall expire and come
to an end, reenter the Demised Premises or any part thereof,
without notice, either by summary proceedings or by any
other applicable action or proceeding, or by force or
otherwise (without being liable to indictment, prosecution
or damages therefor), and may repossess the Demised Premises
and dispossess Tenant and any other persons from the Demised
Premises and remove any and all of their property and
effects from the Demised Premises; and
(b) Owner, at Owner's option, may relet the whole or
any part or parts of the Demised Premises, from time to
time, either in the name of Owner or otherwise, to such
tenant or tenants, for such term or terms ending before, on
or after the Expiration Date, at such rental or rentals and
upon such other conditions, which may include concessions
and free rent periods, as Owner, in its sole discretion, may
determine. Owner shall have no obligation to relet the
Demised Premises or any part thereof and shall in no event
be liable for refusal or failure to relet the Demised
Premises or any part thereof, or, in the event of any such
reletting, for refusal or failure to collect any rent due
upon any such reletting, and no such refusal or failure
shall operate to relieve Tenant of any liability under this
Lease or otherwise to affect any such liability; Owner, at
Owner's option, may make such repairs replacements,
alterations, additions, improvements, decorations and other
physical changes in and to the Demised Premises as Owner, in
its sole discretion, considers advisable or necessary in
connection with any such reletting or proposed reletting,
without relieving Tenant of any liability under this Lease
or otherwise affecting any such liability.
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Section 17.02. Tenant hereby waives the service of any
notice of intention to re-enter or to institute legal
proceedings to that end which may otherwise be required to
be given under any present or future law. Tenant, on its own
behalf and on behalf of all persons claiming through or
under Tenant, including all creditors, does further hereby
waive any and all rights which Tenant and all such persons
might otherwise have under any present or future law to
redeem the Demised Premises, or to re-enter or repossess the
Demised Premises, or to restore the operation of this Lease,
after (i) Tenant shall have been dispossessed by a judgment
or by warrant of any court or judge, or (ii) any re-entry by
Owners or (iii) any expiration or termination of this Lease
and the Demised Term, whether such dispossess, re-entry,
expiration or termination shall be by operation of law or
pursuant to the provisions of this Lease. The words
"re-enter", "re-entry" and "re-entered" as used in this
Lease shall not be deemed to be restricted to their
technical legal meanings. In the event of a breach or
threatened breach by Tenant, or any persons claiming through
or under Tenant, of any term, covenant or condition of this
Lease on Tenant's part to be observed or performed, Owner
shall have the right to enjoin such breach and the right to
invoke any other remedy allowed by law or in equity as if re
entry, summary proceedings and other special remedies were
not provided in this Lease for such breach. The right to
invoice the remedies hereinbefore set forth is cumulative
and shall not preclude Owner from invoking any other remedy
allowed by law or in equity.
ARTICLE 18
DAMAGE
Section 18.01. If this Lease and the Demised Term shall
expire and come to an end as provided in Article 16, or by
or under any summary proceeding or any other action or
proceeding, or if Owner shall re-enter the Demised Premises
as provided in Article 17, or by or under any summary
proceeding or any other action or proceeding, then, in any
of said events:
(a) Tenant shall pay to Owner all Fixed Rent,
additional rent and other changes payable under this Lease
by Tenant to Owner to the date upon which this Lease and the
Demised Term shall have expired and come to an end or to the
date of reentry upon the Demised Premises by Owner, as the
case may be; and
(b) Tenant shall also be liable for and shall pay to
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Owner, as damages, any deficiency (referred to as
"Deficiency") between the Fixed Rent reserved in this Lease
for the period which otherwise would have constituted the
unexpired portion of the Demised Term and the net amount, if
any, of rents collected under any reletting effected
pursuant to the provisions of Section 17.01 for any part of
such period (first deducting from the rents collected under
any such reletting all of Owner's expenses in connection
with the termination of this Lease or Owner's reentry upon
the Demised Premises and with such reletting including, but
not limited to, all repossession costs, brokerage
commissions, legal expenses, attorney's fees, alteration
costs and other expenses of preparing the Demised Premises
for such reletting). Any such Deficiency shall be paid in
monthly installments by Tenant on the days specified in this
Lease for payment of installments of Fixed Rent, Owner shall
be entitled to recover from Tenant each monthly Deficiency
as the same shall arise, and no suit to collect the amount
of the Deficiency for any month shall prejudice Owner's
right to collect the Deficiency for any subsequent month by
a similar proceeding Solely for the purposes of this
subsection (b), the term "Fixed Rent" shall mean the Fixed
Rent in effect immediately prior to the date upon which this
Lease and the Demised Term shall have expired and come to an
end, or the date of re-entry upon the Demised Premises by
Owner, as the case may be, adjusted, from time to time, to
reflect any increases which would have been payable pursuant
to any of the provisions of this Lease including, but not
limited to, the provisions of Article 23 of this Lease if
the term hereof had not been terminated; and
(c) At any time after the Demised Term shall have
expired and come to an end or Owner shall have re-entered
upon the Demised Premises, as the case may be, whether or
not Owner shall have collected any monthly Deficiencies as
aforesaid, Owner shall be entitled to recover from Tenant,
and Tenant shall pay to Owner, on demand, as and for
liquidated and agreed final damages, a sum equal to the
amount by which the Fixed Rent reserved in this Lease for
the period which otherwise would have constituted the
unexpired portion of the Demised Term exceeds the then fair
and reasonable rental value of the Demised Premises for the
same period, both discounted to present worth at the rate of
eight (8%) per cent per annum. If, before presentation of
proof of such liquidated damages to any court, commission or
tribunal, the Demised Premises, or any part thereof, shall
have been relet by Owner for the period which otherwise
would have constituted the unexpired portion of the Demised
Term, or any part thereof, the amount of rent reserved upon
such reletting shall be deemed, prima facie, to be the fair
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and reasonable rental value for the part or the whole of the
Demised Premises so relet during the term of the reletting.
Solely for the purposes of this subsection (c), the term
"Fixed Rent" shall mean the Fixed Rent in effect immediately
prior to the date upon which this Lease and the Demised Term
shall have expired and come to an end, or the date of
re-entry upon the Demised Premises by Owner, as the case may
be, adjusted to reflect any increases pursuant to the
provisions of Article 23 for the Escalation Year and Tax
Escalation Year immediately preceding such event.
Section 18.02. If the Demised Premises, or any part thereof,
shall be relet together with other space in the Building,
the rents collected or reserved under any such reletting and
the expenses of any such reletting shall be equitably
apportioned for the purposes of this Article 18. Tenant
shall in no event be entitled to any rents collected or
payable under any reletting, whether or not such rents shall
exceed the Fixed Rent reserved in this Lease. Nothing
contained in Articles 16, 17 or this Article shall be deemed
to limit or preclude the recovery by Owner from Tenant of
the maximum amount allowed to be obtained as damages by any
statute or rule of law, or of any sums or damages to which
Owner may be entitled in addition to the damages set forth
in Section 18 01.
ARTICLE 19
FEES AND EXPENSES; INDEMNITY
Section 19.01. If Tenant shall default in the observance or
performance of any term, covenant or condition of this Lease
on Tenant's part to be observed or performed, Owner, at any
time thereafter and without notice in cases of emergency and
after the expiration of applicable grace periods in all
other cases, may remedy such default for Tenant's account
and at Tenant's expense, without thereby waiving any other
rights or remedies of Owner with respect to such default.
Section 19.02. Tenant agrees to indemnify and save Owner and
Owner's agents harmless of and from all loss, cost,
liability, damage and expense including, but not limited to,
reasonable counsel fees, penalties and fines incurred in
connection with or arising from (i) any default by Tenant in
the observance or performance of any of the terms, covenants
or conditions of this Lease on Tenant's part to be observed
or performed, or (ii) the breach or failure of any
representation or warranty made by Tenant in this Lease, or
(iii) the use or occupancy or manner of use or occupancy of
the Demised Premises by Tenant or any person claiming
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through or under Tenant, or (iv) any acts, omissions or
negligence of Tenant or any such person, or the contraction,
agents, servants, employees, visitors or licensees of Tenant
or any such person, in or about the Demised Premises or the
Building either prior to, during, or after the expiration
of, the Demised Term, including, but not limited to, any
acts, omissions or negligence in the making or performing of
any Alterations. Tenant further agrees to indemnify and save
harmless Owner, Owner's agents, and the lessor or lessors
under all ground or underlying leases, of and from all loss,
cost, liability, damage and expense, including, but not
limited to, knowable counsel fees, incurred in connection
with or arising from any claims by any persons by reason of
injury to persons or damage to property occasioned by any
use, occupancy, act, omission or negligence referred to in
the preceding sentence. If any action or proceeding shall be
brought against Owner or Owner's agents, or the lessor or
lessors under any ground or underlying lease, based upon any
such claim and if Tenant, upon notice from Owner, shall
cause such action or proceeding to be defended at Tenant's
expense by counsel acting for Tenant's insurance carriers in
connection with such defense or by other counsel reasonably
satisfactory to Owner, without any disclaimer of liability
by Tenant or such insurance carriers in connection with such
claim, Tenant shall not be required to indemnify Owner,
Owner's agents, or any such lessor for counsel fees in
connection with such action or proceeding. Tenant shall
maintain comprehensive public liability and water legal
liability insurance against any claims by reason of personal
injury, death and property damage occurring in or about the
Demised Premises covering, without limitation, the operation
of any private air conditioning equipment and any private
elevators, escalators or conveyors in or serving the Demised
Premises or any part thereof, whether installed by Owner,
Tenant or others, and shall furnish to Owner duplicate
original policies or certificates of such insurance at least
ten (10) days prior to the Commencement Date and at least
ten (10) days prior to the expiration of the term of any
such policy previously furnished by Tenant, in which
policies Owner, its agents and any lessor under any ground
or underlying lease shall be named as additional insured,
which policies shall be issued by companies, and shall be in
form and amounts reasonably satisfactory to Owner.
Section 19.03. Tenant shall pay to Owner, within five (5)
days next following rendition by Owner to Tenant of bills or
statements therefor (i) sums equal to all reasonable
expenditures made and monetary obligations incurred by Owner
including, but not limited to, expenditures made and
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obligations incurred for reasonable counsel fees, in
connection with the remedying by Owner, for Tenant's account
pursuant to the provisions of Section 19.01, of any default
of Tenant, and (ii) sums equal to all losses, costs,
liabilities, damages and expenses referred to in Section
19.02, and (iii) sums equal to all/expenditures made and
monetary obligations incurred by Owner including, but not
limited to, expenditures made and obligations incurred for
reasonable counsel fees, in collecting or attempting to
collect the Fixed Rent, any additional rent or any other sum
of money accruing under this Lease or in enforcing or
attempting to enforce any rights of Owner under this Lease
or pursuant to law, whether by the institution and
prosecution of summary proceedings or otherwise provided,
however, Tenant shall not be required to reimburse Owner for
the counsel fees referred to in this subdivision (iii)
unless with respect to any such proceeding Owner shall
prevail therein; and (iv) all other sums of money (other
than Fixed Rent) accruing from Tenant to Owner under the
provisions of this Lease. Any sum of money (other than Fixed
Rent) accruing from Tenant to Owner pursuant to any
provision of this Lease including, but not limited to, the
provisions of Schedule A, whether prior to or after the
Commencement Date, may, at Owner's option, be deemed
additional rent, and Owner shall have the same remedies for
Tenant's failure to pay any item of additional rent when due
as for Tenant's failure to pay any installment of Fixed Rent
when due. Tenant's obligations under this Article shall
survive the expiration or sooner termination of the Demised
Term.
Section 19.04. If Tenant shall fail to make payment of any
installment of Fixed Rent, or any increase in the Fixed
Rent, or any additional rent within ten (10) days after the
date when such payment is due, Tenant shall pay to Owner, in
addition to such installment of Fixed Rent or such increase
in the Fixed Rent or such additional rent, as the case may
be, as a late charge and as additional rent, a sum equal to
three (3%) percent per annum above the then current prime
rate charged by Citibank (N.A.) or its successor of the
amount unpaid computed
from the date such payment was due to and including the date
of payment.
ARTICLE 20
ENTIRE AGREEMENT
Section 20.01. This Lease contains the entire agreement
between the parties and all prior negotiations and
agreements are merged in this Lease. Neither Owner nor
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Owner's agents have made any representations or warranties
with respect to the Demised Premises, the Building, the Real
Property or this Lease except as expressly set forth in this
Lease and no rights, easements or licenses are or shall be
acquired by Tenant by implication or otherwise unless
expressly set forth in this Lease. This Lease may not be
changed, modified or discharged, in whole or in part, orally
and no executory agreement shall be effective to change,
modify or discharge, in whole or in part, this Lease or any
obligations under this Lease, unless such agreement is set
forth in a written instrument executed by the party against
whom enforcement of the change, modification or discharge is
sought. All references in this Lease to the consent or
approval of Owner shall be teemed to mean the written
consent of Owner, or the written approval of Owner, as the
case may be, and no consent or approval of Owner shall be
effective for any purpose unless such consent or approval is
set forth in a written instrument executed by Owner.
ARTICLE 21
END OF TERM
Section 21.01. On the date upon which the Demised Term shall
expire and come to an end, whether pursuant to any of the
provisions of this Lease or by operation of law, and whether
on or prior to the Expiration Date, Tenant, at Tenant's sole
cost and expense, (i) shall quit and surrender the Demised
Premises to Owner, broom clean and in good order and
condition, ordinary wear excepted, and (ii) shall remove all
of Tenant's Personal Property and all other property and
effects of Tenant and all persons claiming through or under
Tenant from the Demised Premises and the Building, and (iii)
shall repair all damage to the Demised Premises occasioned
by such removal. Owner shall have the right to retain any
property and effects which shall remain in the Demised
Premises after the expiration or sooner termination of the
Demised Term, and any net proceeds from the sale thereof,
without waiving Owner's rights with respect to any default
by Tenant under the foregoing provisions of this Section.
Tenant expressly waives, for itself and for any person
claiming through or under Tenant, any rights which Tenant or
any such person may have under the provisions of Section
2201 of the New York Civil Practice Law and Rules and of any
successor law of like import then in force, in connection
with any holdover summary proceedings which Owner may
institute to enforce the foregoing provisions of this
Article. If said date upon which the Demised Term shall
expire and come to an end shall fall on a Sunday or holiday,
then Tenant's obligations under the first sentence of this
Section shall be performed on or prior to the Saturday or
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business day immediately preceding such Sunday or holiday.
Tenant's obligations under this Section shall survive the
expiration or sooner termination of the Demised Term.
ARTICLE 22
QUIET ENJOYMENT
Section 22.01. Owner covenants and agrees with Tenant that
upon Tenant paying the Fixed Rent and additional rent
reserved in this Lease and observing and performing all of
the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the Demised Premises during the
Demised Term, subject, however, to the terms, covenants and
conditions of this Lease including but not limited to, the
provisions of Section 37.01, and subject to the ground and
underlying leases and the mortgages referred to in Section
47.01.
ARTICLE 23
TAX AND OPERATING PAYMENTS
Section 23.01. In the determination of any increase in the
fixed Rent under the provisions of this Article, Owner and
Tenant agree as follows:
A. The term "Tax Escalation Year" shall mean each
fiscal year commencing July 1st and ending on the following
June 30th which shall include any part of the Demised Term.
B. The term "Escalation Year" shall mean each calendar
year which shall include any part of the Demised Term.
C. The term "Taxes" Shall be deemed to include all real
estate taxes and assessments, special or otherwise, upon or
with respect to the Real Property imposed by the City or
County of New York or any other taxing authority. if, due to
any change in the method of taxation, any franchise, income,
profit, sales, rental, use and occupancy or other tax than
be substituted for or leaned against Owner or any owner or
lessee of the Building or the Real Property, in lieu of any
real estate taxes or assessments upon or with respect to the
Real Property, such tax shall be included in the term
"Taxes" for the purposes of this Article.
D. Owner has applied for a certificate of eligibility
from the Department of Finance of the City of New York
determining that Owner is eligible to apply for a deferral
of tax payments for the Real Property pursuant to the
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provisions of Chapter 56-A of the Administrative Code of the
City of New York and the emulations promulgated pursuant to
such Chapter. Any such tax deferral for the Real Property
is referred to as "Tax Deferral" of such Tax Deferral is
referred to as the "Tax Deferral Period". Owner agrees that
Tenant shall not be required to (a) pay Taxes or charges
which become due because of the willful neglect or fraud by
Owner in connection with the program under which Owner shall
receive the Tax Deferral or (b) otherwise relieve or
indemnify Owner from any personal liability arising under
Section 1319 of the Administrative Code of the City of New
York, except where imposition of such Taxes, changes or
liability is occasioned by actions of Tenant in violation of
this Lease. Tenant agrees to report to Owner, as often as is
necessary under such regulations, the number of workers
engaged in employment in the Demised Premises the nature of
each worker's employment and the residency of each worker
and to provide access to the Demised Premises by employees
and agents of the Department of Finance of the City of New
York at all reasonable times at the request of Owner. Tenant
represents to the Owner that, within the seven (7) years
immediately preceding the date of this Lease, Tenant has not
been adjudged by a court of competent jurisdiction to have
been guilty of (x) an act, with respect to a building, which
is made a crime under the provisions of Article 150 of the
Penal Law of the State of New York or any similar law of
another state, or (y) any act made a crime or violation by
the provisions of Section 235 of the Real Property Law of
the State of New York, nor is any charge for a violation of
such laws presently pending against Tenant. Tenant further
agrees to cooperate with Owner in compliance with such
Chapter and regulations to aid Owner in obtaining and
maintaining the Tax Deferral. Tenant shall not be required
to pay any fees or charges or incur any expense or
Obligation other than for providing reasonably required
information in connection with Tenant's cooperation referred
to in the foregoing sentence.
E. The term "Tenant's Proportionate Share" shall mean
three and 15/100 (3.15%) percent.
F. The term "Owner's Tax Statement" shall mean a
statement containing a computation of any increase in the
Fixed Rent pursuant to the provisions of Section 23.02.
G. The term "Owner's Operating Expense Statement" shall
mean a statement containing a computation of any increase in
the Fixed Rent pursuant to the provisions of Section 23.04.
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H. The term "Operating Expenses" shall mean the
aggregate cost and expense actually incurred and paid Owner
in the operation, maintenance, management and security of
the Real Property and any plazas, sidewalks and curbs
adjacent thereto including, without limitation, the cost and
expense of the following salaries, wages, medical, surgical
and general welfare and other so-called "fringe" benefits
(including group insurance and retirement benefits) for
employees (including, but not limited to, employees who
provide twenty-four (24) hour serviced seven (7) days per
weeks throughout the year) of Owner or any contractor of
Owner engaged in the cleaning, operation, maintenance or
management of the Real Property or engaged for security
purposes and/or for receiving or transmitting deliveries to
and from the Building, and payroll taxes and workmen's
compensation insurance premiums relating thereto, gas, steam
(without giving effect to any repayment by the public
utility supplying such steam to Owner on account of a
prepayment made by Owner to such public utility for bringing
steam service to the Real Property), water, sewer rental,
electricity, utility taxes, rubbish removal, fire, casualty,
liability, rent and other insurance carried by Owner,
repairs, repainting, replacement, maintenance of grounds,
Building supplies, uniforms and cleaning thereof, snow
removal, window with independent contractors for any of the
forgoing (including, but not limited to, elevator, air
conditioning and fire alarm and communication equipment
maintenance), management fees (whether or not paid to any
person, firm or corporation having an interest in or under
common ownership with Owner or any of the persons, firms or
corporations comprising Owner, or to any firm or Corporation
in which any partner of Owner has an interest), legal fees
and disbursements and other expenses without limitation,
legal fees and expenses incurred in connection with any
application or proceeding brought for reduction of the
assessed valuation of the Real Property or any part thereof,
and legal fees for summary proceedings to dispossess
tenants, and the enforcement of leases, auditing fees, all
costs of compliance under the provisions of any
present or future ground or underlying leases of the Real
Property or any portion thereof other than the payment of
rental and impositions thereunder and increases in the basic
rent under such leases as a result of adjustments in such
basic rent and any cost or expense specifically excluded
from the definition of Operating Expenses as provided herein
and all other costs and expenses actually incurred and paid
in connection with the operation, maintenance, management
and security of the Real Property, and any plazas, sidewalls
and curbs adjacent thereto, but excluding, nevertheless, the
cost and expense of the following (i) leasing commissions;
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(ii) management fees in excess of generally prevailing rates
in the Borough of Manhattan for buildings of like class and
character in which the managing agent does not receive any
leasing commissions; (iii) executives' salaries above the
grade of building manager and superintendent; (iv) capital
improvements and replacements which under generally accepted
accounting principles and practice would be classified as
capital expenditures, except the cost and expense of any
improvement, alteration, replacement or installation made or
performed after completion of the construction of the
Building which is either (a) required by law or (b) results
in savings or reductions in Operating Expenses (such
improvements, alterations, replacements and installations
are referred to as "Included Improvements"); the cost and
expense of Included Improvements shall be included in
Operating expenses for any Escalation Year to the extent of
(x) the annual amortization or depreciation of the cost and
expense to Owner of such Included Improvements, as amortized
on a straight line basis over ten (l0) years, made during
any such Escalation Year plus (y) an annual charge for
interest upon the unamortized or undepreciated portions of
such cost and expense at the average prime rate during the
Escalation Year in question; provided, however, with respect
to the Included Improvements under subdivision (b) above,
the amount of such Included Improvements included in
Operating Expenses for any such Escalation Year, plus such
charge for interest for such Year allocable to such Included
Improvement, shall not exceed the amount of such savings or
reductions in Operating Expenses for such Escalation Year
unless such savings or reductions in Operating Expenses for
prior Escalation Years exceeded, in the aggregate, the
amounts paid by Tenant to Owner with respect to such
Included Improvements pursuant to said subsection (b) for
such prior Escalation Years (any such excess is referred to
as a 'Shortfall") in which event the amount of such Included
Improvements included in Operating Expenses for such
Escalation Year shall not exceed the total of the amount of
such savings or reductions in Operating Expenses for such
Escalation Year plus such Shortfall. any other item which
under generally accepted accounting principles and practice
would not be regarded as an operating, maintenance or
management expense; (vi) any item for which Owner is
compensated through proceeds of insurance/or Condemnation
award (vii) any specific compensation which is charged to
any tenant for services rendered to such tenant by Owner
above and beyond those services generally rendered by Owner
to tenants in the Building without specific compensation
therefore; (viii) ground rent and any rent, additional rent
or other charge under any ground lease, including, but not
limited to, the Ground and Development Rights Lease; (ix)
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debt service and other costs of financing or refinancing;
(x) legal fees and disbursements in connection with disputes
(including, without limitation, summary proceedings) with
tenants of the Building unless such disputes relate to
matters which affect Tenant s (or any other tenant s) use or
occupancy, or enjoyment of, the Building, the Demised
Premises or the space occupied by any such tenant and other
legal fees and disbursements unless they are incurred in
connection with the maintenance and security of the Real
Property in accordance with generally accepted accounting
principles (provided that in all events there shall always
be included in Operating Expenses legal fees and expenses
incurred in connection with any application or proceeding
brought for reduction of the assessed valuation of the Real
Property or any part thereof); (xi) advertising and
promotion expenses; (xii) all costs of constructing any
space in the Building for occupancy by a tenant or painting
or repainting such space; (xiii) Taxes; (xiv) the cost of
electric current or gas furnished to any tenanted space in
the Building; (xv) auditing fees, other than those incurred
in connection with the maintenance and operation of the
Building and the preparation of statements required pursuant
to this Lease and any other leases of space in the Building.
1. The term "Monthly Escalation Installment" shall mean
a sum equal to one-twelfth (1/12) of the increase in the
Fixed Rent payable pursuant to the provisions of subsection
23.04 A for the Escalation Year with respect to which Owner
has most recently rendered an Owner's Operating Expense
Statement, appropriately adjusted to reflect (i) in the
event such Escalation Year is a partial calendar year, the
increase in the Fixed Rent which would have been payable for
such Escalation Year if it had been a full calendar year,
and (ii) the amount by which current Operating Expenses as
reasonably estimated by Owner exceed Operating Expenses as
reflected in such Owner's Operating Expense Statement; and
(iii) any net credit balance to which Tenant may be entitled
pursuant to the provisions of subsection 23.05 C.
J. The term "Monthly Escalation Installment Notice"
shall mean a notice given by Owner to Tenant which sets
forth the current Monthly Escalation installment; such
Notice may be contained in a regular monthly rent bill, in
an Owner's Operating Expense Statement or otherwise, and may
be given from time to time, but not more than monthly, at
Owner's election.
Section 23.02. A. The Fixed Rent for each Tax Escalation
Year shall be increased by a sum equal to Tenant's
Proportionate Share of Taxes for such Tax Escalation Year.
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B. Unless the Commencement Date shall occur on a July
1st, any increase in the Fixed Rent pursuant to the
provisions of subsection A of this Section 23.02 for the Tax
Escalation Year in which the Commencement Date shall occur
shall be apportioned in that percentage which the number of
days in the period from the Commencement Date to June 30th
of such Tax Escalation Year, both inclusive, shall bear to
the total number of days in such Tax Escalation Year. Unless
the Demised Term shall expire on a June 30th, any income in
the Fixed Rent pursuant to the provisions of said subsection
A for the Tax Escalation Year in which the date of the
expiration of the Demised Term shall occur shall be
apportioned in that percentage which the number of days in
the period from July 1st of such Tax Escalation Year to such
date of expiration, both inclusive, shall bear to the total
number of days in such Tax Escalation Year.
Section 23.03. A. Owner shall render to Tenant, either in
accordance with the provisions of Article 27 or by personal
delivery at the Demised Premises, an Owners Tax Statement or
Statements with respect to each Tax Escalation Year, either
prior to or during such Tax Escalation Year./Owners failure
to render an Owners Tax Statement with respect to any Tax
Escalation Year shall not prejudice Owner's right to recover
any sums due to Owner hereunder with respect to such Tax
Escalation Year nor shall it deprive Tenant of any credit to
which it otherwise might be entitled to for any Tax
Escalation Year pursuant to the provisions of subsection C
of this Section 23.03. Tenant acknowledges that under
present law, Taxes are payable by Owner (i) with respect to
a fiscal year commencing July 1st and ending on the
following June 30th, and (ii) in two (2) installments, in
advance, the first of which is payable on July 1st, and the
second and final payment of which is payable on the
following January 1st. Within ten (10) days next following
rendition of the first Owner's Tax Statement which shows an
increase in the Fixed Rent for any Tax Escalation Year,
Tenant Shall pay to Owner one-half of the amount of the
increase shown upon such Owner's Tax Statement for such Tax
Escalation Year (including any apportionment pursuant to the
provisions of subsection B of Section 23.02); and,
subsequently, provided Owner shall have rendered to Tenant
an Owner's Tax Statement, Tenant shall pay to Owner not
later than thirty (30) days prior to the date on which the
installment of Taxes is required to be paid by Owner a sum
equal to one half (1/2) of Tenant's Proportionate Share of
Taxes payable with respect to such Tax Expiation Year as
shown on such Owner's Tax Statement, Tenant further
acknowledges that it is the purpose and intent of this
Section 23.03 to provide Owner with Tenant's Proportionate
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Share of the increases in the Fixed Rent pursuant to the
provisions of this subsection A thirty (30) days prior to
the time such instrument of Taxes is required to be paid by
Owner without penalty or interest. Accordingly, Tenant
agrees if the number of such installments and/or the date of
payment thereof and/or the fiscal year used for the purpose
of Taxes shall change then (a) at the time that any such
revised installment is payable by Owner, Tenant shall pay to
Owner the amount which shall provide Owner with Tenant's
Proportionate Share of the increase in the Fixed Rent
pursuant to the provisions of Section 23.02A applicable to
the revised installment of Taxes then required to be paid by
Owner. and (b) this Article shall be appropriately adjusted
to reflect such change and the time for payment to Owner of
Tenant's Proportionate Share of any increase in Taxes as
provided in this Article shall be appropriately revised so
that Owner shall always be provided with Tenant's
Proportionate Share of the increase in the Fixed Rent thirty
(30) days prior to the installment of Taxes required to be
paid by Owner. Notwithstanding the foregoing provisions of
this subsection A to the contrary, in the event the holder
of any mortgage affecting any ground or underlying lease,
including, but not limited to, the Ground and Development
Rights Lease, shall require Owner to make monthly deposits
on account of real estate taxes, then this Article shall be
appropriately adjusted to reflect the requirement that Owner
make monthly deposits on account of real estate taxes so
that Owner shall always be provided with one-twelfth
(1/12th) of Tenant's Proportionate Share of such increase in
the Fixed Rent with respect to any Tax Escalation Year
thirty (30) days prior to the payment by Owner of such
monthly deposits on account of real estate taxes.
B. Tenant acknowledges that its obligations under the
provisions of subsection 23.02.A. will be greater if Owner
fails to obtain a Tax Deferral and agrees that Owner shall
have no liability to Tenant nor shall Tenant be entitled to
any abatement or diminution of rent if Owner fails to obtain
a Tax Deferral. Tenant further acknowledges that its
obligations under the provisions of subsection 23.02.A.
shall increase during and at the expiration of the Tax
Deferral Period as the law and regulations pursuant to which
Owner may obtain a Tax Deferral provides for limited
deferrals of tax payments for the first (1st) seven tax
years following the issuance of a certificate of eligibility
(100% for the first three years, 80% for the fourth year,
60% for the fifth year, 40% for the sixth year and 20% for
the seventh year) and the payment by Owner of the total
amount of tax payments deferred commencing in the eleventh
tax year following the issuance of a certificate of
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eligibility, through and including the twentieth tax year
following such issuance, by adding an amount equal to 10%
percent of the total amount of tax payments deferred to the
amount of tax otherwise assessed and payable in each such
tax year.
C. If, as a result of any application or proceeding
brought by or on behalf of Owner for reduction of the
assessed valuation of the Real Property there shall be a
decrease in Taxes for any Tax Escalation Year with respect
to which Owner Shell have previously rendered an Owner's Tax
Statement. the next monthly instalment or installments of
Fixed Rent following such decrease shall include an
adjustment of the Fixed Rent for such Tax Escalation Year
reflecting a credit to Tenant equal to the amount by which
(i) the Fixed Rent actually paid by Tenant with respect to
such Tax Escalation Year (as increased pursuant to the
operation of the provisions of subsection A of Section
23.02), shall exceed (ii) the Fixed Rent payable with
respect to such Tax Escalation Year (as increased pursuant
to the operation of the provisions of subsection A of
Section 23.02) based upon such reduction of the assessed
valuation.
Section 23.04. A. The Fixed Rent for each Escalation Year
shall be increased by a sum equal to Tenant's Proportionate
Share of Operating Expenses for such Escalation Year.
B. Unless the Commencement Date shall occur on a
January 1st, any increase in the Fixed Rent pursuant to the
provisions of subsection A of this Section 23.04 for the
Escalation Year in which the Commencement Date shall occur
shall be apportioned in that percentage which the number of
days in the period from the Commencement Date to December
31st of such Escalation Year, both inclusive, shall bear to
the total number of days in such Escalation Year. Unless the
Demised Term shall expire on a December 31st, any increase
in the Fixed Rent pursuant to the provisions of subsection A
of this Section 23.04 for the Escalation Year in which the
date of the expiration of the Demised Term shall occur shall
be apportioned in that percentage which the number of days
in the period from January 1st of such Escalation Year to
such date of expiration, both inclusive, shall bear to the
total number of days in such Escalation Year.
C. In the determination of any income in the Fixed Rent
pursuant to the foregoing provisions of this Section 23.04,
if the Building shall not have been fully occupied during
any Escalation Year, Operating Expenses for such Escalation
Year shall be equitably adjusted (by including such
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additional expenses as Owner would have incurred) to the
extent, if any, required to reflect full occupancy.
Section 23.05. A. Owner shall render to Tenant, either in
accordance with the provisions of Article 27 or by personal
delivery at the Demised Premises, an Owner's Operating
Expense Statement with respect to each Escalation Year on or
before the next succeeding October 1st. Owner's failure to
render an Owner's Operating Expense Statement with respect
to any Formation Year shall not prejudice Owner's right to
recover any sums due to Owner hereunder with respect to such
Escalation Year.
B. Within thirty (30) days next following rendition of
the first Owner's Operating Expense Statement which shows an
increase in the Fixed Rent for any Escalation Year, Tenant
shall pay to Owner the entire amount of such increase. In
order to provide for current payments on account of future
increases in the Fixed Rent payable by Tenant pursuant to
the provisions of subsection 23.04 A, Tenant shall also pay
to Owner at such time, provided Owner has given to Tenant a
Monthly Escalation Installment Notice, a sum equal to the
product of (i) the Monthly Escalation lnstallment set forth
in such notice multiplied by (ii) the number of months or
partial months which shall have elapsed between January 1st
of the Escalation Year in which such payment is made and the
date of such payment less any amounts theretofore paid by
Tenant to Owner on account of increases in the Fixed Rent
for such Escalation Year pursuant to the provisions of the
penultimate sentence of this Section 23.05 B; thereafter
Tenant shall make payment of a Monthly Escalation
installment throughout each month of the Demised Term.
Monthly Formation installments shall be added to and payable
as part of each monthly installment of Fixed Rent.
Notwithstanding anything to the contrary contained in the
foregoing provisions of this Article, prior to the rendition
of the first Owner's Operating Expense Statement which shows
an increase in the fixed Rent for any Escalation Year, Owner
may render to Tenant a pro-forma Owner's Operating Expense
Statement containing a bona fide estimate of the increase in
the Fixed Rent for the Escalation Year in which the
Commencement Date shall occur. Following the rendition of
such pro-forma Owner's Operating Expense Statement, Tenant
shall pay to Owner a sum equal to one twelth (1/12) of the
estimated increase in the Fixed Rent shown thereon for such
Escalation Year multiplied by the number of months which may
have elapsed between the Commencement Date and the month in
which such payment is made and thereafter pay to Owner, on
the first day of each month of the Demised Term (until the
rendition by Owner of the first Owners Operating Expense
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Statement) a sum equal to one-twelth (1/12) of the increase
in the Fixed Rent shown on such pro-forma Owner's Operating
Expense Statement. Any sums paid pursuant to the provisions
of the immediately preceding sentence shall be credited
against the sums required to be paid by Tenant to Owner
pursuant to the Owner's Operating Expense Statement for the
first Escalation Year for which there is an increase in the
Fixed Rent pursuant to the provisions of subsection A.
C. Following rendition of the first Owner's Operating
Expense Statement and each subsequent Owner's Operating
Expense Statement a reconciliation shall be made as follows:
Tenant shall be debited with any increase in the Fixed Rent
shown on such Owner's Operating Expense Statement and
credited with the aggregate amount, if any, paid by Tenant
in accordance with the provisions of subsection B of this
Section on account of future increases in the Fixed Rent
pursuant to subsection 23.04.A. which has not previously
been credited against increases in the Fixed Rent shown on
Owner Operating Expense Statements. Tenant shall pay any net
debit balance to Owner within thirty (30) days next
following rendition by Owner, either in accordance with the
provisions of Article 27 or by personal delivery at the
Demised Premises of an invoice for such net debit balance;
any net credit balance shall be applied as an adjustment
against the next accruing Monthly Escalation Installment.
Section 24.02. No act or thing done by Owner or Owner's
agents during the Demised Term shall constitute a valid
acceptance of a surrender of the Demised Premises or any
remaining portion of the Demised Term except a written
instrument accepting such surrender, executed by Owner. No
employee of Owner or of Owner's agents shall have any
authority to accept the keys of the Demised Premises prior
to the termination of this Lease and the Demised Term, and
the delivery of such keys to any such employee shall not
operate as a termination of this Lease or a surrender of the
Demised Premises; however, if Tenant desires to have Owner
sublet the Demised Premises for Tenant's account, Owner or
Owner's agents are authorized to receive said keys for such
purposes without releasing Tenant from any of its
obligations under this Lease, and Tenant hereby relieves
Owner of any liability for loss of, or damage to, any of
Tenant's property or other effects in connection with such
subletting. The failure of Owner to seek redress for breach
or violation of, or to insist upon the strict performance
of, any term, covenant or condition of this Lease on
Tenant's part to be observed or performed, shall not prevent
a subsequent act or omission which would have originally
constituted a breach or violation of any such term, covenant
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or condition from having all the force and effect of an
original breach or violation. The receipt by Owner of rent
with knowledge of the breach or violation by Tenant of any
term, covenant or condition of this Lease on Tenant's part
to be observed or performed shall not be deemed a waiver of
such breach or violation. Owner's failure to enforce any
Building Rule against Tenant or against any other tenant or
occupant of the Building shall not be deemed a waiver of any
such Building Rule. No provision of this Lease shall be
deemed to have been waived by Owner unless such waiver shall
be set forth in a written instrument executed by Owner. No
payment by Tenant or receipt by Owner of a lesser amount
than the aggregate of all Fixed Rent and additional rent
then due under this Lease shall be deemed to be other than
on account of the first accruing of all such items of Fixed
Rent and additional rent then due, no endorsement or
statement on any check and no letter accompanying any check
or other rent payment in any such lesser amount and no
acceptance of any such check or other such payment by Owner
shall constitute an accord and satisfaction, and Owner may
accept any such check or payment without prejudice to
Owner's right to recover the balance of such rent or to
pursue any other legal remedy.
ARTICLE 25
MUTUAL WAIVER OF TRAIL BY JURY
Section 25.01. Owner and Tenant hereby waive trial by jury
in any action, proceeding or counterclaim brought by Owner
or Tenant against the other on any matter whatsoever arising
out of or in any way connected with this lease, the
relationship of landlord and tenant the use or occupancy of
the Demised Premises by Tenant or any person claiming
through or under Tenant, any claim of injury or damage, and
any emergency or other statutory remedy, however, the
foregoing waiver shall not apply to any action for personal
injury or property damage. The provisions of the foregoing
sentence shall survive the expiration or any sooner
termination of the Demised Term. If Owner commences any
summary proceeding for non-payment of rent. Tenant agrees
not to interpose any non-compulsory counterclaim of whatever
nature or description in any such proceeding.
ARTICLE 26
INABILITY TO PERFORM
Section 26.01. lf by reason of strikes or other labor
disputes, fire or other casualty (or reasonable delays in
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adjustment of insurance), accidents, orders or regulations
of any Federal, State, County or Municipal authority, or any
other cause beyond Owner's reasonable control, whether or
not such other cause shall be similar in nature to those
hereinbefore enumerated, Owner is unable to furnish or is
delayed in furnishing any utility or service required to be
furnished by Owner under the provisions of Article 29 or any
other Article of this Lease or any collateral instrument, or
is unable to perform or makes or is delayed in performing or
making any installations, decorations, repairs, alterations,
additions or improvements, whether or not required to be
performed or made under this Lease or under any collateral
instruments or is unable to fulfill or is delayed in
fulfilling any of Owner's other obligations under this Lease
or any collateral instruments no such inability or delay
shall constitute an actual or constructive eviction, in
whole or in part or entitle Tenant to any abatement or
diminution of rent, or relieve Tenant from any of its
obligations under this Lease. or impose any liability upon
Owner or its agents by reason of inconvenience or annoyance
to Tenant, or injury to or interrupts of Tenants's
businesses, or otherwise. (See Article 45).
ARTICLE 27
NOTICES
Section 27.01. Except as otherwise expressly provided in
this Lease, any bills, statements, notices, demands,
requests or other communications given or required to be
given under this Lease shall be effective only if rendered
or given in writing, sent by registered or certified mail
(return receipt requested optional), addressed (a) to Tenant
addressed to Charles Persing (i) at Tenant's address set
forth in this Lease if mailed prior to Tenant's taking
possession of the Demised Premises, or (ii) at the Building
if mailed subsequent to Tenant's taking possession of the
Demised Premises, or (iii) at any place where Tenant or any
agent or employee of Tenant may be found if mailed
subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Demised Premise (b) to Owner at Owner's
address set forth in this Lease, with a copy to Goldfarb &
Fleece, 345 Park Avenue, New York, New York 10154 or (c)
addressed to such other address as either Owner or Tenant
may designate as its new address for such purpose by notice
given to the other in accordance with the provisions of this
Section. Any such bill, statement, notice, demand, request
or other communication shall be deemed to have been rendered
or given on the date when it shall have been mailed as
provided in this Section.
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ARTICLE 28
PARTNERSHIP TENANT
Section 28.01 . If Tenant is a partnership (or is composed
of two (2) or more persons, individually and as co-partners
of a partnership) or if Tenant's interest in this Lease
shall be assigned to a partnership (or to two (2) or more
persons, individually and as co-partners of a partnership)
pursuant to Article II (any such partnership and such
persons are referred to in this Section as "Partnership
Tenant"), the following provisions of this Section shall
apply to such Partnership Tenant: (i) the liability of each
of the persons comprising Partnership Tenant shall be joint
and several, individually and as a partner, and (ii) each of
the persons comprising Partnership Tenant, whether or not
such person shall be one of the persons comprising Tenant at
the time in question, hereby consents in advance to, and
agrees to be bound by, any written instrument which may
hereafter be executed, changing, modifying or discharging
this Lease, in whole or in part, or surrendering all or any
part of the Demised Premises to Owner, and by any notices,
demands, requests or other communications which may
hereafter be given by Partnership Tenant or by any of the
persons comprising Partnership Tenant, and (iii) any bills,
statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to
any of the persons comprising Partnership Tenant shall be
deemed given or rendered to Partnership Tenant and to all
such persons and shall be binding upon Partnership Tenant
and all such persons, and (iv) if Partnership Tenant shall
admit new partners, all of such new Partners shall, by their
admission to Partnership Tenant, be deemed to have assumed
performance of all of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed,
and shall be liable for such performance, together with all
other parties jointly or severally, individually and as a
partner, and (v) Partnership Tenant shall give prompt notice
to Owner of the admission of any such new partners, and,
upon demand of Owner, shall cause each such new partner to
execute and deliver to Owner an agreements in form
satisfactory to Owner, wherein each such new partner shall
so assume performance of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and
performed (but neither Owner's failure to request any such
agreement nor the failure of any such new panther to execute
or deliver any such agreement to Owner shall vitiate the
provisions of subdivision (iv) of this Section).
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ARTICLE 29
UTILITIES AND SERVICES
Section 29.01. Owner, at Owner's expense, shall furnish
necessary elevator facilities on business days from 8:00 A
M. to 6:00 P.M. and shall have a passenger elevator subject
to call at all other times. At any time or times all or any
of the elevators in the Building may, at Owner's option, be
automatic elevators, and Owner shall not be required to
furnish any operator service for automatic elevators. If
Owner shall, at any time, elect to furnish operator service
for any automatic elevators, Owner shall have the right to
discontinue furnishing such service with the same effect as
if Owner had never elected to furnish such service. Tenant
acknowledges that Owner has designated one (1) of the
freight elevators for the exclusive use of another tenant of
the Building and Tenant shall have no right to use such
elevator without Owner's consent. Tenant shall not be
Charged any fee for the use of the freight elevators in
connection with Tenant's move into the Demised Premises.
Section 29.02. Owner, at Owner's expense (subject to the
provisions of this Section and Section 29.04), shall furnish
and distribute to the Demised Premises through the Building
heating, ventilating and air conditioning (referred to as
"HVAC") systems, when required for the comfortable occupancy
of the Demised Premises, heated, cooled ant outside air, at
reasonable temperatures, pressures and degrees of humidity
and in reasonable volumes and velocities, on a year round
basis, from 8.00 a m. to 6.00 p.m. on business days. Tenant
understands, however, that the equipment which will be
employed in distributing air will be connected to Tenant's
electric meter and Tenant shall be appropriate for payment
of all electricity consumed by such equipment
Notwithstanding the foregoing provisions of this Section,
Owner Shall not be responsible if the normal operation of
the HVAC systems shall fail to provide conditioned air at
reasonable temperatures pressures or degrees of humidity or
in reasonable volumes or velocities in ny portions of the
Demised Premises (a) which shall have an electric load in
excess of three and one-half (1/2) watts per square foot of
usable area for all purposes (including lighting and power),
or which shall have a human occupancy factor in excess of
one person per 100 square feet of usable area (the average
electrical load and human occupancy factors for which the
HVAC systems have been designed) or (b) because of any
rearrangement of partitioning or other Alterations made or
performed by or on behalf of Tenant or any person claiming
through or under Tenant Notwithstanding such design of the
HVAC systems, Tenant acknowledges that Owner's Initial
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Construction shall provide for an electrical load in the
Demised Premises which than conform to the New York State
Energy Conservation Construction Code, and which accordingly
may be less than three and one-half (3 1/2) watts per square
foot of usable area for all purposes (including lighting and
power.) Whenever said HVAC systems are in operation, Tenant
agrees to cause all the windows in the Demised Premises to
be kept closed and to cause the venetian blinds in the
Demised Premises to be kept closed if necessary because of
the position of the sun. Tenant agrees to cause all the
windows in the Demised Premises to be closed whenever the
Demised Premises are not occupied. Tenant shall cooperate
fully with Owner at all times and abide by all regulations
and requirements which Owner may reasonably prescribe for
the proper functioning and protection of the Building HVAC
systems.
Section 29. 03. A. Provided Tenant shall keep the Demised
Premises in order, Owner, at Owner's expense, shall cause
the of office areas of the Demised Premises to be cleaned
substantially in accordance with the standards set forth in
Schedule C, all of the terms, covenants and conditions of
which are incorporated in this Lease by reference and shall
be deemed a part of this Lease, as though fully set forth in
the body of this Lease and shall cause Tenant's ordinary
office waste paper refuse to be removed, provided that Owner
shall not be required to empty garbage cans having a
capacity in excess of nine (9) gallons. Tenant acknowledges
that Owner's obligation to cause the office areas of the
Demised Premises to be cleaned excludes any portions of the
Demised Premises not used as office areas (e.g, storage,
mail and computer areas, private lavatories in
contradistinction to core toilets used for the storage,
preparation, service or consumption of food or beverages and
the broadcasting areas of the Demised Premises). Tenant
shall pay Owner at Building standard rates or, if there are
no such rates, at reasonable rates, for the removal of any
of Tenant's refuge or rubbish other than ordinary office
waste paper refuse, from the Building, and Tenant, at
Tenant's expense, shall cause all portions of the Demised
Promises not used as office areas to be cleaned daily in a
manner/satisfactory to Owner. Tenant also shall cause all
portions of the Demised Premises used for the storage
preparation, service or consumption of food or beverages to
be exterminated against infestation by vermin, roaches or
rodents regularly and, in addition, whenever there shall be
evidence of any infestation. Tenant shall contract
independently with Owner or its cleaning services contractor
for the removal of such other refuse and rubbish and for
cleaning services in addition to those furnished by Owner
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and for the purpose of providing extermination services
required to be performed by Tenant.
B. Tenant acknowledges and is aware that the cleaning
services required to be furnished by Owner pursuant to this
Section may be furnished by a contractor or contractors
employed by Owner and agrees that Owner shall not be deemed
in default of any of its obligations under this Section
29.03 unless such default shall continue for an unreasonable
period of time after notice from Tenant to Owner setting
forth the specific nature of such default.
Section 29.04. A. Tenant shall make arrangements to supply
all electricity in the Demised Premises, including, but not
limited to, electricity to serve the Air conditioning and
ventilating equipment and hot water heater to be installed
by Owner as part of Owner's Initial Construction, by
contracting directly with the public utility corporation
furnishing electricity to the Building and shall pay said
utility corporation for all current consumed in or about the
Demised Premises. In connection with the purchase of
electric energy by Tenant, Owner shall install on each floor
comprising the Demised Premises a meter pan for one meter
which measures both demand and consumption. Tenant shall
arrange with such public utility corporation for the
installation, at Tenant's sole cost and expense, of such
meter.
B. If either the quantity or character of electrical
service is changed by the public utility corporation
supplying electrical service to the Building or is no longer
available or suitable for Tenants requirements, no such
change, unavailability or unsuitability shall constitute an
actual or constructive eviction, in whole or in part or
entitle Tenant to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under this lease,
or impose any liability upon Owner, or its agents, by reason
of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business or otherwise.
C. Owner represents that the electrical feeder or riser
capacity serving the Demised Premises on the Commencement
Date shall be adequate to serve the lighting fixtures and
electrical receptacles installed in the Demised Premises
initially by Owner pursuant, to the provisions of Paragraph
II of Schedule A and HVAC equipment required to be installed
in the Demised Premises initially by Owner pursuant to the
provisions of Paragraph I of Schedule A. Any additional
feeders or risers to supply Tenant's additional electrical
requirements, and all other equipment proper and necessary
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in connection with such feeders or risers, shall be
installed by Owner upon Tenant's request, at the sole cost
and expense of Tenant, provided that, in Owner' reasonable
judgement, such additional feeders or risers are necessary
and are permissible under applicable laws and insurance
regulations and the installation of such feeders or risers
will not cause permanent damage or injury to the Building or
the Demised Premises or cause or create a dangerous or
hazardous condition or entail excessive or unreasonable
alterations or repairs to, interfere with, or disturb, other
tenants or occupants of the Building. Tenant covenants that
at no time shall the use of electrical energy in the Demised
Premises exceed the capacity of the existing feeders or
wiring installations then serving the Demised Premises.
Tenant shall not make or perform or permit the making or
performance of, any Alterations to wiring installations or
other electrical facilities in or serving the Demised
premises without the prior consent of Owner in each
instance.
Section 29.05. If Tenant requires, uses or consumes water
for any purpose in addition to ordinary lavatory and
drinking purposes, Owner may install a hot water meter and a
cold water meter and thereby measure Tenant's consumption of
water for all purposes. Tenant shall pay to Owner the cost
of any such meters and their installation, and Tenant shall
keep any such meters and any such installation equipment in
good working order and repair, at Tenant's cost and expense.
Tenant agrees to pay for water consumed as shown on said
meters and sewer charges, taxes and any other governmental
charges thereon, as and when bills are rendered. Tenant
understands that the hot water heater will be connected to
Tenant's electric meter and that Tenant shall be responsible
for payment of all electricity consumed by such equipment
For the purposes of determining the amount of any sums
required to be paid by Tenant under this Section, all hot
and cold water consumed during any period when such meters
are not in good working order shall be deemed to have been
consumed at the rate of consumption of such water during the
most comparable period when such meters were in good working
order.
Section 29.06. The Fixed Rent does not reflect or include
any charge to Tenant for the furnishing or distributing of
any freight elevator or HVAC services to the Demised
Premises during periods (referred to as "Overtime Periods")
other than the hours and days set forth above in this
Article for the furnishing and distributing of such
services. Accordingly, if Owner Shall furnish any such
freight elevator or HVAC services to the Demised Premises at
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the request of Tenant during Overtime Periods, Tenant shall
pay Owner for such services at the standard rates then fixed
by Owner for the Building or, if no such rates are then
fixed, at reasonable rates. Owner shall not be required to
furnish any such services during Overtime Periods, unless
Owner has received reasonable advance notice from Tenant
requesting such services. If Tenant fails to give Owner
reasonable advance notice requesting such services during
any Overtime Periods, then, whether or not the Demised
Premises are habitable during such Periods, failure by Owner
to furnish or distribute any such services during such
Periods shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any
of its obligations under this Lease, or impose any liability
upon Owner or its agents by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of
Tenant's business or otherwise.
Section 29.07. Owner reserves the right to stop the service
of the HVAC, elevator, plumbing, electrical or other
mechanical systems or facilities in the Building when
necessary by reason of accident or emergency, or for repairs
alterations, replacements or improvements, which, in the
judgment of Owner are desirable or necessary, until said
repairs, alterations, replacements or improvements shall
have been completed. The exercise of such right by Owner
shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any abatement or
diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon
Owner or its agents by reason of inconvenience or annoyance
to Tenant, or injury to or interruption of Tenant's
business, or otherwise.
ARTICLE 30
CAPTIONS
Section 30.01. The captions preceding the Articles of this
Lease have been inserted solely as a matter of convenience
and such captions in no way define or limit the scope or
intent of any provision of this Lease.
ARTICLE 31
MISCELLANEOUS DEFINITIONS AND SEVERABILITY PROVISIONS
Section 31.01. The term "business days" as used in this
Lease shall exclude Saturdays, Sundays and holidays, the
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term "Saturdays" as used in this Lease shall exclude
holidays and the term "holidays" as used in this Lease shall
mean all days observed as legal holidays by either the New
YorK State Government or the Federal Government.
Section 31.02. The terms "person" and "persons" as used in
this Lease shall be deemed to include natural persons,
firms, corporations, associations and any other private or
public amenities, whether any of the foregoing are acting on
their own behalf or in a representative capacity.
Section 31.03. The term "prime rate" shall mean the rate of
interest announced publicly by Citibank, N.A., or its
successor, from time to time, as Citibank, N.A.'s or such
successor's base rate, or if there is no such base rate,
then the rate of interest charged by Citibank, N.A. or its
successor to its most creditworthy customers on commercial
loans having a ninety (90) day duration.
Section 31.04. If any term, covenant or condition of this
Lease or any application thereof shall be invalid or
unenforceable, the remainder of this Lease and any other
application of such term, covenant or condition shall not be
affected thereby.
ARTICLE 32
ADJACENT EXCAVATION
Section 32.01. If an excavation shall be made upon land
adjacent to the Real Property, or shall be authorized to be
made, Tenant shall afford to the person causing or
authorized to cause such excavation license to enter upon
the Demised Premises for the purpose of doing such work as
said person shall deem necessary to preserve the walls and
other portions of the Building from injury or damage and to
support the same by proper foundations and no such entry
shall constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any abatement or
diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon
Owner or said person.
ARTICLE 33
BUILDING RULES
Section 33.01. Tenant shall observe faithfully, and comply
strictly with, and shall not permit the violation of, the
Building Rules set forth in Schedule B annexed to and made a
part of this Lease and such additional reasonable Building
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Rules as Owner may, from time to time, adopt all of the
terms, covenants and conditions of Schedule B are
incorporated in this lease by reference and shall be deemed
part of this lease as though fully set forth in the body of
this Lease The term "Building Rules" as used in this Lease
shall include those set forth in Schedule B and those
hereafter made or adopted as provided in this Section in
case Tenant disputes the reasonableness of any additional
Building Rule hereafter adopted by Owner, the parties hereto
agree to submit the question of the reasonableness of such
Building Rule for decision to the Chairman of the Board of
Director of the Management Division of the Real Estate Board
of New York, Inc., or its successor, or so such impartial
person or persons as he may designate, whose determination
shall be final and conclusive upon Owner and Tenant.
Tenants right to dispute the reasonableness of any
additional Building Rule shall be deemed waived unless
asserted by service of a notice upon Owner within thirty
(30) days after the date upon which Owner shall give notice
to Tenant of the adoption of any such additional Building
Rule. Owner shall have no duty or obligation to enforce any
Building Rule, or any term, covenant or condition of any
other lease, against any other tenant or occupant of the
Building, and Owner's failure or refusal to enforce any
Building Rule or any term, covenant or condition of any
other lease against any other tenant or occupant of the
Building shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any
of its obligations under this Lease, or impose any liability
upon Owner or its agents by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of
Tenant's business, or otherwise. Any Building Rule not
enforced generally against other tenants of the Building
shall not be enforced against tenant.
ARTICLE 34
BROKER
Section 34.01. Tenant represents and warrants to Owner that
Cushman & Wakefield, Inc. is the sole broker with whom
Tenant has negotiated or otherwise dealt with in connection
with the Demised Premises or in bringing about this Lease.
Owner represents and warrants to Tenant that Cushman &
Wakefield, Inc. is the sole broker with whom Owner has
negotiated or otherwise dealt with in connection with the
Demised Premises or in bringing about this Lease. Each
party shall indemnify the other from all loss, cost,
liability, damage and expense, including, but not limited
to, reasonable counsel fees and disbursements, arising from
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any breach of the foregoing representation and warranty.
Owner agrees to pay a brokerage commission to Cushman &
Wakefield, Inc. in accordance with the provisions of a
separate agreement between Owner and Cushman & Wakefield,
Inc.
ARTICLE 35
SECURITY
Section 35.01. The sum of FOUR HUNDRED THOUSAND
($400,000.00) Dollars representing security (referred to as
"Security") for the faithful performance and observance by
Tenant of the terms, covenants and conditions of this Lease
on Tenant's part to be observed and performed is due and
payable at the time of the execution and delivery of this
Lease in the event of any default by Tenant in the
observance or performance of any of the terms, covenants or
conditions of this lease on the part of Tenant to be
observed or performed including, but not limited to, ny
default in the payment when due of any monthly installment
of the Fixed Rent or of any additional rent, Owner may use
or apply all or any part of the Security for the payment to
Owner for Tenant's account of any sum or amount due under
this Lease, without thereby waiving any other rights or
remedies of Owner with respect to such default Tenant agrees
to replenish all or any part of the Security so used or
applied during the Demised Term. After (i) the Expiration
Date or any other date upon which the Demised Term shall
expire and come to an end, and (ii) the full observance and
performance by Tenant of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and
performed, including, but not limited to, the provisions of
Article 21, Owner shall return to Tenant the balance of the
Security then held or retained by Owner. Owner agrees that,
unless prohibited by law or by the general policies of
lending institutions in New York City, Owner shall deposit
the Security in a money market account selected by Owner
with Chase Manhattan Bank N.A. in New York City in which
event all interest accruing therein shall be remitted to
Tenant annually provided Tenant is not then in default in
the observance or performance of any of terms, covenants or
conditions of this Lease on Tenant's part to be observed or
performed beyond the applicable grace period provided in
this Lease for the curing of such default.
Tenant agrees that Tenant shall not assign or encumber
any part of the Security, and no assignment or encumbrance
by Tenant of all or any part of the Security shall be
binding upon Owner, whether made prior to, during, or after
the Demised Term. Owner shall not be required to exhaust
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its remedies against Tenant or against the Security before
having recourse to any other form of security held by Owner
and recourse by Owner to any form of security shall not
affect any remedies of Owner which are provided in this
Lease or which are available to Owner in law or equity. In
the event of any sale, assignment or transfer by Owner named
herein (or by any subsequent Owner) of its interest in the
Building as owner or lessee, Owner (or such subsequent
owner) shall have the right to assign or transfer the
Security to its grantee, assignee or transferee and, in the
event of such assignment or transfer, Owner named herein,
(or such subsequent Owner) Shall have no liability to Tenant
for the return of the Security and Tenant shall look solely
to the grantee, assignee or transferee for such return. A
lease of the entire Building shall be deemed a transfer
within the meaning of the forming sentence.
Section 35.02. Provided Tenant is not then in default in the
observance or performance of any of the terms, covenants or
conditions of this Lease on Tenant's part to be observed or
performed beyond the applicable grace periods provided for
the curing of such default, then Owner shall return to
Tenant the sum of ONE HUNDRED THIRTY THREE THOUSAND THREE
HUNDRED THIRTY THREE ($133,333.00) DOLLARS of such Security
on the second (2nd) anniversary of the Commencement Date.
Section 35.03. Provided Tenant is not then in default in the
observance or performance of any of the terms, covenants or
conditions of this Lease on Tenant's part to be observed or
performed beyond the applicable grace periods provided for
the curing of such default then Owner shall return to Tenant
the sum of ONE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED
THIRTY THREE ($133,333.00) DOLLARS of such Security on the
fourth (4th) anniversary of the Commencement Date.
ARTICLE 36
ARBITRATION, ETC.
Section 36.01. Any dispute (i) with respect to the
reasonability of any failure or refusal of Owner to grant
its consent or approval to any request for such consent or
approval pursuant to the provisions of Sections 3.01 or
11.03 with respect to which request Owner has agreed, in
such Sections, not unreasonably to withhold such consent or
approval, or (ii) arising out of the application of the
Operating Expenses provisions of Article 23, which is
submitted to arbitration shall be finally determined by
arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American
Arbitration Association or its successor. Any such
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determination shall be final and binding upon the parties,
whether or not a judgment shall be entered in any court. In
making their determination, the arbitrators shall not
subtract from, add to, or otherwise modify any of the
provisions of this Lease. Owner and Tenant may, at their own
expense, be represented by counsel and employ expert
witnesses in any such arbitration. Any dispute with respect
to the reasonability of any failure or refusal of Owner to
grant its consent or approval to any request for such
consent or approval pursuant to any of the provisions of
this Lease (other than Sections 3.01 and 11.03) with respect
to which Owner has covenanted not unreasonably to withhold
such consent or approval, and any dispute arising with
respect to the application of the tax payment provisions of
Article 23 shall be determined by applicable legal
proceedings. If the determination of any such legal
proceedings, or of any arbitration held pursuant to the
provisions of this Section with respect to disputes arising
under Sections 3.01 and 11.03, shall be adverse to Owner,
Owner shall be deemed to have granted the requested consent
or approval, or be bound by any determination as to Taxes
and the increases in Fixed Rent relating thereto, but that
shall be Tenant's sole remedy in such event and Owner shall
not be liable to Tenant for a breach of Owner's covenant not
unreasonably to withhold such consent or approval, or
otherwise. Each party shall pay its own counsel and expert
witness fees and expense, if any, in connection with any
arbitration held pursuant to the provisions of this Section
and the parties will share all other expenses and fees of
any such arbitration.
ARTICLE 37
PARTIES BOUND
Section 37.01. The terms, covenants and conditions contained
in this Lease shall bind and inure to the benefit of Owner
and Tenant and, except as otherwise provided in this Lease,
their respective heirs, distributees, executors,
administrators, successors and assigns. However, the
obligations of Owner under this Lease shall no longer be
binding upon Owner named herein after the sale, assignment
or transfer by Owner named herein (or upon any subsequent
Owner after the sale, assignment or transfer by such
subsequent Owner) of its interest in the Building as owner
or lessee, and in the event of any such sale, assignment or
transfer, such obligations shall thereafter be binding upon
the grantee, assignee or other transferee of such interests
and any such grantees, assignee or transferee, by accepting
such interest, shall be deemed to have assumed such
obligations. A Lease of the entire Building shall be deemed
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a transfer within the meaning of the foregoing sentence.
Tenant shall look solely to the estate and interest of
Owner, its successors and assigns, in the Real Property and
Building for the collection or satisfaction of any judgment
recovered against Owner based upon the breach by Owner of
any of the terms, conditions or covenants of this Lease on
the part of Owner to be performed, and no other property or
assets of Owner shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to either this Lease, the
relationship of landlord and tenant hereunder, or Tenant's
use and occupancy of the Demised Premises. Schedule D,
entitled "Addendum to Lease" is annexed hereto and all of
the terms, covenants and conditions of Schedule D are
incorporated in this Lease by reference and shall be deemed
a part of this Lease as though fully set forth in the body
of this Lease.
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In witness whereof, Owner and Tenant have respectively
signed and sealed this Lease as of the day and year first
above written.
BROADWAY 52ND ASSOCIATES
By /s/ Lewis Rudin
_____________________
Witness: Lewis Rudin a partner
/s/ Philip A. Glantz
___________________
Philip A. Glantz
UNISTAR COMMUNICATIONS GROUP, INC.
By /s/ N. J. Verbitsky
______________________
N.J. Verbitsky Tenant
Attest:
/s/ Charles N. Pershing
_____________________
Charles N. Persing (Corporate Seal)
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SCHEDULE D
ADDENDUM TO LEASE
Article 38
RENT HOLIDAY
Section 38.01. Provided this Lease is not terminated by
reason of a default by Tenant in the observance and
performance of any of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed,
Tenant shall be entitled to a conditional rent holiday and
shall not be required to pay any portion of the Fixed Rent
with respect to the period from the day next following the
end of the Initial Rent Period to and including the date
which is two hundred seventy (270) days next following the
end of the Initial Rent Period but during such period of two
hundred seventy (270) days Tenant shall otherwise be
required to comply with all of the other terms, covenants
and conditions of this Lease on Tenant's part to be observed
and performed, including, but not limited to, the provisions
of Article 23. If at any time during the Demised Term
Tenant shall be in default in the observance and performance
of any of the terms, covenants and conditions of this Lease
on Tenant s part to be observed and performed and this Lease
is terminated by reason thereof, then the total sum of the
Fixed Rent so conditionally excused by operation of the
foregoing provisions of this Section shall become
immediately due and payable by Tenant to Owner. If, as of
the Expiration Date, Tenant shall not then be in default in
the observance and performance of any of the terms,
covenants and conditions of this Lease on Tenant's part to
be observed and performed beyond the applicable grace
periods provided in this Lease for the curing of any such
default, Owner shall waive payment of all such Fixed Rent so
conditionally excused.
ARTICLE 39
SATELLITE RECEIVING DISH
Section 39.01. Tenant shall have the right to install,
maintain, operate, repair and replace the equipment listed
on Schedule E to this Lease on the roof and roof penthouse
of the Building, the exact location and size of which shall
be reasonably designated by Owner, and cables connecting
such equipment to equipment in the Demised Premises running
through conduits, pipes or shafts in the Building, the exact
location of which shall be reasonably designated by Owner
provided that such equipment shall be designed, and at all
times during the Demised Term be operated, in accordance
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with FCC requirements and in such a manner that it will not
physically (i) interfere in any way with the rights of any
existing tenant in the Building either to (a) maintain and
use any satellite or telecommunications transmitting and/or
receiving antenna or dish or similar equipment or (b) use
any portions of the roof granted to it whether or not such
rights have been exercised by any existing tenant at the
time that Tenant installs such equipment in accordance with
the provisions of this Section and (ii) unreasonably
interfere with any reasonable rights of any future tenant in
the Building either to (x) maintain and use any satellite or
telecommunications transmitting and/or receiving antenna or
dish or similar equipment or (y) use any reasonable portions
of the roof reasonably granted to it whether or not such
rights have been exercised by any future tenant at the time
that Tenant installs such equipment in accordance with the
provisions of this Section. The foregoing installations
shall be made at Tenant's sole cost and expense and in
accordance with all the provisions of this Lease, including,
but not limited to, the provisions of Article 3 and Article
6. Owner shall have no responsibility for the maintenance
and repair of any such installations and Tenant, at Tenant's
sole cost and expense, shall keep all said installations in
good condition and make all necessary repairs and
replacements thereto and to the Building occasioned thereby.
Upon the Expiration Date or sooner termination of the
Demised Term, or if required by any applicable governmental
authorities, or if any rights of any existing tenant are so
physically interfered with by Tenant or if any reasonable
rights of any future tenant are so physically interfered
with by Tenant, (and Tenant does not cease such physical
interference within ten (10) days following Owner notice
thereof) Tenant, at Tenant's sole cost and expense, shall,
upon request of Owner, remove such installations or relocate
such installations to another portion of the roof where
designated by Owner, at Owner's election, and make all
repairs to the Building occasioned by such removal or
relocation, as the case may be. The foregoing installations
shall be subject to such conditions with respect to such
installations and the maintenance thereof as may reasonably
be imposed by Owner. Tenant shall not be charged for such
use of the roof, penthouse or any Building cables or similar
equipment and shall be entitled to have twenty four (24,
hour unrestricted access thereto, subject to the provisions
of Articles 13 and 26 of this Lease.
Section 39.02. Owner agrees that Owner shall not grant any
rights to install any satellite or telecommunications
transmitting or receiving antenna or dish or similar
equipment on the roof of the Building to any tenants in the
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Building which will physically interfere in any way with the
rights granted to Tenant in this Article.
ARTICLE 40
ADDENDUM TO ARTICLE 4
Section 40.01. Notwithstanding anything contained in
Article 4 to the contrary, any fixtures, improvements,
additions and other property installed at the sole expense
of Tenant with respect to which Tenant shall not have been
granted any credit or allowance by Owner may be removed by
Tenant at or prior to the expiration of the Demised Term
provided Tenant is not in default hereunder beyond the
applicable grace periods for the curing of such defaults and
further provided that Tenant, at Tenant's sole cost and
expense, shall repair any damage caused by such removal and,
in those instances where Tenant may have replaced fixtures
or installations installed at the sole cost and expense of
Owner or at the joint cost and expense of Owner and Tenant
with other fixtures and installations which Tenant elects to
remove, Tenant shall restore the fixtures and installations
so replaced. All fixtures and installations not so removed
shall become the property of Owner at the expiration of the
Demised Term.
Section 40.02. Nothing contained in the provisions of this
Lease shall prevent Tenant from removing from the Demised
Premises at any time during the Demised Term Tenant s
furniture, trade fixtures and business equipment, including,
but not limited to, Tenant s broadcasting equipment provided
that Tenant, at Tenant s sole cost and expense, shall repair
any damage to the Demised Premises and the Building caused
by such removal.
ARTICLE 41
ADDENDUM TO ARTICLE 9
Section 41.01. Notwithstanding the provisions of subdivision
(i) of Section 9.01, if prior to or during the Demised Term
the Demised Premises, in contradistinction to the Building,
shall be totally destroyed or rendered wholly untenantable
and there shall be less than two (2) years of the Demised
Term remaining at that time, then if Owner does not exercise
its right to terminate this Lease in accordance with the
provisions of subdivision (i) of said Section 9.01, then
Tenant shall have the right to terminate this Lease as of
the date of such fire or casualty by notice to Owner within
thirty (30) days of the date of such fire or casualty and in
the event Tenant shall timely give such notice of
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termination, this Lease and the Demised Term shall come to
an end and expire on such date with the same effect as if
such date were the Expiration Date and the Fixed Rent shall
be apportioned as of such date, and any prepaid portion of
Fixed Rent for any period after such date shall be refunded
by Owner to Tenant.
Section 41.02. Notwithstanding the provisions of subdivision
(i) of subsection A of this Section 9.01, if during the
Demised Term the Demised Premises, in contradistinction to
the Building, shall be totally damaged or rendered wholly
untenantable by fire or other casualty, and there shall be
at least two (2) years of the Demised Term remaining at the
time, Owner hereby waives the right to terminate this Lease
in accordance with the provisions of subdivision (i) of said
Subsection A. The provisions of the foregoing sentence
shall be deemed to relate solely to the operation of the
provisions of subdivision (i) of said Subsection A and shall
not in any way be deemed to relate to the provision of
subdivision (ii) of said Subsection A.
ARTICLE 42
ADDENDUM TO ARTICLE 11
Section 42.01. A. Supplementing the provisions of Article
11, as long as Tenant is not in default under any of the
terms, covenants or conditions of this Lease on Tenant's
part to be observed and performed beyond the applicable
grace periods provided in this Lease for the curing of such
default, Unistar Communications Group Inc., Tenant named
herein, shall have the right, without the prior consent of
Owner, to assign its interest in this Lease, for the use
permitted in this Lease, to any subsidiary or affiliate of
Tenant named herein, which is in the same general line of
business as Tenant named herein and only for such period as
it shall remain such subsidiary or affiliate. For the
purposes of this Article: (a) a "subsidiary" of Tenant named
herein shall mean any corporation not less than fifty-one
(51% percent of whose outstanding voting stock at the time
shall be owned by Tenant named herein, and (b) an
"affiliate" of Tenant named herein shall mean any
corporation, partnership or other business entity which
controls or is controlled by, or is under common control
with Tenant. For the purpose of the definition of
"affiliate the word "control" (including, "controlled by"
and "under common control with") as used with respect to any
corporation, partnership or other business entity, shall
mean the possession of the power to direct or cause the
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direction of the management and policies of such
corporation, partnership or other business entity, whether
through the ownership of voting securities or contract. No
such assignment shall be valid or effective unless, within
ten (10) days after the execution thereof, Tenant shall
deliver to Owner: (I) a duplicate original instrument of
assignment, in form and substance reasonably satisfactory to
Owner, duly executed by Tenant, in which Tenant shall (a)
waive all notices of default given to the assignee, and all
other notices of every kind or description now or hereafter
provided in this Lease, by statute or rule of law, and (b)
acknowledge that Tenant's obligations with respect to this
Lease shall not be discharged, released or impaired by (i)
such assignment, (ii) any amendment or modification of this
Lease, whether or not the obligations of Tenant are
increased thereby, (iii) any further assignment or transfer
of Tenant's interest in this Lease, (iv) any exercise,
non-exercise or waiver by Owner of any right, remedy, power
or privilege under or with respect to this Lease, (v) any
waiver, consent, extension, indulgence or other act or
omission with respect to any other obligations of Tenant
under this Lease, (vi) any act or thing which, but for the
provisions of such assignment, might be deemed a legal or
equitable discharge of a surety or assignor, to all of which
Tenant shall consent in advance, it being the purpose and
intent of Owner and Tenant that the obligations of Tenant
hereunder as assignor shall be absolute and unconditional
under any and all circumstances, and (II) an instrument, in
form and substance satisfactory to Owner, duly executed by
the assignee, in which such assignee shall assume the
observance and performance of, and agree to be personally
bound by, all of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed.
B. Further supplementing the provisions of Article 11,
as long as Tenant
is not in default under any of the terms, covenants or
conditions of this Lease on Tenant's part to be observed and
performed beyond the applicable grace periods provided in
this Lease for the curing of such default, Unistar
Communications Group,Inc., Tenant named herein, shall have
the right without the prior consent of Owner, to sublet to,
or permit the use or occupancy of, all or any part of the
Demised Premises by any subsidiary or affiliate (as said
terms are defined in Section 42.01.A.) of Tenant named
herein for the use permitted in this Lease provided that
such subsidiary or affiliate is in the same general line of
business as the Tenant named herein and only for such period
as it shall remain such subsidiary or affiliate and in the
same general line of business as the Tenant named herein.
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However, no such subletting shall be valid unless, prior to
the execution thereof, Tenant shall give notice to Owner of
the proposed subletting, and within ten (10) days after the
execution thereof, Tenant shall deliver to Owner an
agreement, in form and substance satisfactory to Owner, duly
executed by Tenant and said subtenant, in which said
subtenant shall assume performance of and agree to be
personally bound by, all of the terms, covenants and
conditions of this Lease which are applicable to said
subtenant and such subletting. Tenant shall give prompt
notice to Owner of any such use or occupancy, and such use
or occupancy shall be subject and subordinate to all of the
terms, covenants and conditions of this Lease. No such use
or occupancy shall operate to vest in the user or occupant
any right or interest in this Lease or the Demised Premises.
For the purposes of determining the number of subtenants or
occupants in the Demised Premises, the occupancy of any such
permitted subsidiary or affiliate of Tenant shall be deemed
the occupancy of Tenant and such subsidiary or affiliate
shall not be counted as a subtenant or occupant for the
purposes of Section 11.03, and the provisions of Section
11.03 relating to Owner's options to terminate this Lease or
recapture the Demised Premises, as the case may be, and
Subletting Profit shall not be applicable to any proposed
subletting to any such subsidiary or affiliate of Tenant
pursuant to the provisions of this Section.
Section 42.02. Supplementing the provisions of Article 11,
as long as Tenant is not then in default under any of the
terms, covenants or conditions of this Lease on Tenant's
part to be observed or performed beyond the applicable grace
periods provided in this Lease for the curing of such
default, Tenant shall have the privilege, without the
consent of Owner, to assign its interest in this Lease for
the use permitted in this Lease to any entity which is a
successor to Tenant either by merger, consolidation,
purchase of all or substantially all of its stock, purchase
of all or substantially all of its assets, business and
goodwill or like transaction, provided that such successor
shall continue to operate in the Demised Premises the
business conducted by Tenant in the Demised Premises on or
about the Commencement Date and the interest of Tenant in
this Lease is not the sole or principal asset of Tenant and
such assignment is made for a good business purpose.
However, no such assignment shall be valid unless, within
ten (10) days after the execution thereof, Tenant shall
deliver to Owner (i) a duplicate original instrument of
assignment in form and substance reasonably satisfactory to
Owner, duly executed by Tenant, and (ii) an instrument in
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form and substance reasonably satisfactory to Owner, duly
executed by the assignee, in which such assignee shall
assume observance and performance of, and agree to be
personally bound by, all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and
performed.
Section 42.03. Supplementing the provisions of Section
11.02, so long as Owner shall maintain a directory in the
lobby of the Building, Owner shall make available to Tenant
space for the listing of Tenant's name and the names of any
of the officers or employees of Tenant and any permitted
occupants of the Demised Premises provided that the names so
listed shall not require more than Tenant's Proportionate
Share of the space of such directory, provided further,
however that Tenant shall be provided with at least ten (10)
spaces on such directory.
ARTICLE 43
ADDENDUM TO ARTICLE 13
Section 43.01. Supplementing the provisions of Sections
13.01 and 13.02, Owner agrees that except in cases of
emergency, any entry upon the Demised Premises pursuant to
the provisions of said Sections shall be made at reasonable
times, and only after reasonable advance notice (which may
be mailed, delivered or left at the Demised Premises,
notwithstanding any contrary provisions of Article 27), and
any work performed or installations made pursuant to said
Section shall be made with reasonable diligence and any such
entry, work or installations shall be made in a manner
designed to minimize interference with Tenant s normal
business operations (however, nothing contained in this
Section shall be deemed to impose upon Owner any obligation
to employ contractors or labor at overtime or other premium
pay rates).
Section 43.02. Further supplementing the provisions of
Section 13.01, Owner's right to exhibit the Demised Premises
to others shall be limited to insurance carriers and
representatives, prospective purchasers of the Real Property
or the Building, holders or prospective holders of any
mortgage affecting the Real Property or the Building or any
ground or underlying lease, and other legitimate business
visitors, and, during the last year of the Demised Term, any
prospective tenants of the Demised Premises.
Section 43.03. Further supplementing the provisions of
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Section 13.01, Owner agrees that any pipes, ducts or
conduits installed in or through the Demised Premises during
the Demised Term pursuant to the provisions of Section
13.01, shall either be concealed behind, beneath or within
partitioning, columns, ceilings or floors, or completely
furred at points immediately adjacent to partitioning,
columns or ceilings, and that when the installation of such
pipes, ducts or conduits shall be completed, such pipes,
ducts or conduits shall not reduce the usable area of the
Demised Premises by more than a de minimis amount.
Section 43.04. Further supplementing the provisions of
Section 13.02, Owner shall not restrict the reasonable
decoration of Tenant's entry doors on the seventeenth (17th)
floor.
ARTICLE 44
ADDENDUM TO ARTICLE 23
Section 44.01. Tenant shall have the right to examine those
portions of Owner's records which pertain to Operating
Expenses and which are required to verify the accuracy of
the amounts shown on any Owner's Operating Expense
Statement, provided Tenant shall notify Owner of its desire
to so examine such records within sixty (60) days next
following the rendition of such Owner's Operating Expense
Statement. If Tenant shall fail to (a) notify Owner of its
desire to so examine such records within said sixty (60) day
period next following the rendition of such Owner's
Statement or (b) so examine such records within ninety (90)
days next following rendition of such Owner's Operating
Expense Statement then the increase in the Fixed Rent as
shown on such Owner's Operating Expense Statement shall be
final and binding upon Tenant. Any such examination shall
be conducted at the office of Owner's accountants during the
normal office hours of such accountants and Tenant shall
reimburse Owner's accountants for their reasonable out of
pocket expenses in connection with such examination by
Tenant.
ARTICLE 45
ADDENDUM TO ARTICLE 26
Section 45.01. Supplementing the provisions of Section
26.01, Owner agrees to use reasonable diligence to attempt
to eliminate the cause of any inability or delay, referred
to in said Section 26.01, on the part of Owner to fulfill
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its obligations under this Lease. (However, nothing
contained in this Section shall be deemed to impose upon
Owner any obligation to employ labor at so-called "overtime"
or other premium pay rates).
ARTICLE 46
TENANT'S ACCESS
Section 46.01. Owner agrees that Tenant shall be entitled
to access to the Demised Premises twenty four (24) hours per
day, seven (7) days per week, subject to the provisions of
this Lease.
ARTICLE 47
SUBORDINATION, ATTORNMENT, ETC.
Section 47.01. This Lease and all rights of Tenant under
this Lease are, and shall remain unconditionally subject and
subordinate in all respects to the presently existing
mortgages affecting the indenture of lease dated as of March
13, 1985 between The Shubert Organization, Inc., as
Landlord. and Owner, as tenant (referred to as the "Ground
and Development Rights Lease") and to all advances made or
hereafter to be made under said mortgages, and to all
renewals, modifications, replacements and extensions of and
substitutions for, such mortgages, as well as to any
consolidations or correlations of such mortgages with other
mortgages. Owner agrees to obtain and deliver to Tenant not
later than one hundred eighty (180) days after the date of
this Lease, an agreement substantially to the effect that in
the event of any foreclosure of said mortgages such holder
or holders of said mortgages will not make Tenant a party
defendant to such foreclosure nor disturb its possession
under this Lease so long as there shall be no default by
Tenant under this lease beyond the applicable grace periods
provided for the curing of such default (any such agreement,
or any agreement of similar import, is referred to in this
Lease as a "Non-Disturbance Agreement"). If Owner shall fail
to make timely delivery to Tenant of such Non-Disturbance
Agreement, Tenant, as Tenant's sole remedy for such failure,
shall have the right, exercisable within one-hundred ninety
(190) days after the date of this Lease, to cancel and
terminate this Lease by notice given to Owner. Upon the
giving of such notice of cancellation and termination, this
Lease shall terminate and come to an end and neither party
shall have any further rights or liabilities under this
lease. It is agreed that time is of the essence with respect
to any such notice of cancellation and termination, that
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Tenant shall not have the right to give any such notice
after the one-hundred ninety ( 190) day period hereinabove
referred to, and that any such notice given after the
expiration of such period shall have no force or effect.
Section 47.02. This Lease and all rights of Tenant under
this Lease shall be and remain, unconditionally subject and
subordinate in all respects to all other mortgages which
may, from time to time, affect the Ground and Development
Rights Lease, any future ground or underlying lease referred
to in Section 47.04 or the Real Property and to all advances
to be made under such mortgages, and to all renewals
modifications, consolidations, correlations, replacements
and extensions of and substitutions for, any such mortgage
or mortgages, provided that (i) the holder of any such
mortgage shall execute and deliver a Non-Disturbance
Agreement to Tenant, or (ii) any such mortgage shall contain
provisions substantially to the same effect as thou
contained in a Non-Disturbance Agreement (any such
provisions are referred to in this Lease as "Non-Disturbance
Provisions").
Section 47.03. This Lease and all rights of Tenant under
this Lease are, and shall remain, unconditionally subject
and subordinate in all respects to the Ground and
Development Rights Lease and to all renewals, modifications,
replacements and extensions of, and substitutions for, such
lease. Owner agrees that until such time as Owner has
delivered to Tenant a Tenant Recognition Agreement (as
hereinafter defined). Owner will not enter into any
agreement to modify the provisions of Section 14.04 of the
Ground and Development Rights Lease. An agreement from the
lessor under the Ground and Development Rights Lease
substantially to the effect that, in the event of the
termination of the Ground and Development Rights Lease for
any reason other than a termination by operation of the
provisions of Articles 8 (entitled "Damage to or Destruction
of the Building") and 9 (entitled "Condemnation") of such
Lease such lessor will permit Tenant to attorn to such
lessor and will not disturb its possession under this Lease,
so long as there shall be no default by Tenant under this
Lease, beyond the applicable grace period provided in this
Lease for the cunng of such default, or any agreement of
similar import is referred to in this Lease as a "Tenant
Recognition Agreement". Owner agrees, within thirty (30)
days next following the date of this Lease, to request from
the lessor under the Ground and Development Rights Lease a
tenant Recognition Agreement in favor of Tenant with respect
to this Lease and to take all reasonable steps to obtain the
same.
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Section 47.04. This lease and all rights of Tenant under
this Lease shall be and remain, unconditionally subject and
subordinate in all respects to all future ground or
underlying leases affecting the Real Property or any portion
thereof or the Building and to all renewals, modifications,
replacements and extensions of, and substitutions for, such
ground or underlying leases, provided that (i) any such
ground or underlying lease shall contain provisions
substantially to the same effect as those contained in a
Tenant Recognition Agreement. (and such provisions are
referred to in this lease as "Tenant Recognition
Provisions"), or (ii) the lessor under any such ground or
underlying lease shall execute and deliver to Tenant a
Tenant Recognition Agreement.
Section 47.05.A. At Owner's request, Tenant shall execute
and deliver promptly any certificate or other instrument
which Owner may request, subordinating this Lease and all
rights of Tenant under this Lease to any mortgages which may
now or hereafter affect the Real Property and/or the real
property from which the development rights demised in the
Ground and Development Rights Lease accrue and/or any ground
or underlying lease affecting such real property, and to all
advances made or hereafter to be made under such mortgages
and to all renewals, modifications. consolidations,
correlations, replacements and extensions of, and
substitutions for, any such mortgage or mortgages, provided
that (i) the holder of any such mortgage shall execute and
deliver a Non-Disturbance Agreement to Tenant. or (ii) any
such mortgage shall contain Non-Disturbance Provisions in
the event Tenant shall fail to execute or deliver any such
certificate or other instrument which may be requested
pursuant to the foregoing provisions of this subsection
within a reasonable time after Owner's request therefor,
Tenant hereby irrevocably constitutes and appoints Owner as
Tenant's agent and attorney-in-fact to execute any such
certificate or other instrument for or on behalf of Tenant.
B. The subordination provisions of this Article (with
the exception of the provisions of subsection A of this
Section 47.05) shall be self-operative and no further
instrument of subordination shall be required. In
confirmation of such subordination, Tenant shall execute and
deliver promptly any certificate or other instrument which
Owner, or any lessor under any ground or underlying lease or
any holder of any such mortgage may reasonably request, and
if Tenant shall fail to execute and deliver any such
certificate or other instrument within a reasonable time
after Owner's request therefor, Tenant hereby irrevocably
constitutes and appoints Owner and all such lessors and
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holders, acting jointly or severally, as Tenant's agent and
attorney-in-fact to execute any such certificate or other
instrument for or on behalf of Tenant. If, in connection
with obtaining financing with respect to the Building, the
Real Property, the real property from which the development
rights demised in the Ground and Development Rights Lease
accrue or the interest of the lessee under any ground or
underlying lease, any recognized lending institution shall
request reasonable modifications of this Lease as a
condition of such financing. Tenant covenants not
unreasonably to withhold or delay its agreement to such
modifications, provided that such modifications do not
increase the obligations, or materially and adversely affect
the rights, of Tenant, under this Lease. No act or failure
to act on the pan of Owner which would entitle Tenant under
the terms of this Lease, or by law, to be relieved of
Tenant's obligations hereunder or to terminate this Lease
shall result in a release or termination of such obligations
or a termination of this Lease unless (i) Tenant shall have
first given written notice of Owner's act or failure to act
to the holder or holders of any mortgage of whom Tenant has
been given written notice specifying the act or failure to
act on the pan of Owner which could or would give basis to
Tenant's rights, and (ii) the holder or holders of such
mortgages, after receipt of such notice, have failed or
refused to correct or cure the condition complained of
within a reasonable time thereafter, but nothing contained
in this sentence shall be deemed to impose any obligation on
any such holder to correct or cure any such condition.
"Reasonable time" as used above means and includes a
reasonable time to obtain possession of the Building if any
such holder elects to do so and a reasonable time to correct
or cure the condition if such condition is determined to
exist.
Section 47.06. If, at any time prior to the expiration of
the Demised Term, any ground or underlying lease under which
Owner then shall be the lessee shall terminate or be
terminated for any reason, Tenant agrees at the election and
upon request of any owner of the Real Property, or of the
holder of any mortgage in possession of the Real Property or
the Building, or of any lessee under any other ground or
underlying lease covering premises which include the Demised
Premised to attorn, from time to time, to any such owner,
holder, or Lessee, upon the then executory terms and
conditions of this Lease, for the remainder of the term
originally demised in this Lease, provided that such owner,
holder or lessee, as the case may be, shall then be entitled
to possession of the Demised Premises The provisions of this
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Section shall ensure to the benefit of any such owner,
holder, or lessee, shall apply notwithstanding that. as a
matter of law, this Lease may terminate upon the termination
of any such ground or underlying lease, shall be
self-operative upon any such request, and no further
instrument shall be required to give effect to said
provisions. Tenant, however, upon request of any such owner,
holder, or lessee, agrees to execute, from time to time,
instruments in confirmation of the foregoing provisions of
this Section, satisfactory to any such owner, holder, or
lessee, acknowledging such attornment and setting forth the
terms and conditions of its tenancy. Nothing contained in
this Section shall be construed to impair any right
otherwise exercisable by any such owner, holder, or Lessee.
Notwithstanding anything to the contrary set forth in this
Article no such owner, holder or lessee shall be bound by
(i) any payment of any installment of Fixed Rent or
increases therein or any additional rent which may have been
made more than thirty (30) days before the due date of such
installment, or (ii) any amendment or modification to this
Lease which is made without its consent if required.
Section 47.07. Nothing contained in this Article or in any
Non-Disturbance Provision, Non-Disturbance Agreement, Tenant
Recognition Provision or Tenant Recognition Agreement shall,
however, affect the prior rights of the holder of any
existing or future mortgage or of the lessor under any
ground or underlying lease with respect to the proceeds of
any award in condemnation or of any fire insurance policies
affecting the Building, or impose upon any such holder or
lessor any liability (i) for the erection or completion of
the Building. or (ii) in the event of damage or destruction
to the Building or the Demised Premises, for any repairs,
replacements, rebuilding or restoration except as can
reasonably be accomplished from the net proceeds of
insurance actually received by, or made available to, such
holder or lessor, or (iii) for any default by Owner under
this Lease occurring prior to any date upon which such
holder or lessor shall become Tenant's landlord, or (iv) for
any credits, offsets or claims against the rent under this
Lease as the result of any acts of Owner committed prior to
such date, and any such Provision or Agreement may so state.
Any such Provision or Agreement may also be conditioned upon
the existence of any one or more of the following
circumstances at the time of the commencement of any
foreclosure of any such mortgage or at the time of the
termination of any such ground or underlying lease as the
case may be:
A. The Demised Term shall have commenced or Tenant
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shall have taken possession of the Demised Premises;
B. Tenant shall not be in default in the observance or
performance of any of the covenants of this Lease on the
part of Tenant to be observed or performed beyond the
applicable grace period provided in this Lease for the
curing of such default;
C. Tenant shall not have paid rent in advance beyond
the rent period next following the current rent period, and
there shall be no offsets then accrued against future rent
chargeable against the holder of any such mortgage after
foreclosure or against the lessor under such ground or
underlying lease after termination, as the case may be.
D. Any circumstance substantially similar to B or C; or
E. Tenant shall have furnished to the then holder of
any such mortgage or the then lessor under any such ground
or underlying lease, as the case may be, a statement, in
writing, as to the status of this Lease with respect to the
above circumstances A, B and C or any circumstance
substantially similar to B or C, within ten (10) days after
such holder or lessor shall have made written demand for
such statement by registered or certified mail addressed to
Tenant.
Section 47.08. A. At the request of Owner, Tenant shall
promptly execute and deliver any instrument or Instruments
requested by Owner for the benefit of the holder of any
mortgage to which this Lease shall then be subordinate as
hereinabove provided, or for the benefit of the lessor under
any ground or underlying lease to which this Lease shall
then be subordinate as hereinabove provided, in which Tenant
shall covenant and agree with such holder or lessor that (a)
Tenant will not enter into any agreement to cancel or modify
this Lease without the written approval of such holder or
lessor, and (b) Tenant will not take any action or institute
any proceeding against Owner to cancel or modify this Lease
without giving to such holder or lessor at least thirty (30)
days' prior written notice of such action or proceedings
except that the provisions of any such instrument shall not
apply to any modifications of this Lease contemplated in any
of the provisions of this Lease, or to any right or option
to cancel or modify this Lease expressly reserved or granted
to Tenant pursuant to any of the provisions of this Lease.
B. If required by the holder of any mortgage or by the
lessor under any ground or underlying lease, Tenant shall
promptly join in any Non-Disturbance Agreement or Tenant
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Recognition Agreement to indicate its concurrence with the
provisions thereof provided such agreement shall
substantially comply with the provisions of this Article.
Section 47.09 A. From time to time, within ten (10) days
next following Owner's request, Tenant shall deliver to
Owner a written statement executed and acknowledged by
Tenant, in form reasonably satisfactory to Owner, (i)
stating that this Lease is then in full force and effect and
has not been modified (or if modified, setting forth the
specific nature of all modifications), and (ii) setting
forth the date to which the Fixed Rent has been paid, and
(iii) stating whether or not, to the best knowledge of
Tenant, Owner is in default under this Lease, and, if Owner
is in default setting, forth the specific nature of all such
defaults and (iv) stating that Tenant has accepted and
occupied the Demised Premise and all improvements required
to be made by Owner pursuant to the provisions of this
Lease, have been made, if such be the case. Tenant
acknowledges that any statement delivered pursuant to this
subsection may be relied upon by any purchaser or owner of
the Building, or the Real Property or any part thereof, or
Owner's interest in the Building or the Real Property or any
ground or underlying lease, or by any mortgagee, or by any
assignee of any mortgagee, or by any lessee under any ground
or underlying lease.
B. From time to time, within 1 (1) day next following
Tenant's request, Owner shall deliver to Tenant a written
statement executed by Owner, in form reasonably satisfactory
to Tenant and prepared at Tenant's expense (i) stating that
this Lease is in full force and effect and has not been
modified (and if modified, that this Lease is then in full
force and effect as so modified and the specific nature of
all modifications), and (ii) setting from the date to which
the Fixed Rent has been paid, and (iii) stating whether or
not, to the best knowledge of Owner, Tenant is in default
under this Lease and, if Tenant is in default, setting forth
the specific nature of all such defaults. Owner acknowledges
that any statement delivered pursuant to this subsection may
be relied upon by any institutional lender making loans to
Tenant, or any prospective assignee of Tenant's interest in
this Lease (whether pursuant to the provisions of Section
11.06 or otherwise) or by any prospective subtenants or by
any entity which acquires all or substantially all of the
issued and outstanding capital stock of Tenant, provided,
however, the foregoing provisions of this sentence shall not
be deemed to give Tenant any rights of assignment and
subletting which are not expressly provided for in this
Lease.
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Section 47.10. If Owner assigns its interest in this Lease,
or the rents payable hereunder, to the holder of any
mortgage or the lessor under any ground or underlying lease,
whether the assignment shall be conditional in nature or
otherwise, Tenant agrees that (a) the execution thereof by
Owner and the acceptance by such holder or lessor shall not
be deemed an assumption by such holder or lessor of any of
the obligations of the Owner under this Lease unless such
holder or lessor shall, by written notice sent to Tenant,
specifically otherwise elect, and (b) except as aforesaid,
such holder or lessor shall be treated as having assumed
Owner's obligations hereunder only upon the foreclosure of
such holder's mortgage or the termination of such lessor's
lease and the taking of possession of the Demised Premises
by such holder or lessor, as the case may be.
Section 47.11. Tenant agrees to cooperate with Owner in
Owner's obtaining any Non-Disturbance Agreement and Tenant
Recognition Agreement and Tenant shall provide Owner and the
holder of any mortgage and lessor under any ground or
underlying lease with any information reasonably required by
them in connection with obtaining any such Non-Disturbance
Agreement or Tenant Recognition Agreement, including,
without limitation, financial statements of Tenant.
ARTICLE 48
ADDENDUM TO ARTICLE 1
Section 48.01. Notwithstanding anything in Section 1.02 to
the contrary, in the event the Commencement Date shall not
have occurred on or prior to April 1, 1991, Tenant shall
have a single option to cancel this Lease and the Demised
Term by giving notice to Owner of such cancellation within
ten (10) days next following said date, as said date may be
extended pursuant to the following provisions of this
Section 48.01. Upon the giving of such notice this Lease
and Demised Term shall expire and come to an end as of the
date of the giving of such notice, and security deposited by
Tenant hereunder shall be promptly returned to Tenant, and
Owner and Tenant shall be released and discharged of and
from any and all further liability under the provisions of
this Lease. Time is of the essence with respect to the
exercise by Tenant of such option. If Tenant shall fail to
give timely notice exercising the foregoing option to cancel
this Lease and the Demised Term, then the Demised Term shall
commence and end in accordance with the provisions of
Section 1.02. Owner shall have the right to extend the date
April 1, 1991 set forth above in this Section by a period
equal to the aggregate of (i) the number of days, if any,
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which may have elapsed between the date upon which Tenant is
required to submit to Owner a Tenant s Plan pursuant to
paragraph II of Schedule A and the date of submission by
Tenant to Owner of a Tenant's Plan which shall have met with
Owner's approval as provided in said paragraph II plus (ii)
the number of days, if any, of delay or delays in
substantial completion of Owner s Initial Construction
occasioned by reason of Tenant s delays in submitting any
other plans and specifications or in supplying information,
or in approving plans, specifications or estimates, or in
giving authorizations or by reason of any Change Work as
defined in Schedule A or by reason of Tenant s delay in
exercising the option to supply the modular systems for the
broadcasting studio portion of the Demised Premises or by
reason of any delays in the delivery of such modular systems
supplied by Tenant or by reason of any similar acts or
omissions of Tenant plus (iii) the number of days, if any,
of delay or delays in substantial completion of Owner's
Initial Construction occasioned by reason of strikes or
other labor disputes, fire or other casualty (or reasonable
delays in adjustment of insurance), accidents, orders or
regulations of any Federal, State, County or Municipal
authority, or by any other cause beyond Owner's control,
whether or not such other cause shall be similar in nature
to those hereinbefore enumerated. The provisions of
subparagraph II (2) of Schedule A shall not be affected by
the provisions of this Section. Notwithstanding anything to
the contrary contained in the foregoing provisions of this
Section, in the event Tenant shall use or occupy all or any
part of the Demised Premises for the conduct of business
prior to the Commencement Date, the foregoing option to
terminate this Lease in
accordance with the provisions of this Section shall be of
no further force or effect.
ARTICLE 49
ADDENDUM TO ARTICLE 5
Section 49.01. As long as Tenant is not in default under any
of the terms, covenants and conditions of this Lease beyond
the applicable grace periods provided herein for the curing
of such default, Owner at Owner's sole cost and expense,
shall make (i) all structural repairs and replacements to
the Demised Premises (including, without limitation, the
core toilets) as and when required, (ii) all repairs
necessary to furnish the utilities and services required to
be furnished by Owner to Tenant under the provisions of
Article 29, with the exception of repairs to any special
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HVAC equipment installed to serve the Demised Premises (in
contradistinction to the Building HVAC systems), and (iii)
all repairs and replacements to the public portions of the
Building necessary to Tenant's use of the Demised Premises,
except that Owner shall not be required to make any repairs
referred to in subdivisions (i) (ii) and (iii) of this
sentence if Tenant is obligated to make such repairs
pursuant to the provisions of Section 5.01. Notwithstanding
the foregoing provisions of this Section, Owner shall have
no obligation to make any repairs or replacements unless and
until specific notice of the necessity therefor shall have
been given by Tenant to Owner.
Section 49.02. If (i) Owner shall default in its obligations
to make repairs solely in the Demised Premises, in
accordance with the provisions of Section 49.01, and (ii)
Tenant shall notify Owner of the existence of such default
and (iii) Owner shall (x) fail to start to cure such default
within ten (10) business days after said notice or shall
fail thereafter to prosecute to completion with reasonable
diligence the work necessary to cure such default or (y)
fail to notify Tenant within ten (10) business days after
said notice that Owner is unable to start to cure such
default because of inability to obtain materials, or strikes
or other labor disputes, fire or other casualty (or
reasonable delays in adjustment of insurance), accidents,
orders or regulations of any Federal, State, County or
Municipal authority or by any other cause beyond Owner's
reasonable control, whether or not such cause shall be
similar in nature to those hereinbefore enumerated, and
thereafter fail to commence curing such default within ten
(10) business days after such inability or other cause no
longer exists and to complete such curing in a reasonably
diligent manner, then Tenant may take action to cure such
default. In the event Tenant cures any such default in
accordance with the foregoing provisions of this Section,
any reasonable expenditures made by Tenant to cure such
default shall be repaid by Owner to Tenant within twenty
(20) days after demand and, if Owner fails to pay any such
sum within such twenty (20) day period, Tenant may offset
and deduct such sum from the next accruing monthly
installments of Fixed Rent.
ARTICLE 50
NO RE-ENTRY OR CROSS-OVER FLOOR
Section 50.01. Owner agrees that during the Demised Term the
seventeenth (17th) floor of the Building shall not be
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designated as a re-entry floor or cross-over floor or used
as such.
ARTICLE 51
SECURITY
Section 51.01. A. Tenant shall have the right to require
Owner to return to Tenant that portion of the security
deposited by Tenant and then held by Owner pursuant to the
provisions of Article 35 in the event that prior to the
return by Owner to Tenant of such security, or the unapplied
portion thereof, Tenant shall deposit with Owner an
irrevocable, unconditional letter of credit issued by Chase
Manhattan Bank N.A. or any other bank having assets of at
least ONE BILLION ($1,000,000,000.00) DOLLARS and which is a
member of the New York Clearing House Association (Chase
Manhattan Bank N.A. or any such other bank meeting the
foregoing requirements and issuing the initial or any
replacement letter of credit is referred to as the "Bank")
in favor of Owner in a sum equal to FOUR HUNDRED THOUSAND
($400,000.00) DOLLARS, as security for the faithful
observance and performance by Tenant of the terms, covenants
and conditions of this Lease on Tenant's part to be observed
and performed. From and after the receipt by Owner of such
letter of credit and the receipt by Tenant of such security
or the unapplied portion thereof, the provisions of Article
35 shall be of no further force and effect. Such letter of
credit shall be in form and substance satisfactory to Owner.
Owner agrees that a letter of credit which is in the form
annexed hereto as Exhibit 1 shall be deemed satisfactory to
Owner. Tenant agrees to cause the Bank to renew such letter
of credit, from time to time, during the Demised Term, at
least ninety (90) days prior to the expiration of said
letter of credit or any renewal or replacement, upon the
same terms and conditions. In the event of any transfer of
said letter of credit pursuant to Section 51.05, and notice
of such transfer to Tenant, Tenant, within twenty (20) days
thereafter, shall cause a new letter of credit to be issued
by said Bank to the transferee, upon the same terms and
conditions, in replacement of the letter of credit so
transferred and Owner agrees that, simultaneously with the
delivery of such new letter of credit, it will return to
said Bank the letter of Credit being replaced. The letter
of credit deposited hereunder, and all renewals and
replacements, are referred to, collectively, as the "Letter
of Credit". The Letter of Credit shall be held in trust by
Owner for the purposes set forth in this Article and shall
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not be transferred except for transfer (a) to an agent for
collection, or (b) pursuant to the provisions of Section
51.05. In the event Tenant defaults beyond any applicable
grace period hereunder in the performance of its obligations
to issue a replacement Letter of Credit, or in the
observance or performance of Tenant's agreement to cause the
Bank to renew the Letter of Credit, Owner, in addition to
all rights and remedies which Owner may have under this
Lease or at law, shall have the right to require the Bank to
make payment to Owner of the entire sum of FOUR HUNDRED
THOUSAND ($400,000.00) DOLLARS or the undrawn portion
thereof, as the case may be, represented by the Letter of
Credit, which sum shall be held by Owner as Cash Security in
the same manner as if said sum had been deposited with Owner
pursuant to the provisions of subsection B of this Section.
If said payment of the entire sum of FOUR HUNDRED THOUSAND
($400,000.00) DOLLARS is made to Owner by reason of Tenant's
failure to renew or replace the Letter of Credit in
accordance with the foregoing provisions of this subsection,
such default by Tenant shall be deemed cured by such
payment, with the effect that Owner shall not have the right
to terminate this Lease or the term hereof by reason of such
default, but the foregoing provision shall not apply to any
other default under this Lease. The Letter of Credit
provides for partial drawings. In the event Tenant defaults
in the payment when due of an installment of Fixed Rent or
in the payment when due of any additional rent and such
default shall continue for a period of ten (10) days after
notice by Owner to Tenant of such default or if this Lease
and the Demised Term shall expire and come to an end as
provided in Article 16 or by or under any summary proceeding
or any other action or proceeding, or if Owner shall
re-enter the Demised Premises as provided in Article 17, or
by or under any summary proceeding or any other action or
proceeding, then Owner, in addition to all rights and
remedies which Owner may have under this Lease or at law,
may from time to time, draw on the Letter of Credit in one
or more drawings for the amount of any Fixed Rent or
additional rent then due and for any amount then due and
payable to Owner under Article 18 or Article 19. In the
event of a partial drawing, as provided in the immediately
preceding sentence, Tenant shall, within five (5) days after
demand, cause the Bank to issue an amendment to the Letter
of Credit restoring the amount available thereunder to FOUR
HUNDRED THOUSAND ($400,000.00) DOLLARS.
B. At any time during the term of this Lease, Tenant
may require that Owner return the Letter of Credit by
depositing with Owner, in lieu thereof, as security for the
faithful observance and performance by Tenant of the terms,
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covenants and conditions of this Lease on Tenant's part to
be observed and performed, the sum of FOUR HUNDRED THOUSAND
($400,000.00) DOLLARS, in cash or by a cashier's check,
drawn by or on a bank, which is a member of the New York
Clearing House Association, and payable to the order of
Owner, which sum is referred to as the "Cash Security . Any
Cash Security shall be held subject to the provisions of
Section 7-103 of the General Obligations Law or any similar
statute successor thereto.
C. At any time during the term of this Lease, Tenant
may require that Owner return any Cash Security by
delivering to Owner in lieu thereof, as security for the
faithful observance and performance by Tenant of the terms,
covenants and conditions of this Lease on Tenant's part to
be observed and performed an irrevocable, unconditional
Letter of Credit in the Slim of FOUR HUNDRED THOUSAND
($400,000.00) DOLLARS, provided such Letter of Credit is
issued by the Bank in the form annexed hereto as Exhibit l.
Section 51.02. In the event Tenant defaults in the
observance or performance of any term, covenant or condition
of this Lease on Tenant's part to be observed or performed,
including, but not limited to, the covenant for the payment
of Fixed Rent and additional rent, beyond the applicable
grace period provided under this Lease for curing such
default, Owner may use, apply or retain the whole or any
part of any Cash Security held by Owner under any of the
provisions of Section 51.01, to the extent required for the
payment of any Fixed Rent, additional rent or any other sum
with respect to which Tenant is in default, or for the
payment of any sum which Owner may expend or incur because
of Tenant's default in the observance or performance of any
such term, covenant or condition, including, but not limited
to, the payment of any damages or deficiency in the
reletting of the Demised Premises, whether such damage or
deficiency accrued before or after summary proceedings or
other re-entry by Owner, without thereby waiving any other
rights or remedies of Owner with respect to such default,
and Owner shall hold the remainder of such Cash Security as
security for the faithful performance and observance by
Tenant of the terms, covenants and conditions of this Lease
on Tenant's part to be observed and performed with the same
rights as hereinabove set forth to use, apply or retain all
or any part of such remainder in the event of any further
default by Tenant under this Lease.
Section 51.03. If Owner uses, applies or retains the whole
or any part of the Cash Security held by Owner under any of
the provisions of Section 51.01, Tenant, promptly after
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notice thereof, shall deliver to Owner, in cash or by a
cashier s check drawn by or on a bank which is a member of
the New York Clearing House Association and payable to the
order of Owner, the sum necessary to restore the Cash
Security to the sum of FOUR HUNDRED THOUSAND ($400,000.00)
DOLLARS.
Section 51.04. The Letter of Credit and/or any remaining
portion of any Cash Security then held by Owner for the
performance of Tenant's obligations under this Lease as
security shall be returned to Tenant after (i) the
Expiration Date and (ii) delivery of the entire possession
of the Demised Premises to Owner and (iii) payment by Tenant
for any costs of repairs or restoration required to be paid
by Tenant pursuant to this Lease and (iv) payment by Tenant
of any other sum or charge required to be paid to fully
discharge Tenant's obligations under this Lease to and
including the Expiration Date.
Section 51.05. In the event of a sale or other transfer of
the Land and/or Building, or Owner's interest in this Lease,
Owner shall transfer the Letter of Credit and/or any
remaining portion of any Cash Security then held by Owner as
security for the performance of Tenants obligations under
this Lease to the transferee, and Owner shall thereupon be
released from all liability for the return of such security;
Tenant agrees to look solely to the transferee for the
return of any such security and it is agreed that the
provisions of this sentence shall apply to every sale or
transfer of the Land and/or Building by Owner named herein
or its successors, and to every transfer or assignment made
of any such security. Any transferee shall be deemed to
have agreed that any Letter of Credit or Cash Security
transferred to such transferee pursuant to this Section
shall be held in trust for the purposes of this Article. A
lease of the entire Building pursuant to which the lessee
shall be entitled to collect the rents hereunder shall be
deemed a transfer within the meaning of this Section.
Section 51.06. Owner agrees that, if not prohibited by law
or the general policies of lending institutions in New York
City, Owner shall deposit any Cash Security held by Owner in
a money market account selected by Owner with Chase
Manhattan Bank N.A. in New York, New York, and all interest
accruing thereon shall be remitted to Tenant annually,
provided Tenant is not then in default beyond the applicable
grace periods provided in this Lease for the curing of such
default. Section 51.07. Tenant agrees that it will not
assign, mortgage or encumber, or attempt to assign, mortgage
or encumber, the Letter of Credit or any Cash Security held
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by Owner under this Lease, and that neither Owner nor its
successors or assigns shall be bound by any such assignment,
mortgage, encumbrance, attempted assignment, attempted
mortgage or attempted encumbrance. Owner shall not be
required to exhaust its remedies against Tenant before
having recourse to the Letter of Credit, the Cash Security
or any other security held by Owner. Recourse by Owner to
the Letter of Credit, the Cash Security or any other
security held by Owner shall not affect any remedies of
Owner which are provided in this Lease or which are
available in law or equity.
Section 51.08. A. Owner has agreed that Owner shall return
to Tenant the sum of ONE HUNDRED THIRTY THREE THOUSAND THREE
HUNDRED THIRTY THREE ($133,333.00) DOLLARS of such security
on the date (referred to as the "Initial Partial Return
Date") two (2) years next following the Commencement Date
provided Tenant is not then in default under any of the
terms, covenants or conditions of this Lease on Tenant's
part to be observed and performed beyond the applicable
grace period for the curing of such default. Accordingly,
if on the Initial Partial Return Date Tenant shall not so be
in default Tenant may replace the Letter of Credit with a
Letter of Credit in a sum reduced by ONE HUNDRED THIRTY
THREE THOUSAND THREE HUNDRED THIRTY THREE ($133,333.00)
DOLLARS. In the event that at any time Tenant shall be
entitled to reduce such Letter of Credit as provided in the
foregoing provisions of this Article the security shall be
held as Cash Security then, in lieu of Tenant replacing any
such Letter of Credit, Owner shall return sums to Tenant
equal to the amount by which the Letter of Credit would have
been reduced if it were in existence; however, in no event
shall the Letter of Credit or Cash Security ever be reduced
below the sum of TWO HUNDRED SIXTY SIX THOUSAND SIX HUNDRED
SIXTY SEVEN ($266,667.00) DOLLARS, subject to the provisions
of subsection B hereof. The sum of FOUR HUNDRED THOUSAND
($400,000.00) DOLLARS referred to in the previous Sections
of this Article shall be deemed reduced as the provisions of
this subsection B of this Section 51.08 shall operate to so
reduce the Letter of Credit and/or Cash Security, as the
case may be.
B. Owner has agreed that Owner shall return to Tenant
the sum of ONE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED
THIRTY THREE ($133,333.00) DOLLARS of such security on the
date (referred to as the "Partial Return Date") four (4)
years next following the Commencement Date, provided Tenant
is not then in default under any of the terms, covenants or
conditions of this Lease on Tenant's part to be observed and
performed beyond the applicable grace period for the curing
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of such default. Accordingly, if on the Partial Return Date
Tenant shall not so be in default, Tenant may replace the
Letter of Credit with a letter of credit in a sum reduced by
ONE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED THIRTY THREE
($133,333.00) DOLLARS. In the event that at any time Tenant
shall be entitled to reduce such Letter of Credit as
provided in the foregoing provisions of this Article the
security shall be held as Cash Security then, in lieu of
Tenant replacing any such Letter of Credit, Owner shall
return sums to Tenant equal to the amount by which the
Letter of Credit would have been reduced if it were in
existence; however, in no event shall the Letter of Credit
or Cash Security ever be reduced below the sum of ONE
HUNDRED THIRTY THREE THOUSAND DOLLARS. The sum of TWO
HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SEVEN
($266,667.00) DOLLARS referred to in the previous Sections
of this Article shall be deemed reduced as the provisions of
this subsection B of this Section 51.08 shall operate to so
reduce the Letter of Credit and/or Cash Security, as the
case may be.
C. Owner and Tenant acknowledge that the provisions
of Sections 35.02 and 35.03 are intended to be comparable to
the provisions of subsections A and B of this Section 51.08
and are designed to apply in the event that Tenant initially
deposits Cash Security in accordance with the provisions of
Article 35. Accordingly, in the event that Owner has
returned to Tenant any portions of the security deposited
by Tenant with Owner pursuant to the provisions of Article
35 in accordance with the provisions of Sections 35.02 and
35.03 of said Article 35, then the initial sum of the Letter
of Credit referred to in Section 51.01.A shall be reduced to
the amount of security then permitted to be held by Owner
pursuant to the provisions of Article 35 and the applicable
provisions of subsections A and/or B of this Section 51.08
which correspond with the applicable provisions of Sections
35.02 and 35.03, as the case may be, shall be deemed deleted
from this Lease and of no further force and effect.
ARTICLE 52
ADDENDUM TO ARTICLE 6
Section 52.01. Notwithstanding anything contained in
Section 6.02 to the contrary, Tenant shall not be deemed to
have caused any increase in the fire insurance rates
applicable to the Building or property located therein at
the beginning of the Demised Term or at any time thereafter,
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nor shall Tenant be required to make any Alterations in
order to comply with any rules, orders, regulations or
requirements of the New York Board of Fire Underwriters and
the New York Fire Insurance Rating Organization or any
similar body, unless such rates are increased, or such
Alterations shall be necessitated or occasioned, in whole or
in part, by the acts, omissions or negligence of Tenant or
any person claiming through or under Tenant, or any of their
servants, employees, contractors, agents, visitors or
licensees, or by the manner of use or occupancy of the
Demised Premises by Tenant or any such persons (in
contradistinction to the mere use or occupancy of the
Demised Premises for the purposes set forth in Section
2.01).
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STANDARD OFFICE LEASE--GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
[LOGO OF INDUSTRIAL AIR APPEARS HERE]
1. BASIC LEASE PROVISIONS ("Basic Lease Provisions")
1.1 PARTIES: This Lease dated for reference purposes only December 18,
------------
1991 is made by and between VALENCIA PARAGON ASSOCIATES, LTD., a California
---- -----------------------------------------------
Limited Partnership (herein called "Lessor") and UNISTAR COMMUNICATIONS GROUP,
------------------- -----------------------------
INC., a Delaware corporation (herein called "Lessee").
---- --------
1.2 PREMISES: Suite Number(s) The entire ground floor of Building No. 5
-----------------------------------------
consisting of approximately 31,529 rentable square feet, more or less, as
---------------------------
defined in paragraph 2 and as shown on Exhibit "A" hereto (the "Premises").
1.3 BUILDING: Commonly described as being located at 25060 Avenue
Stanford
---------------------
in the City of Valencia
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County of Ventura
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State of California as more particularly described in Exhibit B hereto,
----------- ---
and as defined in paragraph 2.
1.4 USE: executive and general offices, broadcasting and production of
--------------------------------------------------------------
programming and any lawful related activities subject to paragraph 6.
---------------------------------------------
1.5 TERM: Approximately ten (10) years Commencing on the "Commencement
---------------------------- ------ ------------
Date" (as defined in Addendum Paragraph 50(c)) and ending the "Expiration
---------------------------------------------- ----------------
Date" (as defined in Addendum Paragraph 50(c)).
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1.6 BASE RENT: $42,835.30 per month, payable on the 1st day of
-------------------- ---
each month, per paragraph 41
.
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1.7 BASE RENT INCREASE: The monthly Base Rent payable under paragraph 1.6
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above shall be adjusted as provided in Addendum Paragraph 53.
1.8 RENT PAID UPON EXECUTION: $42,835.30 as Base Rent for the first month
---------------------------------------------
of the Term for
.
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1.9 SECURITY DEPOSIT: None
.
----------------------------------------------------
1.10 LESSEE'S SHARE OF OPERATING EXPENSE INCREASE: 19.19% as defined
-----
in paragraph 4.2. Lessor and Lessee agree that the number of rentable square
feet of the Premises is 31,529 rentable square feet and the number of rentable
square feet of the Office Building Project is 164,292 rentable square feet.
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2. PREMISES, PARKING AND COMMON AREAS .
-------------------
2.1 PREMISES: The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic Lease
Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and
improvements thereon or thereunder, are herein collectively referred to as the
"Office Building Project." Lessor hereby leases to Lessee and Lessee leases
from Lessor for the term, at the rental, and upon all of the conditions set
forth herein, the real property referred to the Basic Lease Provisions,
paragraph 1.2, as the "Premises," including rights to the Common Areas as
hereinafter specified.
2.2 VEHICLE PARKING: So long as Lessee is not in default and subject to
the rules and regulations attached hereto and as reasonably established by
Lessor from time to time, Lessee shall be entitled to rent and use four (4)
--------
parking spaces per 1,000 rentable square feet (or part thereof) of the
Premises in the area shown on Exhibit "B" as Lessor's parking, free during the
initial term hereof and thereafter at the monthly rate applicable from time to
time for monthly parking as set by Lessor and/or its licensee.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor
shall have the right, with oral notice to Lessee's designated representative
at the Premises, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2 During the term following the initial term the monthly parking
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rate per parking space will be the fair market value for such spaces. Monthly
parking fees shall be payable one month in advance prior to the first day of
each calendar month.
2.3 COMMON AREAS--DEFINITION. The term "Common areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary
line of the Office Building Project that are provided and designated by the
Lessor from time to time for the general non-exclusive use of Lessor, Lessee
and of other lessees of the Office Building Project and their respective
employees, suppliers, shippers, customers and invitees, including but not
limited to common entrances, lobbies, corridors, stairways and stairwells,
public restrooms, elevators, escalators, parking areas to the extent not
otherwise prohibited by this Lease, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, ramps, driveways, land-scaped areas
and decorative walls.
2.4 COMMON AREAS--RULES AND REGULATIONS. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with respect
to the Office Building Project and Common Areas, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform. Lessor
or such other person(s) as Lessor may appoint shall have the exclusive control
and management of the Common Areas and shall have the right, from time to
time, to modify, and amend and enforce said rules and regulations. Lessor
shall not be responsible to Lessee for the non-compliance with said rules and
regulations by other lessees, their agents, employees and invitees of the
Office Building Project.
2.5 COMMON AREAS--CHANGES: Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and Common
Areas, but without unreasonably affecting Lessee's use and enjoyment of the
Premises or Common Areas and without permanently relocating Lessee's parking
spaces to an area not comparative to Lessee's current parking spaces
including, without limitation, changes in the location, size, shape, number,
and appearance thereof, including but not limited to the lobbies, windows,
stairways, air shafts, elevators, escalators, restrooms, driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, decorative walls, landscaped areas and walkways:
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law:
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available.
(c) To designate other land and improvements outside the boundaries
of the Office Building Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional relationship
to the Office Building Project without substantially increasing Lessee's costs
in comparison to any extra benefits Lessee may receive thereby.
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(d) To add additional buildings and improvements to the Common Areas
without substantially increasing Lessee's costs in comparison to any extra
benefits Lessee may receive thereby.
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof, but without unreasonably affecting Lessee's use and enjoyment
of the Premises or Common Areas and without permanently relocating Lessee's
parking spaces to an area not comparative to Lessee's current parking spaces.
(f) To do and perform such other acts and make such other changes in
to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgement deem to be appropriate but
without unreasonably affecting Lessee's use and enjoyment of the Premises or
Common Areas and without permanently relocating Lessee's parking spaces to an
area not comparative to Lessee's current parking spaces.
3. TERM.
3.1 TERM. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease Provisions.
4. RENT.
4.1 BASE RENT. Subject to adjustment as hereinafter provided in paragraph
4.3 and except as may be otherwise expressly provided in this Lease. Lessee
shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6
of the Basic Lease Provisions, without offset or deduction except as set forth
in this Lease. Lessee shall pay Lessor upon execution hereof the advance Base
Rent described in paragraph 1.8 of the Basic Lease Provisions. Rent for any
period during the term hereof which is for less than one month shall be
prorated based upon the actual number of days of the calendar month involved.
Rent shall be payable in lawful money of the United States to Lessor at the
address stated herein or to such other persons or at such other places as
Lessor may designate in writing.
4.2 OPERATING EXPENSE INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share, as hereinafter
defined, of the amount by which all Operating Expenses, as hereinafter
defined, for each Comparison Year exceeds the amount of all Operating Expenses
for the Base Year, such excess being hereinafter referred to as the "Operating
Expense Increase," in accordance with the following provisions
(a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate square footage of
the Premises by the total approximate square footage of the rentable space
contained in the Office Building Project. It is understood and agreed that the
square footage figures set forth in the Basic Lease Provisions are
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approximations which Lessor and Lessee agree are reasonable and shall not be
subject to revision except in connection with an actual change in the size of
the Premises or a change in the space available for lease in the Office
Building Project due to a cause outside the reasonable control of Lessor.
(b) "Base Year" is defined as the first twelve months following the
Commencement Date.
(c) "Comparison Year" is defined as each period of twelve months
during the term of this Lease subsequent to the Base Year; provided, however,
Lessee shall have no obligation to pay a share of the Operating Expense
increase applicable to the first twelve (12) months of the Lease Term.
Lessee's Share of the Operating Expense increase for the first and last
Comparison Years of the Lease Term shall be prorated according to that portion
of such Comparison Year as to which Lessee is responsible for a share of such
increase.
(d) Subject to Addendum Paragraph 54, "Operating Expenses" is
defined, for purposes of this Lease, to include the following costs:
(i) The operation, repair, maintenance, and replacement, in
neat, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:
(aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets, drapes and window coverings, and including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and
roofs, fences and gates.
(bb) All heating, air conditioning, plumbing, electrical
systems, life safety equipment, telecommunication and other equipment used in
common by, or for the benefit of, lessees or occupants of the Office Building
Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.
(ii) Trash disposal;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the liability and property
insurance policies to be maintained by Lessor under paragraph 8 hereof;
(v) The amount of the real property taxes to be paid by Lessor
under paragraph 10.1 hereof (See Paragraph 54(b) of the Addendum);
(vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project.
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(vii) Replacing and/or adding improvements to the Building or
Common Areas mandated by any governmental agency and any repairs or removals
necessitated thereby amortized over its useful life according to Federal
income tax regulations or guidelines for depreciation thereof (including
interest on the unamortized balance as is then reasonable in the judgment of
Lessor's accountants).
(e) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise
reimbursed by any third party, other tenant, or by insurance proceeds, or any
casualty losses, whether or not covered by any insurance proceeds (except to
the extent of any commercially reasonable deductible).
6. USE
6.1 USE. The Premises shall be used and occupied only for the purpose set
forth in paragraph 1.4 of the Basic Lease Provisions or any other use which is
reasonably comparable to that use and for no other purpose.
6.2 COMPLIANCE WITH LAW.
(a) Lessor warrants to Lessee that, to Lessor's actual knowledge, the
Premises, in the state existing on the date that the Lease term commences, but
without regard to alterations or improvements made by Lessee or the use for
which Lessee will occupy the Premises, does not violate any covenants or
restrictions of record or any applicable building code, regulation or
ordinance in effect on such Lease term Commencement Date. In the event it is
determined that such a violation exists on the Commencement Date, then it
shall be the obligation of the Lessor, after written notice from Lessee, to
promptly, at Lessor's sole cost and expense, rectify any such violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy
from that now existing, during the term or any part of the term hereof,
relating to Lessee's particular use of the Premises. Lessee shall conduct its
business in a lawful manner and shall not use or permit the use of the
Premises or the Common Areas in any manner that will tend to create waste or a
nuisance or shall tend to disturb other occupants of the Office Building
Project.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee in a clean condition
on the Lease Commencement Date (unless Lessee is already in possession) and
Lessor warrants to Lessee that the plumbing, lighting, air conditioning, and
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heating system in the Premises shall be in good operating condition. In the
event that it is determined that this warranty has been violated, then it
shall be the obligation of Lessor, after receipt of written notice from Lessee
setting forth with specificity the nature of the violation, to promptly, at
Lessor's sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises and the Office Building Project in their condition existing as of
the Lease Commencement Date, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record,
and accepts this Lease subject thereto and to all matters disclosed thereby
and by any exhibits attached hereto Lessor represents that to the best of its
knowledge, none of the foregoing prohibit Lessee's use and occupancy of the
Premises in accordance with the terms of this Lease. Lessee acknowledges that
it has satisfied itself by its own independent investigation that the Premises
are suitable for its intended use, and that neither Lessor nor Lessor's agent
or agents has made any representation or warranty as to the present or future
suitability of the Premises, Common Areas, or Office Building Project for the
conduct of Lessee's business, except as set forth herein.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Lessor shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and common areas,
and the equipment and all utility and other Building systems (except as
expressly set forth to the contrary herein) whether used exclusively for the
Premises or in common with other premises, in good condition and repair;
provided, however, Lessor shall not be obligated to paint, repair or replace
the floor coverings, wall coverings, or to repair or replace any improvements
that are not ordinarily a part of the Building or are above then Building
standards unless they were part of the Lessee Improvements or as otherwise
expressly set forth herein. Except as expressly set forth herein, there shall
be no abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any
part thereof. Lessee expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this lease because of Lessor's
failure to keep the Premises in good order, condition and repair.
7.2 LESSEE'S OBLIGATIONS.
(a) Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located)
that serves only Lessee or the Premises, to the extent such cost is
attributable to Lessee's negligence. Except as set forth herein, Lessee shall
be responsible for the cost of painting, repairing or replacing wall
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coverings, and to repair or replace any Premises improvements that are not
ordinarily a part of the Building or that are above then Building standards.
Lessor may, at its option, upon reasonable notice, elect to have Lessee
perform any particular such maintenance or repairs, the cost of which is
otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as
received, ordinary wear and tear excepted, clean and free of debris. Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices by
Lessee. Lessee shall repair any damage to the Premises occasioned by the
installation or removal of Lessee's trade fixtures, alterations, furnishings
and equipment. Except as otherwise stated in this Lease. Lessee shall leave
the air lines, power panels, electrical distribution systems, lighting
fixtures, air conditioning, window coverings, wall coverings, carpets, wall
panelling, ceilings and plumbing on the Premises and in good operating
condition.
7.3 ALTERATIONS AND ADDITIONS
(a) Lessee shall not, without Lessor's prior written consent make
alterations, improvements, additions, Utility Installations or repairs in, on
or about the Premises, or the Office Building Project. As used in this
paragraph 7.3 the term "Utility Installation" shall mean carpeting, window and
wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication
wiring and equipment. At the expiration of the term by providing notice to
Lessee at the time of its consent to such item(s), Lessor may require the
removal of any or all of said alterations, improvements, additions or Utility
Installations, (but not the Lessee Improvements), and the restoration of the
Premises and the Office Building Project to their prior condition, at Lessee's
expense. When making its own alterations, improvements, additions or Utility
Installations, Lessee shall use only such contractor as has been expressly
approved by Lessor. Should Lessee make any alterations, improvements,
additions or Utility Installations without the prior approval of Lessor, or
use a contractor not expressly approved by Lessor, Lessor may, at any time
during the term of this Lease, require that Lessee remove any part or all of
the same.
(b) Any alterations, improvements, additions or Utility Installations
in or about the Premises or the Office Building Project that Lessee shall
desire to make shall be presented to Lessor in written form, with proposed
detailed plans. If Lessor shall give its consent to Lessee's making such
alteration, improvement, addition or Utility Installation, the consent shall
be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior to
the commencement of the work, and compliance by Lessee with all conditions of
said permit in a prompt and expeditious manner.
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(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days notice prior
to the commencement of any work in the Premises by Lessee and Lessor shall
have the right to post notices of non-responsibility in or on the Premises or
the Building as provided by law. If Lessee shall in good faith contest the
validity of any such lien claim or demand, then Lessee shall at its sole
expense defend itself and Lessor against the same and shall pay and satisfy
any such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office
Building Project, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount
equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises, the Building and the Office
Building Project free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's reasonable attorneys' fees and costs
in participating in such action if Lessor shall decide it is to Lessor's best
interest so to do.
(e) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including
but not limited to, floor coverings, panelings, doors, drapes, built-ins,
moldings, sound attenuation and lighting and telephone or communications
systems, conduit, wiring and outlets, shall be made and done in a good and
workmanlike manner and of good and sufficient quality and materials and shall
be the property of Lessor and remain upon and be surrendered with the Premises
at the expiration of the Lease term, unless Lessor requires their removal
pursuant to paragraph 7.3(a). Provided Lessee is not in default,
notwithstanding the provisions of this paragraph 7.3(e), Lessee's personal
property, trade fixtures and equipment, other than Utility Installations,
shall remain the property of Lessee and may be removed by Lessee subject to
the provisions of paragraph 7.2, and provided that Lessee repairs all damage
caused by such removal.
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building
Project, including, but not by way of limitation, such utilities as plumbing,
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electrical systems, communication systems, and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Lessee's use of the Premises or reduce the size of the Premises.
8. INSURANCE: INDEMNITY.
8.1 LIABILITY INSURANCE-LESSEE. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease a policy of Comprehensive
General Liability insurance utilizing an Insurance Services Office standard
form with Broad Form General Liability Endorsement (GL0404), or equivalent, in
an amount of not less than $2,000,000 per occurrence of bodily injury and
property damage combined and shall insure Lessee with Lessor as an additional
insured against liability arising out of the use, occupancy or maintenance of
the Premises. Compliance with the above requirement shall not, however, limit
the liability of Lessee hereunder.
8.2 LIABILITY INSURANCE-LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other
risks Lessor deems advisable from time to time, insuring Lessor and Lessee,
against liability arising out of the ownership, use, occupancy or maintenance
of the Office Building Project in an amount not less than $2,000,000 per
occurrence with a commercially reasonable umbrella.
8.3 PROPERTY INSURANCE-LESSEE. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, earthquake sprinkler leakage and earthquake sprinkler
leakage endorsements, in an amount sufficient to cover not less than 100% of
the full replacement cost, as the same may exist from time to time, of all of
Lessee's personal property, fixtures, equipment and tenant improvements.
8.4 PROPERTY INSURANCE-LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss
or damage to the Office Building Project improvements, but not Lessee's
personal property, fixtures, equipment or tenant improvements, in the amount
of the full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Lessor deems advisable or may be required by a lender having a lien
on the Office Building Project. In addition, Lessor shall obtain and keep in
force, during the term of this Lease, a policy of rental value insurance
covering a period of one year, with loss payable to Lessor, which insurance
shall also cover all Operating Expenses for said period. Lessee will not be
named in any such policies carried by Lessor and shall have no right to any
proceeds therefrom. The policies required by these paragraphs 8.2 and 8.4
shall contain such reasonable deductibles as Lessor or the aforesaid lender
may determine. In the event that the Premises shall suffer an insured loss as
defined in paragraph 9.1(f) hereof, the deductible amounts under the
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applicable insurance policies shall be deemed an Operating Expense. Lessee
shall not do or permit to be done anything which shall invalidate the
insurance policies carried by Lessor. Lessee shall pay the entirety of any
increase in the property insurance premium for the Office Building Project
over what it was immediately prior to the commencement of the term of this
Lease if the increase is specified by Lessor's insurance carrier as being
caused by the nature of Lessee's occupancy or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Lessor and Lessee shall deliver to the other
copies of liability insurance policies required under paragraph 8.1 and 8.2 or
certificates evidencing the existence and amounts of such insurance within
seven (7) days after the Commencement Date of this Lease. No such policy shall
be cancellable or subject to reduction of coverage or other modification
except after thirty (30) days prior written notice to each party. Lessor and
Lessee shall, at least thirty (30) days prior to the expiration of such
policies, furnish the other with renewals thereof.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to any
insurable perils whether or not covered by property insurance carried by such
party or required to be carried hereunder, whether due to the negligence of
Lessor or Lessee or their agents, employees, contractors and/or invitees. If
necessary all property insurance policies required under this Lease shall be
endorsed to so provide.
8.7 INDEMNITY. Lessee shall indemnify and hold harmless Lessor and its
agents, Lessor's master or ground lessor, partners and lenders, from and
against any and all claims for damage to the person or property of anyone or
any entity arising from Lessee's use of the Office Building Project, or from
the conduct of Lessee's business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the terms
of this Lease, or arising from any act or omission of Lessee, or any of
Lessee's agents, contractors, employees, or invitees, and from and against all
costs, attorneys' fees, expenses and liabilities incurred by Lessor as the
result of any such use, conduct, activity, work, things done, permitted or
suffered, breach, default or negligence, and in dealing reasonably therewith,
including but not limited to the defense or pursuit of any claim or any action
or proceeding involved therein; and in case any action or proceeding be
brought against Lessor by reason of any such matter, Lessee upon notice from
Lessor shall defend the same at Lessee's expense by counsel reasonably
satisfactory to Lessor (unless required by Lessee's insurer) and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to property of
Lessee or injury to persons, in, upon or about the Office Building Project
arising from any cause and Lessee hereby waives all claims in respect thereof
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against Lessor.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Subject to Paragraph 70 of the
Addendum, Lessee hereby agrees that Lessor shall not be liable for injury to
Lessee's business or any loss of income therefrom or for loss of or damage to
the goods, wares, merchandise or other property of Lessee. Lessee's employees,
invitees, customers, or any other person in or about the Premises or the
Office Building Project, nor shall Lessor be liable for injury to the person
of Lessee, Lessee's employees, agents or contractors, whether such damage or
injury is caused by or results from theft, fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Office
Building Project, or from other sources or places, or from new construction or
the repair, alteration or improvement of any part of the Office Building
Project, or of the equipment, fixtures or appurtenances applicable thereto,
and regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible. Lessor shall not be liable for any damages
arising from any act or neglect of any other lessee, occupant or user of the
Office Building Project, nor from the failure of Lessor to enforce the
provisions of any other lease of any other lessee of the Office Building
Project.
8.9 NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent (50%) of the then Replacement Cost
of the Building.
(c) "Premises Building Total Destruction" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that
the cost to repair is fifty percent (50%) or more of the then Replacement Cost
of the Building.
(d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall mean
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if the Office Building Project Buildings are damaged or destroyed to the
extent that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was caused
by an event required to be covered by the insurance described in paragraph 8.
The fact that an Insured Loss has a deductible amount shall not make the loss
an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees, other than those installed by Lessor at Lessee's expense
9.2 PREMISES DAMAGE: PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of either Premises Damage
or Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor's expense (if Lessor
has received insurance proceeds), repair such damage (but not Lessee's
fixtures, equipment or tenant improvements originally paid for by Lessee) to
its condition existing at the time of the damage, and this Lease shall
continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is not
an Insured Loss and which falls within the classification of Premises Damage
or Premises Building Partial Damage, unless caused by a willful act of Lessee
(in which event Lessee shall make the repairs at Lessee's expense), which
damage prevents Lessee from making any substantial use of the Premises, Lessor
may at Lessor's option either (i) repair such damage as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full
force and effect, or (ii) give written notice to Lessee within thirty (30)
days after the date of the occurrence of such damage of Lessor's intention to
cancel and terminate this Lease as of the date of the occurrence of such
damage, in which event this Lease shall terminate as of the date of the
occurrence of such damage and Lessee shall vacate the Premises within 180
days.
9.3 PREMISES BUILDING TOTAL DESTRUCTION: OFFICE BUILDING PROJECT TOTAL
DESTRUCTION. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls into the classifications of either (i) Premises
Building Total Destruction, or (ii) Office Building Project Total Destruction,
then Lessor shall repair such damage or destruction as soon as reasonably
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possible at Lessor's expense (to the extent the required materials are readily
available through usual commercial channels) to its condition existing at the
time of the damage, but not Lessee's fixtures, equipment or tenant
improvements, and this Lease shall continue in full force and effect or, (iii)
either Lessor or Lessee may elect to terminate this Lease upon sixty (60) days
prior written notice to the other party (which termination shall be effective
as of the date of such total destruction).
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last
twelve (12) months of the term of this Lease there is substantial damage to
the Premises, Lessor or Lessee may cancel and terminate this Lease as of the
date of occurrence of such damage by giving written notice to the other of its
election to do so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option
may be exercised has not yet expired, Lessee shall exercise such option, if it
is to be exercised at all, no later than twenty (20) days after the occurrence
of an Insured Loss falling within the classification of Premises Damage during
the last twelve (12) months of the term of this Lease, and only if, Lessee
duly exercises such option during said twenty (20) day period. Lessor shall,
at Lessor's expense, repair such damage, but not Lessee's fixtures, equipment
or tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
during said twenty (20) day period, then Lessor may at Lessor's option
terminate and cancel this Lease as of the expiration of said twenty (20) day
period by giving written notice to Lessee of Lessor's election to do so within
ten (10)days after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option to the contrary.
9.5 ABATEMENT OF RENT: LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the Building or Premises
pursuant to the provisions of this paragraph 9, and any part of the Premises
are not usable (including loss of use due to loss of access or essential
services), the rent payable hereunder (including Lessee's Share of Operating
Expense Increase) for the period during which such damage, repair or
restoration continues shall be abated, provided the damage was not the result
of the willful act of Lessee. Except for said abatement of rent, if any,
Lessee shall have no claim against Lessor for any damage suffered by reason of
any such damage, destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises or
the Building under the provisions of this Paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such occurrence (as
such date is extended by any force majeure or unavoidable delays), or if
Lessor shall not complete the restoration and repair within six (6) months
after such occurrence, Lessee may at Lessee's option cancel and terminate this
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Lease by giving Lessor written notice of Lessee's election to do so at any
time prior to the commencement or completion, respectively, of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
(c) Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any payments made by Lessee to Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as defined
in paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, expect as otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying
any increase in real property tax specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Office Building Project or any
portion thereof the type of which are generally applicable to other buildings
by any authority having the direct or indirect power to tax, including any
city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Office Building
Project or in any portion thereof, as against Lessor's right to rent or other
income therefrom, and as against Lessor's business of leasing the Office
Building Project. The term "real property tax" shall also include any tax,
fee, levy, assessment or charge (i) in substitution of, partially or totally,
any tax, fee, levy, assessment or charge hereinabove included within the
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definition of "real property tax", or (ii) the nature of which was
hereinbefore included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1978, or,
if previously charged, has been increased since June 1, 1978, or (iv) subject
to Paragraph 54(b) of the Addendum, which is imposed as a result of a change
in ownership, as defined by applicable local statutes for property tax
purposes, of the Office Building Project or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such change of ownership, or (v) which is imposed by reason of this
transaction, any modifications or changes hereto, or any transfers hereof.
(See Addendum Paragraph 54(b))
10.4 JOINT ASSESSMENT. If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably
determined by Lessor from the respective valuations assigned in the assessor's
work sheets or such other information (which may include the cost of
construction) as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11. UTILITIES.
11.1 SERVICES PROVIDED BY LESSOR. Subject to Lessee's obligations as set
forth in Paragraph 4.2 and Addendum Paragraph 54, Lessor shall provide
heating, ventilation, air conditioning, and janitorial service as reasonably
required, reasonable amounts of electricity for normal lighting and office
machines, water for reasonable and normal drinking and lavatory use, and
replacement light bulbs and/or fluorescent tubes and ballasts for standard
overhead fixtures.
11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all electricity,
water, gas, heat, light, power, telephone and other utilities and services
specially or exclusively supplied and/or metered exclusively to the Premises
or to Lessee, together with any taxes thereon, to the extent (i) such services
are used after normal business hours (8:00 a.m. to 6:00 p.m., Monday through
Friday) or (ii) the cost of such services used during normal business hours on
a per square foot basis exceeds the Per Foot Rate (as defined in Addendum
Paragraph 54 (e)).
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11.3 HOURS OF SERVICE. Said services and utilities shall be provided 24
hours per day, 7 days per week, except that air conditioning shall be provided
during generally accepted business days and hours or such other days or hours
as may hereafter be set forth. Air conditioning required at other times shall
be subject to advance request and reimbursement by Lessee to Lessor of the
cost thereof. Lessee shall have access to the Premises 24 hours per day, 7
days per week.
11.4 EXCESS USAGE BY LESSEE. Lessee shall not, without Lessor's consent
which shall not be unreasonably withheld, make connection to the utilities
except by or through existing outlets and except for normal office use and
Lessee's production and broadcasting use and shall not install or use
machinery or equipment in or about the Premises that uses excess water,
lighting or power or suffer or permit any act that causes extra burden upon
the utilities or services, including but not limited to security services,
over standard office usage for the Office Building Project. Lessor shall
require Lessee to reimburse Lessor for any excess expenses or costs that may
arise out of breach of this subparagraph by Lessee. Lessor may in its sole
discretion install at Lessee's expense supplemental equipment and/or separate
metering applicable to Lessee's excess usage or loading.
11.5 INTERRUPTIONS. Subject to Addendum Paragraph 73, there shall be no
abatement of rent and Lessor shall not be liable in any respect whatsoever for
the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to riot, strike, labor dispute, breakdown, accident, repair or
other cause beyond Lessor's reasonable control or on in cooperation with
governmental request or directions.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need for notice to Lessee under
paragraph 13.1. "Transfer" within the meaning of this paragraph 12 shall
include the transfer or transfers aggregating (a) if Lessee is a corporation,
more than twenty-five percent (25%) of the voting stock of such corporation,
except if the stock is transferred to a purchaser of all or substantially all
of the stock or pursuant to a registered offering, or (b) if Lessee is a
partnership, more than twenty-five percent (25%) of the profit and loss
participation in such partnership.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
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hereof, Lessee may assign or sublet the Premises, or any portion thereof
without Lessor's consent, to any corporation which controls, is controlled by
or is under common control with Lessee, or to any corporation resulting from
the merger or consolidation with Lessee, or to any person or entity which
acquires all the assets of Lessee as a going concern of the business that is
being conducted on the Premises, all of which are referred to as "Lessee
Affiliate," provided that before such assignment shall be effective, (a) said
assignee shall assume, in full, the obligations of Lessee under this Lease and
(b) Lessor shall be given written notice of such assignment and assumption.
Any such assignment shall not, in any way, affect or limit the liability of
Lessee under the terms of this Lease even if after such assignment or
subletting the terms of this Lease are materially changed or altered without
the consent of Lessee, the consent of whom shall not be necessary.
12.3 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, no assignment or subletting shall
release Lessee of Lessee's obligations hereunder or alter the primary
liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Share of Operating Expense increase, and to perform all
other obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such assignment
or subletting, nor the acceptance of rent, shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the breach of any of
the terms or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to
such sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or
to any subsequent or successive assignment or subletting by the sublessee.
However, Lessor may consent to subsequent sublettings and assignments of the
sublease or any amendments or modifications thereto without notifying Lessee
or anyone else liable on the Lease or sublease and without obtaining their
consent and such action shall not relieve such persons from liability under
this Lease or said sublease; however, such persons shall not be responsible to
the extent any such amendment or modification enlarges or increases the
obligations of the Lessee or sublessee under this Lease or such sublease.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
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Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgement that no default
then exists under this Lease of the obligations to be performed by Lessee nor
shall such consent be deemed a waiver if any then existing default, except as
may be otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied
upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent
null and void.
12.4 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless
of Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly
incorporated therein:
(a) Lessor shall not, by reason of this or any other assignment of
such sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under
such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor (a copy of which shall
be sent to Lessee) stating that a default exists in the performance of
Lessee's obligations under this Lease, to pay to Lessor the rents due and to
become due under the sublease. Lessee agrees that such sublessee shall have
the right to rely upon any such statement and request from Lessor, and that
such sublessee shall pay such rents to Lessor without any obligation or right
to inquire as to whether such default exists and notwithstanding any notice
from or claim from Lessee to the contrary. Lessee shall have no right or claim
against said sublessee or Lessor for any such rents so paid by said sublessee
to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any
sublease, Lessee shall use only such form of sublessee as is satisfactory to
Lessor, and once approved by Lessor, such sublease shall not be changed or
modified in any material manner without Lessor's prior written consent. Any
sublease shall, by reason of entering into a sublease under this Lease, be
deemed, for the benefit of Lessor, to have assumed and agreed to conform and
comply with each and every obligation herein to be performed by Lessee other
than such obligations as are contrary to or inconsistent with provisions
contained in a sublease to which Lessor has expressly consented in writing.
(c) In the event Lessee shall default in the performance of its
obligations under this lease, Lessor at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
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the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for other prior defaults of Lessee under
such sublease.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent or as otherwise provided
herein.
(e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset
from and against Lessee for any such defaults cured by the sublessee.
12.5 LESSOR'S EXPENSES. In the event Lessee shall request the consent of
Lessor to any assignment or subletting or if Lessee shall request the consent
of Lessor for any act Lessee proposes to do, then Lessee shall pay Lessor's
reasonable costs and expenses incurred in connection therewith, including
attorneys', architects', engineers', or other consultants' fees.
12.6 CONDITIONS TO CONSENT. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general
character of the other occupants of the Office Building Project and not in
violation of any exclusives or rights then held by other tenants, and (b) the
proposed assignee or sublessee be at least as financially responsible as
Lessee was expected to be at the time of the execution of this Lease or of
such assignment or subletting, whichever is greater.
13. DEFAULT: REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The abandonment of the Premises by Lessee.
(c) The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due where such failure
shall continue for a period of ten (10) days after written notice thereof from
Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay
Rent or Quit pursuant to applicable Unlawful Detainer statutes. such Notice to
Pay Rent or Quit shall also constitute the notice required by this
subparagraph.
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(d) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs (b) and (c), above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
Lessee commenced such cure within said thirty (30) day period and thereafter
diligently pursues such cure to completion. To the extent permitted by law,
such thirty (30) day notice shall constitute the sole and exclusive notice
required to be given to Lessee under applicable Unlawful Detainer statutes.
(e) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors: (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. (S)101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within sixty
(60) days;(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure
of substantially all of the Lessee's assets located at the Premises or of
Lesses's interest in this Lease, where such seizure is not discharged within
thirty (30) days. In the event that any provision of this paragraph 13.1(e) is
contrary to any applicable law, such provision shall be of no force or effect.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.
13.2 REMEDIES. In the event of any material default or breach of this
Lease by Lessee, Lessor may at any time thereafter, with or without notice or
demand and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee all damages
incurred by Lessor by reason of Lessee's default including, but not limited
to, the cost of recovering possession of the Premises: expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and any real estate commission actually paid; the worth at
the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent for the balance of the term after the time of such award
exceeds the amount of such rental loss for the same period that Lessee proves
could be reasonably avoided: that portion of the leasing commission paid by
Lessor pursuant to paragraph 15 applicable to the unexpired term of this
Lease.
(b) Exercise the remedy described in California Civil Code Section
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1951.4 or any successor section.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date five
(5) days after such payment is due at the lesser of 2% over the prime rate of
Citibank, N.A. or the maximum rate then allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time, but in no
event later than thirty (30) days after written notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance, then Lessor shall not be
in default if Lessor commences performance within such 30-day period and
thereafter diligently pursues the same to completion. (See Addendum Paragraph
72.)
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
to Lessor of Base Rent, Lessee's Share of Operating Expense increase or other
sums due hereunder will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
late charges which may be imposed on Lessor by the terms of any mortgage or
trust deed covering the Office Building Project. Accordingly, if any
installment of Base Rent, Operating Expense Increase, or any other sum due
from Lessee shall not be received by Lessor or Lessor's designee within ten
(10) days after notice that such amount shall be due, then Lessee shall pay to
Lessor a late charge equal to 6% of such overdue amount. The parties hereby
agree that such late charges represent a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee's
default with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof or the Office
Building Project are taken under the power of eminent domain, or sold under
the threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of the
date the condemning authority takes title or possession, whichever first
occurs; provided that if the Premises or any portion thereof are taken such
that Lessee is unable to continue to operate Lessee's business in the Premises
(which shall be defined as a "material" portion of the Premises), Lessee shall
the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date
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condemning authority takes such possession. If Lessee does not terminate this
Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the rent
and Lessee's Share of Operating Expense Increase shall be reduced in the
proportion that the floor area of the Premises taken bears to the total floor
area of the Premises. Common Areas taken shall be excluded from the Common
Areas usable by Lessee and no reduction of rent shall occur with respect
thereto or by reason thereof. If the portion of the Project taken is so much
as to render the Project a not viable office project then Lessor shall have
the option in its sole discretion to terminate this Lease as of the taking of
possession by the condemning authority, by giving written notice to Lessee of
such election with thirty (30) days after receipt of notice of a taking by
condemnation of any part of the Premises or the Office Building Project. Any
award for the taking of all or any part of the Premises or the Office Building
Project under the power of eminent domain or any payment made under threat of
the exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any separate award for loss of or damage to Lessee's
trade fixtures, removable personal property and unamortized tenant
improvements that have been paid for by Lessee. For that purpose the cost of
such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by
reason of such condemnation. Lessor shall to the extent of severance damages
received by Lessor in connection with such condemnation, repair any damage to
the Premises caused by such condemnation except to the extent that Lessee has
been reimbursed thereof by the condemning authority.
15. BROKER'S FEE.
(a) The brokers involved in this transaction are CB Commercial as "listing
broker" licensed real estate broker(s). A "cooperating broker" is defined as
any broker other than the listing broker entitled to a share of any commission
arising under this Lease. Upon execution of this Lease by both parties, Lessor
shall pay to said brokers jointly, or in such separate shares as they may
mutually designate in writing, a fee as set forth in a separate agreement
between Lessor and said broker(s).
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not less
than ten (10) business days' prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party
a statement in writing (i) certifying that this Lease is unmodified and in
full force and effect (or if modified, stating the nature of such modification
and certifying that this Lease, as so modified, is in full force and effect)
and the date
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to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Office Building
Project or of the business of Lessee.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party,
(ii) there are no uncured defaults in the requesting party's performance, and
(iii) if Lessor is the requesting party, not more than one month's rent has
been paid in advance.
(c) If Lessor desires to finance, refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser; provided, however, that prior
to such delivery Lessee shall have received from Lessor, and such lender or
buyer, as applicable, a commercially reasonable confidential agreement
executed by such party or parties. Such statements shall include the past
three (3) years financial statements of Lessee. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and
shall be received by Lessor and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners at the time in question of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest. Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed,
provided that any funds in the hands of Lessor or the then grantor at the time
of such transfer, in which Lessee has an interest, shall be delivered to the
grantee. The obligations contained in this Lease to be performed by Lessor
shall, subject as aforesaid, be binding on Lessor's successors and assigns,
only during their respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of
any other provision hereof.
20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
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Expense increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS: AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No
prior or contemporaneous agreement or understanding pertaining to any such
matter shall be effective. This Lease may be modified in writing only, signed
by the parties in interest at the time of the modification. Except as
otherwise stated in this Lease, Lessee hereby acknowledges that neither the
real estate broker listed in paragraph 15 hereof nor any cooperating broker on
this transaction nor the Lessor or any employee or agents or any of said
persons has made any oral or written warranties or representations to Lessee
relative to the condition or use by Lessee of the Premises or the Office
Building Project and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable
laws and regulations in effect during the term of this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified or registered
mail. Mailed notices shall be deemed given upon actual receipt at the address
required, or forty-eight hours following deposit in the mail, postage prepaid,
whichever first occurs. Either party may by notice to the other specify a
different address. A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to such party or parties at
such addresses as Lessor may from time to time hereafter designate by notice
to Lessee.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof of any subsequent breach by Lessee of the
same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to rendered necessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder
by Lessor shall not be a waiver of any preceding breach by Lessee of any
provision hereof, other than the failure of Lessee to pay the particular rent
so accepted regardless of Lessor's knowledge of such preceding breach at the
time of acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of
this Lease for recording purposes.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.
29. BINDING EFFECT: CHOICE OF LAW. Subject to any provisions hereof
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restricting assignment or subletting by Lessee and subject to the provisions
of paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State where the Office Building Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Office Building Project is located.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted hereby,
at Lessor's option, shall be subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation or security now or hereafter placed upon
the Office Building Project and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations, replacements and
extensions thereof. Notwithstanding such subordination, Lessee's right to
quiet possession of the Premises in accordance with this Lease shall not be
disturbed if Lessee is not in default and so long as Lessee shall pay the rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. If any mortgagee, trustee or
ground lessor shall elect to have this Lease and any Options granted hereby
prior to the lien of its mortgage, deed of trust or ground lease, and shall
give written notice thereof to Lessee, this Lease and such Options shall be
deemed prior to such mortgage, deed of trust or ground lease, whether this
Lease or such Options are dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof.
(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted
herein prior to the lien of any mortgage, deed of trust or ground lease, as
the case may be. Lessee's failure to execute such documents within ten (10)
business days after written demand shall constitute a material default by
Lessee hereunder without further notice to Lessee or, at Lessor's option.
Lessor shall execute such documents on behalf of Lessee as Lessee's
attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint
Lessor as Lessee's attorney-in-fact and in Lessee's name, place and stead, to
execute such documents in accordance with this paragraph 30(b).
31. ATTORNEYS' FEES.
31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the
same or a separate suit, and whether or not such action is pursued to decision
or judgment. The provisions of this paragraph shall inure to the benefit of
the broker named herein who seeks to enforce a right hereunder.
31.2 The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys'
fees reasonably incurred in good faith.
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32. LESSOR'S ACCESS.
32.1 Lessor and Lessor's agents shall have the right to enter the Premises
at reasonable times on reasonable notice for the purpose of inspecting the
same, performing any service required of Lessor, showing the same to
prospective purchasers, lenders, or lessees, taking such safety measures,
erecting such scaffolding or other necessary structures, making such
alterations, repairs, improvements or additions to the Premises or to the
Office Building Project as Lessor may reasonably deem necessary or desirable
and the erecting, using and maintaining of utilities, services, pipes and
conduits through the Premises and/or other premises as long as there is no
unreasonable adverse effect to Lessee's use of or any decrease in the size of,
the Premises. Lessor may at any time place on or about the Building any
ordinary "For Sale" signs and Lessor may at any time during the last 120 days
of the term hereof place on or about the Building any ordinary "For Lease"
signs. Lessors shall minimize interfering with Lessee's use of the Premises in
the exercise of its rights under this Paragraph.
32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.
32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and
sales, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forceable or
unlawful entry or detainer of the Premises or an eviction. Lessee waives any
charges for damages or injuries or interference with Lessee's property or
business in connection therewith.
33.AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in
violation of this paragraph shall constitute a material default of this Lease.
34.SIGNS. Subject to Paragraph 63 of the Addendum, Lessee shall not place any
sign upon the Premises or the Office Building Project without Lessor's prior
written consent. Under no circumstances shall Lessee place a sign on any roof
of the Office Building Project.
35.MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to
Lessor of any or all of such subtenancies.
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36.CONSENTS. Except as otherwise provided herein, wherever in this Lease the
consent of one party is required to an act of the other party such consent
shall not be unreasonably withheld or delayed.
37.GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38.QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder. Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Office Building Project.
40.SECURITY MEASURES--LESSOR'S RESERVATIONS.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole
option, from providing security protection for the Office Building Project or
any part thereof, in which event the cost thereof shall be included within the
definition of Operating Expenses, as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or the title of the Office Building
Project or building in which the Premises are located upon not less than 90
days prior written notice;
(b) To provide and install Building standard graphics on the door of
such portions of the Common Areas as Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any business
as long as such exclusive does not conflict with any rights expressly given
herein;
(d) To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(b) Suffer or permit anyone, except in emergency, to go upon the roof
of the Building except as permitted by this Lease.
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41. EASEMENTS.
41.1 Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises or the Common Areas by Lessee. Lessee
shall sign any of the aforementioned documents (provided same shall create no
obligations or liability of Lessee) upon request of Lessor and failure to do
so shall constitute a material default of this Lease by Lessee without the
need for further notice to Lessee.
41.2 The temporary obstruction of Lessee's view, air, or light by any
structure erected in the vicinity of the Building by third parties, shall in
no way affect this Lease or impose any liability upon Lessor.
42.PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the
right on the part of said party to institute suit for recovery of such sum if
it shall be adjudged that there was no legal obligation on the part of said
party to pay such sum or any part thereof said party shall be entitled to
recover such sum or so much thereof as it was not legally required to pay
under the provisions of this Lease.
Initials:_____________
C 1984 American Industrial
Real Estate Association FULL SERVICE-GROSS
_____________
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43. AUTHORITY. If Lessee is a corporation, trust or general or limited
partnership, Lessee represents and warrants that such individual signing this
Lease is duly authorized to execute and deliver this Lease on behalf of said
entity if Lessee is a corporation trust or partnership. Lessee shall, within
thirty (30) days after execution of this Lease, deliver to Lessor evidence of
such authority satisfactory to Lessor.
44. CONFLICT. Any conflict between the printed provisions, Exhibits or
Addenda of this Lease and the typewritten or handwritten provisions, if any,
shall be controlled by the typewritten or handwritten provisions.
45. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when executed by
both parties.
46. LENDER MODIFICATION. Lessee agrees to make such reasonable modifications
to this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the Office
Building Project provided same shall not increase Lessee's obligations,
decrease Lessee's rights or remedies, increase Lessor's rights or remedies or
decrease Lessor's obligations.
47. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee, respectively.
48. WORK LETTER. This Lease is supplemented by that certain Work Letter of
even date executed by Lessor and Lessee, attached hereto as Exhibit C, and
incorporated herein by this reference.
49. ATTACHMENTS. Attached hereto are the following documents which constitute
a part of this Lease:
Addendum Paragraph 50 through 82
-- --
Exhibit "A" - Floor Plan
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Exhibit "B" - Site Plan
Exhibit "C" - Final Plans
Exhibit "D" - Notice of Lease Term Dates
Exhibit "E" - Rules and Regulations
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR
SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE
BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES
SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
LESSOR LESSEE
VALENCIA PARAGON ASSOCIATES, LTD., a UNISTAR COMMUNICATION GROUP, INC.,
California Limited Partnership a Delaware corporation
------------------------------------
----------------------------------------
By /s/ Jeremy B. Fletcher By /s/ William B. Lockett
----------------------------------
-------------------------------------
Jeremy B. Fletcher William B. Lockett
Its General Partner Its Sr. V.P. Administration
----------------------------
-----------------------------
By /s/ J.B. Allen By /s/ William J. Hogan
----------------------------------
-------------------------------------
Jeffrey B. Allen William J. Hogan
Its General Partner Its President
----------------------------
-----------------------------
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Executed at Executed at Unistar
--------------------------
-----------------------------
on on January 9, 1992
----------------------------------
--------------------------------------
Address Address 1675 Broadway New York, NY
10019
-----------------------------
---------------------------------
c 1984 American Industrial Real Estate Association
FULL SERVICE--GROSS
PAGE 10 OF 10 PAGES
For these forms write or call the American Industrial Real Estate
Association, 350 South Figueroa Street, Suite 275, Los Angeles CA 90071 (213)
687-8777 c 1984 -By American Industrial Real Estate Association All rights
reserved. No part of these words may be reproduced in any form without
permission in writing.
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ADDENDUM TO STANDARD OFFICE LEASE -
GROSS
THIS ADDENDUM TO STANDARD OFFICE LEASE - GROSS ("Addendum") is made and
entered into by and between VALENCIA PARAGON ASSOCIATES, LTD., a California
Limited Partnership ("Lessor"), and UNISTAR COMMUNICATIONS GROUP, INC., a
Delaware corporation ("Lessee"), as of the date set forth on the first page of
that certain Standard Office Lease - Gross (the "Lease") between Lessor and
Lessee to which this Addendum is attached and incorporated. The terms,
covenants and conditions set forth herein are intended to and shall have the
same force and effect as if set forth at length in the body of the Lease. To
the extent that the provisions of this Addendum are inconsistent with any
provisions of the Lease, the provisions of this Addendum shall supersede and
control.
50. Improvements by Lessor.
(a) Scope of Improvements. Lessor and Lessee hereby acknowledge and agree
that the Premises shall be constructed by Lessor on a "turn-key" basis, at
Lessor's expense (the "Lessee Improvements"), in accordance with the
procedures set forth herein.
(b) Space Plans and Final Plans. If the plans and specifications attached
hereto, if any, are the final plans for the Lessee Improvements, as approved
by Lessor in writing, such final plans and specifications shall be hereinafter
referred to as the "Final Plans" and the remainder of this Paragraph shall be
inoperative. Otherwise, Lessee shall cause Lessee's architect to prepare, at
Lessee's cost (which cost shall be reimbursed by Lessor up to a total of Three
Thousand Seven Hundred Eighty-Three and 48/100 Dollars ($3,783.48), a detailed
space plan sufficient to convey the architectural design of the Premises,
including without limitation, the location of doors, partitions, electrical
and telephone outlets, plumbing fixtures, heavy floor loads and other special
requirements, together with reflective ceiling plans ("Lessee's Space Plans").
If Lessor shall disapprove of any portion of Lessee's Space Plans, Lessor
shall advise Lessee of those revisions, and the reasons therefor, reasonably
required by Lessor. Lessee shall then submit to Lessor, for Lessor's
approval, a redesign of Lessee's Space Plans, incorporating the revisions
required by Lessor, as modified by Lessee, which modifications must be
approved by Lessor. Based upon such approved Lessee's Space Plans, Lessor at
its cost shall prepare specifications and working drawings for the
construction of any Lessee Improvements (the "Final Plans"). Thereafter,
Lessor shall deliver the Final Plans to Lessee, and within six (6) business
days after Lessee's receipt thereof, Lessee shall notify Lessor in writing of
either Lessee's approval or disapproval thereof, including any corrections or
changes required by Lessee to the Final Plans. Lessor shall cause Lessor's
architect to prepare and deliver to Lessee, at Lessor's cost, revised Final
Plans which incorporate Lessee's proposed changes, provided such proposed
changes (i) are reasonable, and (ii) are made in good-faith and with
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particularity and precision. In the event Lessor does not receive written
notice from Lessee for any requested changes to the Final Plans within the
time period specified herein, the Final Plans shall be conclusively deemed
approved by Lessee.
(c) Procedure for Construction of Lessee Improvements.
Following final approval of the Final Plans, Lesser shall rely upon the Final
Plans and use Lessor's commercially reasonable efforts to complete the Lessee
Improvements described in the Final Plans prior to March 15, 1992.
Notwithstanding anything to the contrary set forth in this Lease, the
"Commencement Date" shall be the later of March 15, 1992 or the date which is
three (3) days following Lessor's notice to Lessee that the Lessee
Improvements have been "substantially completed" (as defined below) and Lessor
tenders possession of the Premises to Lessee. The Term of this Lease shall
expire on the last day of the month in which occurs the tenth (10th)
anniversary of the Commencement Date (the "Expiration Date"). For the
purposes of this Paragraph only, the Lessee Improvements shall be conclusively
deemed "substantially completed" when all Lessee Improvements described in the
Final Plans are completed as certified by Lessor's architect, except for minor
items (e.g., "punch-list" items) which can be completed by Lessor after the
Commencement Date of the Term with only minor interference with the conduct of
Lessee's business in the Premises. In the event that Lessor has not
substantially completed the Lessee Improvements by the "Outside Date", which
shall br March 15, 1992, as such date may be extended by the number of days of
Force Majeure delays (as defined below) (up to a maximum of sixty (60) days of
Force Majeure Delays) or Lessee Delays, which number(s) shall be disclosed to
Lessee in a written notice from Lessor's contractor promptly upon learning of
the delay, then Lessee shall be entitled to receive one additonal day of free
Base Rent for every day that the Lessee Improvements are not substantially
completed thereafter, and furthur, if the Lessee Improvements are not
substantially completed by the "Outside Date", as such date is extended by the
number of days of Force Majeure Delays and/or Lessee Delays, then the sole
remedy of Lessee shall be the right to deliver a notice to the Lessor (the
"Termination Notice") electing to terminate this Lease effective upon receipt
of the Termination Notice by Lessor (the "Effective Date"). Except as
provided herein below, the Termination Notice must be delivered by Lessee to
Lessor, if at all, not earlier than the Outside Date , as extended, and not
later than ten (10) business days after the Outside Date, as extended, and
upon the effective termination of this Lease any money paid by Lessee to
Lessor with respect to this Lease shall be refunded to Lessee. If Lessee
elects not to terminate this Lease, as set forth above (i) Lessor shall
continue to construct the Lessee Improvements to completion, (ii) Lessee shall
be entitled to receive the Base Rent abatement set forth above in this
Paragraph 50(c) and (iii) if the Lessee Improvements are not substantially
completed by the forty-fifth (45th) day following the Outside Date as
extended, Lessee shall again have the right to terminate this Lease within ten
(10) business days following that forty-fifth (45th) day.
"Force Majeure Delays" shall mean and refer to a period of delay or delays
encountered by Lessor affecting the work of construction of the Lessee
Improvements because of delays due to excess time in obtaining governmental
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permits or approvals beyond the time period normally required to obtain such
permits or approvals for similar space similarly improved in comparable
buildings (if not caused by Lessor's act or failure to act); fire, earthquake
or other acts of God; acts of public enemy; riot; insurrection; governmental
regulations of the sales of materials and supplies or the transportation
therof; strikes or boycotts; shortages of material or labor or any other cause
beyond a reasonable control of Lessor.
(d) Changes. If Lessee requests any change, addition or alteration to the
Final Plans or in Lessor's construction and completion of the Lessee
Improvements ("Changes"), Lessor shall promptly give Lessee an estimate of the
cost of such Changes and the resulting delay (if any) in the delivery of the
Premises to Lessee. Within three (3) business days after Lessee's receipt of
such written estimate from Lessor, Lessee shall give Lessor written notice
indicating whether or not Lessee elects to proceed with any such Changes. If
Lessee elects to proceed with such Changes Lessor shall, at Lessee's sole cost
and expense, promptly make such Changes. If Lessee elects not to proceed with
such Changes or fails to timely notify Lessor of Lessee's election within such
three (3) business day period, Lessor shall complete the Lessee Improvements
in the Premises without making such Changes. Any delay caused by Lessee's
request for such Changes or the construction of such Changes, shall not, in
any event, delay the Commencement Date, which shall occur on the date it would
have occurred but for such Changes.
(e) Unavoidable Delays. If the performance by Lessor of any act required
herein or elsewhere in the Lease is prevented or delayed by reason of strikes,
lockouts, labor disputes, governmental delays, acts of God, fire, floods,
earthquake, epidemics, freight embargoes; unavailability of materials and
supplies, development moratoriums imposed by any governmental authority, or
any other cause beyond the reasonable control of Lessor (including any "Lessee
Delay" (as hereinafter defined)), Lessor shall be excused from performance for
the time period equal to the time period of the prevention or delay.
(f) Lessee Delays. To the extent that the Commencement Date has not occurred
because Lessor was delayed in substantially completing the Lessee Improvements
as a result of the following (collectively, "Lessee Delays"):
(i) Lessee's failure to complete any action item on or before the
due date which is the responsibility of Lessee to complete, or
(ii) Lessee's request for Changes or the construction of such Changes
by Lessor, or
(iii) Lessee's untimely request for materials, finishes, or
installations requiring long lead times, or
(iv) Any delay by Lessee in making any payment(s) to Lessor, or
(v) Any act or failure to act by Lessee, Lessee's employees, agents,
architects, independent contractors, consultants and/or any other person
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performing or required to perform services on behalf of Lessee, then as soon
as reasonably possible following the Commencement Date, Lessor shall deliver
to Lessee a reasonably detailed statement of the net number of days of Lessee
Delays, determined on a critical path basis, and Lessee shall pay to Lessor,
as additional rent under the Lease, the product of the per diem monthly rent
payable by Lessee for the Premises multiplied by the number of days that such
Lessee Delays caused the Commencement Date to be delayed, such payment to be
made to Lessor within thirty (30) days after Lessee's receipt of Lessor's
written demand therefor.
(g) Schedule for Improvements.
Action Responsibility Due Date
(i) Submission of Lessee's Lessee 10/24/91
Space Plans to Lessor
(ii) Delivery of written notice Lessor
10/31/91
approving or disapproving
Lessee's Space Plans
(iii) Submission of Final Plans Lessor 11/29/91
to Lessee
(iv) Delivery of written notice Lessee 12/1/91
approving or disapproving
Final Plans
(v) Commencement of construction Lessor 1/15/92
(vi) Substantial completion of Lessor 3/15/92
Lessee Improvements and
obtaining temporary
Certificate of Occupancy
for Premises
(h) Access. Lessor agrees that prior to substantial completion of the Lessee
Improvements, if any portion of the Premises may be entered by Lessee or
Lessee's employees without interfering with Lessor's work of construction of
the Lessee Improvements, then Lessee shall be entitled reasonable access to
such portion of the Premises in order to install Lessee's furniture, fixtures,
equipment and personal property for use in the Premises ("Lessee's Fixturizing
Work"). Such access by Lessee and Lessee's Fixturizing Work shall be subject
to all the following terms and conditions:
(i) Lessee and Lessee's employees shall be subject to and shall work
under the rules and direction of Lessor and Lessor's general contractor. If
in the reasonable judgment of Lessor or Lessor's general contractor such
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access or work shall or may interfere with construction of the Lessee
Improvements, detrimentally affect Lessor's ability to comply with its
commitments for substantially completing the Lessee Improvements, or cause
labor difficulties, Lessor and/or Lessor's general contractor shall have the
right to order any or all Lessee's Fixturizing Work to cease upon twenty-four
(24) hours notice, and Lessee shall immediately comply with such order, and if
necessary, remove from the Premises all of its tools, equipment and materials.
(ii) Lessee shall: (A) furnish Lessor with sufficient evidence that
Lessee and its contractors are carrying workmen's compensation insurance in
statutory required amounts, together with general liability insurance naming
Lessor, Lessor's lender and managing agent as additional insureds, in
accordance with the Lease; (B) comply with all applicable laws, regulations,
permits and other approvals applicable to such access and Lessee's Fixturizing
Work; and (C) not interfere with or delay in any manner the construction of
the Lessee Improvements. Lessee shall not be required to pay rent to Lessor
by reason of lessees access or Lessens Fixturizing Work pursuant to this
Subparagraph 51(h)
(iii) Lessee indemnifies and agrees to protects defend and hold
Lessor, its constituent partners, and their respective agents, Officers and
employees, harmless from and against any and all losses, costs, liabilities,
damages, demands, claims, causes of action and expenses (including attorneys
fees and court costs) by reason of damage to the Project, Building, Premises
or the property of others Indoor personal injury, including death, which may
arise from Lessee's access and Lessee's fixturizing Work pursuant to this
Subparagraph 50(h), whether caused by Lessee, Lessee's contractor or any
subcontractor, or anyone directly or indirectly employed by any of them. The
provisions of Paragraphs 8.7 of the Lease and Addendum Paragraph 70 regarding
indemnification are expressly incorporated herein by this reference.
(i) Cleaning. Lessor agrees to thoroughly clean, as necessary, the Premises
before and immediately after Lessee's move into the Premises.
(j) Notice of Lease Term Dates. Once the actual Commencement Date is
determined, the parties shall execute a Notice of Lease Term Dates setting
forth such date in the form shown in Exibit "D".
(k) Deposit for Tennant Improvements. Notwithstanding anything to the
contrary set forth in this Lease, upon execution hereof, Lessee shall deposit
Two Hundred Twenty Thousand and No/100 Dollars ($220,000.00) ("Initial Tenant
Improvement Deposit") in cash into an escrow account ("Escrow Account") with
an escrow agent ("Escrow Agent") and pursuant to an escrow agreement mutually
acceptable to Lessor and Lessee, which Initial Tenant Improvement Deposit
amount is an estimate of the cost to be incurred by Lessor for construction of
the Tenant Improvements, and related occupancy costs, through and including
January 31, 1992. If, and only if, Lessee and that certain banking group
headed by Chase Manhattan Bank, N.A. ("Bank Group"), with which Lessee is
currently negotiating a restructuring of Lessee's debt, have not executed an
agreement evidencing such restructuring (the "Restructuring Agreement") on or
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before February 1, 1992, Lessee shall deposit in the Escrow Account commencing
February 1, 1992, and every fourteen (14) days thereafter, an amount equal to
one-half (1/2) of the estimated costs to be incurred by Lessor in construction
of the Tenant Improvements, as reasonably determined by Lessor and
communicated to Lessee in writing, for the fourteen (14) day period
immediately following the applicable deposit date (collectively, "Secondary
Tenant Improvement Deposit"); provided that in no event shall the Secondary
Tenant Deposit exceed the aggregate amount of $259,205.00. The Initial Tenant
Improvement Deposit and the Secondary Tenant Improvement Deposit shall
hereinafter be referred to as the "Total Tenant Improvement Deposit". In the
event Lessee and the Bank Group execute the Restructuring Agreement on or
before March 31, 1992, then, in such event, Lessor and Lessee shall each
deliver written instructions to the Escrow Agent directing the Escrow Agent to
release the Total Tenant Improvement Deposit to Lessee. In the event,
however, that the Restructuring Agreement is not mutually executed on or
before March 31, 1992, Lessor and Lessee shall deliver written instructions to
the Escrow Holder directing the Escrow Holder to release the Total Tenant
Improvement Deposit to Lessor, and Lessor shall thereafter hold the Total
Tenant Improvement Deposit as security for Lessee's timely performance of its
obligations under this Lease until such time as Lessor receives written notice
from Lessee and confirmation from the Bank Group that the Restructuring
Agreement has been executed by Lessee and the Bank Group. Within three (3)
business days following receipt of such notice, Lessor shall deliver to Lessee
the Total Tenant Improvement Deposit, including any interest accrued thereon,
to Lessee; provided, however, if at any time during the then remaining Term
Lessee defaults under the Restructuring Agreement, whether material or
otherwise, Lessee shall deliver to Lessor written notice of such default
within three (3) business days of the date of the default, and shall deliver
to Lessor within seven (7) additional business days an amount equal to six (6)
times the then current monthly Base Rent due under this Lease, which amount
shall be held by Lessor as security for Lessee's timely performance of its
obligations under this Lease until such time as Lessor receives written notice
from the Bank Group (or an agent of the Bank Group) that said default has been
cured or waived, at which time Lessor shall, within ten (10) business days of
such notice, return such amount to Lessee. The failure of Lessee to perform
any of its obligations under this Paragraph 50(k) shall constitute a material
default under this Lease.
51. Abatement of Base Rent. Notwithstanding anything to the contrary set
forth in Paragraph 1 of this Lease, and provided that Lessee has performed all
of the terms and conditions of this Lease, following the giving of any
required notice and the expiration of the applicable cure period, Lessor
hereby agrees to abate Lessee's obligation to pay Base Rent for months two
(2), three (3), four (4), five (5), six (6), seven (7), eight (8), and nine
(9) of the Term. Lessee shall still be responsible for the payment of all
other amounts payable by Lessee under this Lease. In the event of a default
by Lessee pursuant to the terms of this Lease, and Landlord's subsequent
termination of this Lease, as part of the recovery permitted by Lessee, Lessor
shall be entitled to recover the Base Rent which is abated hereunder.
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52. Parking. Notwithstanding anything to the contrary set forth in
Paragraph 2.2 of the Lease, in addition to the space allocated to Lessee,
Lessee may be entitled to use, during the Term, the parking areas associated
with the Premises for parking by Lessee, and Lessee's employees, visitors and
customers, subject to any rules and regulations promulgated by or parking fees
charged by Lessor (which fees for Lessee shall be free during the initial term
of this Lease), as the same may be established from time to time. All
responsibility for damage and theft to vehicles is assumed by Lessee and
Lessee's employees, visitors and customers. Lessee shall repair or cause to be
repaired, at Lessee's sole cost and expense, any and all damage to the
Building and the Office Building Project caused by Lessee's, or Lessee's
employees', visitors', or customers' use of such parking areas therein.
53. Base Rent Increase. Notwithstanding anything to the contrary set forth
in Paragraphs 1.6 and 1.7 of the Lease and commencing and effective upon the
first day of the sixtieth (60th) month after the Commencement Date (the "Rent
Adjustment Date") the Base Rent payable by Lessee to Lessor (in accordance
with Paragraph 4.1 of the Lease) shall be adjusted to $52,294.00 per month
(i.e.,$1.6586 per rentable square foot on the Premises).
54. Operating Expenses. Notwithstanding anything to the contrary set forth
in the Lease:
(a) Lessee shall pay Lessee's Share of the Operating Expense Increase for
each calendar year of the Term (as estimated by Lessor); provided, however,
that Lessee's Share of Operating Expense Increase shall not increase by more
than thirteen percent (13%), cumulative and compounded, from year to year.
Lessor shall notify Lessee of such estimate at the outset of each calendar
year of the Term, and such estimate shall be payable by Lessee in monthly
installments concurrently with Lessee's monthly payments of Base Rent (in
accordance with the Lease). Lessor may increase such estimate (not more often
than once in any given year of the Term), in good-faith, and Lessee shall pay
the difference between what Lessee would have paid had such estimate been in
effect from the outset of such calendar year and what Lessee actually paid,
and Lessee's subsequent monthly installments of such payments shall likewise
be adjusted to reflect such increase. Following the end of each calendar year
of the Term, Lessor shall determine and notify Lessee in writing of the actual
Operating Expenses incurred by Lessor for the Building and for the Office
Building Project. If the actual Operating Expenses exceed the estimated
expenses, Lessee shall pay the difference to Lessor concurrent with Lessee's
next monthly installment of Base Rent. If the estimated expenses exceed the
actual Operating Expenses, Lessor shall credit the difference against Lessee's
next monthly installment of Rent. Lessor's failure to notify Lessee of
Lessee's estimate of the Operating Expenses prior to the Commencement Date of
the Term or prior to the commencement of any calendar year of the Term, shall
not foreclose Lessor from collecting, following such notification, those
estimated Operating Expenses, which expenses (or balance) shall be due
concurrently with Lessee's next monthly installment of rent; provided,
however, that if Lessor fails to notify Lessee of Lessee's estimated Operating
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Expenses for the upcoming calendar year, Lessee shall continue to pay such
Operating Expenses in effect for the prior calendar year until such time as
Lessee is notified in writing of Lessor's estimate for the then-current
calendar year. Operating Expenses for a partial month shall be prorated based
on a three hundred sixty (360) day calendar year.
(b) "Operating Expenses" shall be defined to include all expenses set forth
in Paragraph 4.2(d) of the Lease and all reasonable expenses incurred by
Lessor in operating, maintaining and repairing the Building and the Office
Building Project, as determined by standard accounting practices, including,
but not limited to: rent taxes, gross receipts taxes (whether assessed
against Lessor or assessed against Lessee and paid by Lessor, or both); water
and sewer charges; the cost of janitorial services, security and labor;
surcharges or any other costs levied, assessed or imposed by, or at the
direction of, or resulting from statutes or regulations promulgated by any
federal, state or local governmental authority in connection with the use or
occupancy of the Building or the Office Building Project; the cost (amortized
over the reasonably anticipated useful life of the asset, together with
interest at the prevailing prime rate plus two percent (2%) on the unamortized
balance) of (i) any capital improvements made to the Building or the Office
Building Project by Lessor to the extent such capital improvements reduce
Operating Expenses or which are made to the Building or the Office Building
Project by Lessor after the commencement date of the Term as required pursuant
to any law or regulation that was not applicable at the time they were
constructed, or (ii) replacement of any equipment needed to operate the
Building at a consistent level or quality, but only in the event that such
equipment (A) is malfunctioning or non-functioning and the repair of such
equipment would not be economically feasible when compared to the cost of
replacement, or (B) is otherwise due for replacement in the ordinary course of
its reasonably anticipated useful life; costs incurred in the management of
the Building or the Office Building Project, if any, including a fair market
management fee, supplies, wages and salaries of employees used in the
management, operation and maintenance of the Building and the Office Building
Project, and payroll taxes and similar governmental charges with respect
thereto; the cost of air-conditioning, waste disposal, heating and
ventilating; the cost of elevator maintenance, supplies, materials, equipment
and tools; the reasonable costs of repair and maintenance of the Building and
the Office Building Project, including payroll expenses and rental of personal
property used in connection therewith; reasonable costs of gardening and
landscaping; reasonable costs of maintaining signs; personal property taxes
levied on or attributable to personal property used in connection with the
operation, maintenance and repair of the Building or the Office Building
Project; reasonable audit or verification fees; and the costs of lighting,
cleaning, refuse removal and similar items, including appropriate reserves, of
the Building and the Office Building Project. Operating Expenses shall not
include depreciation on the Building or the Office Building Project or any
equipment therein, Lessor's executives' salaries or any real estate brokers
commissions, legal fees, judgments, financing expenses, debt service or ground
rent. Furthermore, real property taxes shall not include increases in real
property taxes attributable to the sale, refinance or other transfer of
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ownership of the Building prior to the second (2nd) anniversary of the
Commencement Date.
(c) Notwithstanding the foregoing, the following shall not be included in
Operating Expenses:
(i) Costs associated with the operation of the business of the
ownership or entity which constitutes "Lessor", as distinguished from the
costs of building operations, including, but not limited to partnership,
accounting and legal matter, costs of defending any lawsuit with mortgagee
(except as the actions of Lessee may be an issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of Lessor's interest
in the Building, costs of any disputes between Lessor and its employees (if
any) not engaged in Office Building Project, disputes of Landlord with
Building management, or outside fees paid in connection with disputes with
other tenants;
(ii) Costs incurred in connection with the original construction of
the Office Building Project, or in connection with any major change in the
Office Building Project, including but not limited to the addition or deletion
of floors;
(iii) Costs of alterations or improvements to the Premises or the
Premises or other tenants;
(iv) Depreciation, interest and principal payments on mortgages, and
other debts, if any;
(v) Expenses directly resulting from the negligence of Lessor, its
agent, servants or employees, legal fees, space planner's fees, real estate
broker's leasing commissions and advertising expenses incurred in connection
with the original development or original leasing of the Office Building
Project, or future leasing of the Office Building Project;
(vi) Costs for which Lessor is reimbursed by
its insurance carrier or any tenant's insurance carrier;
(vii) Any bad debt loss, rent loss or reserves for bad debts or rent
loss;
(viii) The expenses of extraordinary services provided to other
tenants in the Office Building Project;
(ix) Amounts paid as ground rental by Lessor;
(x) Any Operating Costs in connection with the ground floor and the
mezzanine levels, or any other floor in the Building devoted to any retail
operating;
(xi) Costs incurred by Lessor with respect to goods and services
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(including utilities and sold and supplied to tenants and occupants of the
Office Building Project) to the extent that Lessor is reimbursed for such
costs.
(xii) Costs, including permits, license and inspection costs,
incurred with respect to the installation of tenant improvements made for new
tenants in the building or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Office Building Project.
(xiii) Expenses in connection with services or other benefits which
are not provided to Lessee or for which Lessee is charged directly but which
are provided to another tenant or occupant of the Office Building Project.
(xiv) Overhead and profit increment paid to Lessor or to subsidiaries
or affiliates of Lessor for services in the Office Building Project to the
extent the same exceeds the costs of such services rendered by unaffiliated
third parties on a competitive basis.
(xv) Rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment ordinarily considered to be
part of a capital nature, except equipment not affixed to any building in the
Office Building Project which is used in providing janitorial or similar
services.
(xvi) All items and services for which Lessee or any other tenant in
the Office Building Project reimburses Lessor or which Lessor provides
selectively to one or more tenants (other than Lessee) without reimbursement.
(xvii) Electric power costs for which any tenant directly contracts
with the local public service company.
(xviii) Legal fees, space planner's fees, real estate broker's leasing
commissions and advertising expenses incurred in connection with the original
development or original leasing of the Office Building Project or future
leasing of the Office Building Project.
(xix) Capital expenditures required by Lessor's failure to comply
with laws enacted on or before the date the Building's temporary certificate
of occupancy is validly issued.
(xx) Expenses in connection with third party landlord/tenant disputes
in the Office Building Project.
(xxi) Fines, penalties or interest charges within the reasonable
control of Lessor.
(xxii) All capital expenses other than as expressly included in
Operating Expenses pursuant to the terms of this Lease.
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It is understood that Operating Costs shall be adjusted for 95% occupancy in
the Base Year and each Comparison Year, and shall be reduced by all cash
discounts, trade discounts or quantity discounts received by Lessor or
Lessor's managing agent in the purchase of any goods, utilities or services in
connection with the operation of the Office Building Project. Lessor shall
make payments for goods, utilities or services in connection with the
operation of the Office Building Project. Lessor shall make payments for
goods, utilities and services in a timely manner to obtain the maximum
possible discount. If Capital items which are customarily purchased by Lessee
of first class office buildings in Los Angeles County are leased, rather than
purchased by Lessor the decision by Lessor to lease the item in question shall
not serve to increase Lessee's proportionate share of Operating costs beyond
that which would have applied had the item in question been purchased. In the
calculation of any expense hereunder it is understood that no expense shall be
charged more than once. Lessor shall use its best efforts to effect an
equitable proration of bills for services rendered to the Office Building
Project and to any other property owned by Lessor. Lessor agrees to keep
books and records showing the Operating Costs in accordance with a systems of
accounts and accounting practices consistently maintained on a year to year
basis.
(d) In the event Lessee shall dispute the amount set forth on any statement,
Lessee shall have the right, by providing notice not later than ninety (90)
days following receipt of such statement and commencing such audit within 180
days after receipt of such statement, to cause Lessor's books and records with
respect to the preceding calendar year to be audited by a certified public
accountant mutually acceptable to Lessor and Lessee.
(e) Notwithstanding anything to the contrary set forth in the Lease, because
of Lessee's seven days per week, twenty-four hours per day operations in the
Premises, the amount payable by Lessee for utilities and other services
pursuant to Paragraph ll of the Lease shall be determined as follows:
(i) Since (A) the Tenant on the second (2nd) floor of the Building
has a normal business installation and uses its premises only during normal
business hours (8:00 a.m. to 6:00 p.m., Monday through Friday) and (B) the
Building will, other than for that Tenant, be vacant during the period of
January l, 1992 through March 1, 1992, the utility usage during that period,
as measured by the utility meters for the Building, shall be determined and
divided by the rentable square feet occupied by such second (2nd) floor tenant
to determine normal hours utility usage per square foot (Per Foot Rate").
(ii) For each month of the Term, Lessee shall pay to Lessor, pursuant
to Paragraph 11 of the Lease, the costs of all such utilities and services
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attributable to the Building which are in excess of the product of the total
square footage of the Building multiplied by the Per Foot Rate. Lessor
acknowledges and agrees that any utility or service charges paid for by Lessee
pursuant to the terms of this Paragraph 54(e) shall be excluded from the
definition of Operating Expenses payable by Lessee pursuant to Paragraph 54(a)
of this Addendum.
(iii) If in any year during the Term, the nature of other occupants
of the Building changes so that the utilities or services included within the
Per Foot Rate concept described above are used beyond normal business hours or
for other than a normal office installation by any other occupant of the
Building, or the rates charged for such utilities or services change from the
rates reflected in the Per Foot Rate, then prior to Lessee's continuation of
its payment for utilities and services in accordance with this Paragraph 54,
Lessor and Lessee shall agree on a reasonable adjustment to the procedure for
calculating Lessee's obligations with respect to such utility and service
charges in order to take into account such extra usage or rate changes. Such
adjustment shall be determined in accordance with generally accepted
accounting principles.
(f) Notwithstanding anything to the contrary set forth in this Lease, Lessor
shall use its good faith efforts, in accordance with generally accepted
accounting principles, to allocate the costs of over-standard Operating
Expenses directly to third-party tenants of the Office Building Project, when
such over-standard usage, in Lessor's reasonable judgment, is attributable to
such third-party tenants.
55. Lessee's Environmental Compliance. Notwithstanding anything to the
contrary set forth in Paragraph 6.1 of the Lease, Lessee hereby agrees to use
the Premises in accordance with the following:
(a) "Hazardous Materials" shall mean any substance, material, waste, gas or
particulate matter which is regulated by any local, state or federal
authority, including, but not limited to, petroleum; radioactive material; any
material or substance designated or defined as a 'Hazardous Substance", "Toxic
Substance" or "Hazardous Waste" in Section 25117 of the Health and Safety Code
of the State of California, or under any successor or other provision of
California law, Section 311 of the Clean Water Act (33 U.S.C., Section 1251 et
seq.), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Resource Conservation and Recovery Act of 1976, the Hazardous
Materials Transportation Act, and all other laws and ordinances governing
similar matters now or hereinafter enacted, or any regulations adopted or
publications promulgated pursuant thereto (hereinafter collectively referred
to as the "Regulations")."Hazardous Materials Activities" shall mean the use,
generation, storage, disposal and/or transportation of Hazardous Materials by
Lessee, or Lessee's employees, agents, contractors, licensees or invitees.
(b) Lessee shall not conduct or cause to be conducted any Hazardous Materials
Activities on, under or about the Premises without receiving Lessor's prior
written consent, which consent Lessor may withhold in Lessor's sole and
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absolute discretion or revoke at any time. If Lessor consents to any such
Hazardous Materials Activities, Lessee shall conduct such Hazardous Materials
Activities in strict compliance (at Lessee's sole cost and expense) with all
applicable Regulations, using all necessary and appropriate precautions.
(c) Lessee shall indemnify, protect and defend Lessor, with counsel
acceptable to Lessor, against and hold Lessor harmless from any claims,
damages, costs and liability (including actual attorneys' fees and costs, and
court costs) arising out of any Hazardous Materials Activities. Lessor and
Lessor's representatives and employees may enter the Premises, at any time,
during the Term in order to inspect Lessee's compliance herewith. The
foregoing indemnification of Lessor shall survive the expiration or any
earlier termination of the Lease.
(d) Lessor hereby represents that Lessor does not know of, nor does Lessor
have reasonable cause to believe, that any release of Hazardous Materials has
come to be located on or beneath the Premises, Building, or Office building
Project.
56. Maintenance. Repair and Alterations.
(a) Notwithstanding anything to the contrary set forth in Paragraph 7.2 of
the Lease, all repair and maintenance of the Premises required by Lessee under
the Lease shall be paid for solely by Lessee and shall be performed by
contractors and other personnel approved by Lessor, and all costs and expenses
incurred by Lessor for Lessor's performance of any of Lessee's obligations
hereunder shall constitute "additional rent" under the Lease, payable by
Lessee in accordance with Paragraph 7.2(b) of the Lease.
(b) Notwithstanding anything to the contrary set forth in Paragraph 7.1 of
the Lease, Lessor shall be responsible for the maintenance and repair of the
foundation, exterior walls, roof structure and other structural portions of
the Building. The costs of such maintenance and repair by Lessor (except as
the result of any negligence or willful misconduct of Lessee, for which Lessee
shall assume all costs) shall be included within the definition of Operating
Expenses. Lessee shall not be entitled to any abatement of rent (except as
otherwise provided herein) as the result of Lessor's performance of such
maintenance and repair, and Lessee hereby waives any right to make repairs at
Lessor's expense under any law, statute or ordinance now or hereafter in
effect.
(c) In the event that Lessee fails to obtain and maintain any insurance
required under the Lease for any reason whatsoever, Lessee shall be
conclusively deemed to have self-insured such insurance obligations with the
full waiver of subrogation set forth in the Lease.
57. Damage and Destruction. Notwithstanding anything to the contrary set
forth in Paragraph 9 of the Lease, Lessee hereby waives the provisions of
California Civil Code Sections 1932 and 1933, and any successor sections and
any other statutes which are inconsistent with the provisions of the Lease and
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which relate to the termination of leases when leased property is destroyed,
and agree that such event shall be governed by the terms of the Lease.
58. Assignment and Subletting
(a) In connection with any proposed assignment of the Lease or sublease of
all or any portion of the Premises Lessee shall deliver to Lessor, for
Lessor's review and written approval, all such information concerning the
proposed assignee or sublessee as Lessor may reasonably require or request,
including, but not limited to, any financial statements or other financial
information and all terms of the proposed assignment or sublease.
(b) Notwithstanding anything to the contrary set forth in Paragraph 12.4 of
the Lease, Lessor may collect any rent and other consideration received from
an assignee or sublessee and apply same toward Lessee's obligations under the
Lease; provided, however, that until a default shall occur in the performance
of Lessee's obligations under the Lease, Lessee may receive and collect such
rent and other consideration accruing under any assignment or sublease. Lessee
hereby irrevocably authorizes and directs any assignee or sublessee, upon
receipt of written notice from Lessor stating that a default exists in the
performance of Lessee's obligations under the Lease, to pay to Lessor the rent
due and to become due under the assignment or sublease. Lessee agrees that
any assignee or sublessee shall have the right to rely upon any such written
notice from Lessor, and that such assignee or sublessee shall pay such rent to
Lessor without any obligation or right to inquire as to whether a default
exists, and notwithstanding any notice from or claim from Lessee to the
contrary, Lessee shall have no right or claim against such assignee or
sublessee or Lessor for any rent and other consideration so paid by such
assignee or sublessee to Lessor.
59. Brokers. Lessee warrants and represents that Lessee has not dealt with
any real estate broker or agent in connection with the Lease or its
negotiation, except for the brokers identified in Paragraph 15 of the Lease
(if any). Lessee shall indemnify and hold Lessor and the Premises harmless
from and against any and all costs, expenses and liability (including actual
attorneys' fees and court costs) for any compensation, commission or fees
claimed by any other real estate broker or agent in annection with the Lease
or its negotiation based upon any act Lessee. Lessor warrants and
represents to Lessee that Lessor has not dealt with any real estate broker or
agent in connection with the Lease or its negotiation, except for the brokers
identified in Paragraph 15 of the Lease (if any). Lessor shall indemnify and
hold Lessee harmless from and against any and all costs, expenses and
liability (including actual attorneys' fees and court costs) for any
compensation, commission or fees claimed by any other real estate broker or
agent in connection with the Lease or its negotiation based upon any act of
Lessor.
60. Limitation on Liability. Notwithstanding anything to the contrary set
forth in the Lease, the obligations of Lessor, and Lessor's partners (either
general or limited), directors, officers and shareholders, under the Lease do
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not constitute personal obligations. Lessee, and Lessee's successors and
assigns, hereby agree not to seek recourse against the personal assets of
Lessor, or Lessor's partners (either general or limited), directors, officers
and shareholders, for satisfaction of any actual or alleged liability of
Lessor to Lessee under the Lease, but Lessee shall look only to Lessor's
interest in the Building for the satisfaction of any liability of Lessor to
Lessee hereunder.
61. Notices. Copies of all notices or any other documents required to be
delivered to either Lessor or Lessee, or both, pursuant to the terms of the
Lease (including any changes to the addresses of either Lessor or Lessee),
shall be delivered to the parties, in accordance with Paragraph 23 of the
Lease, at the following addresses:
If to Lessee: 1675 Broadway
New York, NY 10010
Attn: Mr. Charles Persing
with a copy to: Morgan, Lewis & Bockius
101 Park Avenue
New York, NY 10178
Attn: Mitchell N. Baron, Esq.
If to Lessor: The Paragon Group
523 West Sixth Street, Suite 515
Los Angeles, California 90014
Attn: Mr. Jeremy Fletcher
with a copy to: Allen, Matkins, Leck, Gamble
and Mallory
515 South Figueroa Street, 8th Floor
Los Angeles, California 90071
Attn: Matthew W. Koart, Esq.
62. Holding Over. If Lessee fails to surrender the Premises upon the
expiration or earlier termination of the Term without the express written
consent of Lessor, Lessee shall become a tenant-at-sufferance at a rental rate
equal to one hundred fifty percent (150%) of the monthly Rent payable by
Lessee for the month immediately preceding such expiration or earlier
termination, and Lessee shall remain responsible for the payment of all other
monetary obligations due and payable by Lessee under the Lease. Acceptance by
Lessor of Rent after such expiration or earlier termination of the Term shall
not result in any renewal of the Term. The foregoing provisions are in
addition to and do not affect Lessor's right of re-entry or any other rights
or remedies of Lessor hereunder or as otherwise provided at law or in equity,
or both. If Lessee fails to surrender the Premises upon the expiration or
earlier termination of the Term despite Lessor's demand to do so, Lessee shall
indemnify and hold Lessor harmless from and against any and all losses, costs,
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damages and liability (including actual attorneys' fees and costs, and court
costs), direct or indirect, which Lessor may suffer as a result of Lessee's
failure to surrender the Premises.
63. Signage.
(a) Lessee shall have the right to install identification signage on the
parapet near the front of the Building, the exact location of which shall be
mutually agreed upon by Lessor and Lessee, which signage shall comply with all
applicable recorded covenants, conditions and restrictions, and all federal,
state and local laws, zoning regulations, permits, approvals and other
limitations affecting the Building and/or the Office Building Project. All of
Lessee's signage shall be installed and maintained, at Lessee's sole cost and
expense, pursuant to an installation and maintenance program approved and
supervised by Lessor. At the expiration or earlier termination of the Lease,
Lessee shall, at Lessee's sole cost and expense, cause such signage to be
removed from the Premises and/or the Building, and the Premises and/or the
Building to be restored to the condition existing prior to Lessee's placement
of such signage. If Lessee fails to remove such signage and restore the
Premises and/or the Building within thirty (30) days after Lessor's written
request therefor, then Lessor may perform such work, and all costs and
expenses incurred by Lessor shall be reimbursed by Lessee within ten (10) days
after Lessee's receipt of Lessor's written demand therefor. The signage
rights of Lessee hereunder shall be personal to the original Lessee and may
not be assigned or transferred to any other person or entity. Lessor shall
not authorize or permit any third-party tenant in the Building to construct a
sign on the front doors of the Building.
(b) Lessee, at Lessor's expense, shall also be entitled to one-half of the
space on the directory board in the lobby of the Building.
64. Modification for Lender. Lessee hereby consents to any changes or
amendments to the Lease requested by any lender of Lessor having a security
interest in the Lease or the Premises or the Building, so long as such changes
do not materially alter the terms of the Lease or otherwise materially
diminish any rights or materially increase any obligations of Lessee therein.
65. Options to Extend.
(a) Notwithstanding anything to the contrary set forth in the Lease, Lessor
hereby grants to Lessee two options (the "Options") to extend the Term of the
Lease for periods of five (5) years each (the "Option Terms"). The Options
must be exercised, if at all, by written notice (the "Option Notice")
delivered by Lessee to Lessor not later than nine (9) months prior to the end
of the then-current Term. Further, the Option shall not be deemed to be
properly exercised if, as of the date of the Option Notice, Lessee is in
default under the Lease. Provided Lessee has properly and timely exercised
the Option, the initial Term shall be extended by the Option Term, and all
terms, covenants and conditions of the Lease shall remain unmodified and in
full force and effect, except that the Rent shall be modified as set forth
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below.
(b) If Lessee timely and properly exercises the Option(s), all of the terms
and conditions of the Lease shall apply during the Option Term(s), except that
the Base Year shall be the first twelve (12) months of each respective Option
Term, and the Base Monthly Rent for each respective Option Term shall be
ninety-five percent (95%) of the "fair market" rental rate (as defined in
Addendum Paragraph 65(c) below) for the Premises at the time of the
commencement of the applicable Option Term. Furthermore, Lessor agrees to
provide new carpet to the Premises and to repaint the Premises at the
beginning of each Option Term.
(c) For the purposes of this Addendum 65 only, "fair-market" rental rate
shall mean the projected prevailing rental rate as of the commencement date of
the then applicable Option Term, for similar rentable space situated in
similar buildings located in the Valencia, California area. Lessor shall use
its commercially reasonable efforts to provide written notice ("Rent Notice")
of such fair-market rental rate not later than one (1) month after receipt of
Option Notice from Lessee. In the event Lessee objects to the "fair-market"
rental rate submitted by Lessor, Lessor and Lessee shall attempt in good-faith
to agree upon such "fair-market" rental rate, using good-faith efforts. If
Lessor and Lessee fail to reach agreement on such "fair-market" rental rate
within thirty (30) days following Lessee's receipt of the Rent Notice (the
"Outside Agreement Date"), then each party's determination shall be submitted
to appraisal in accordance with the following:
(i) Lessor and Lessee shall each appoint one (1) independent
appraiser who shall by profession be a real estate broker active over the
previous five (5) year period ending on the date of such appointment in the
leasing of commercial properties in the Valencia, California area. The
determination of the appraiser shall be limited solely to the issue of whether
Lessor's or Lessee's submitted "fair-market" rental rate for the Premises is
closest to the actual "fair-market" rental rate for the Premises as determined
by the appraisers, taking into account the requirements set forth above. Such
decision shall be based upon the projected prevailing fair-market rental rate
as of the commencement date of the applicable Option Term. Each such
appraiser shall be appointed within fifteen (15) days after the Outside
Agreement Date.
(ii) The two (2) appraisers so appointed shall within fifteen (15)
days after the date of the appointment of the last appointed appraiser agree
upon and appoint a third appraiser who shall be qualified under the same
criteria set forth above for the initial two (2) appraisers.
(iii) The three (3) appraisers shall, within thirty (30) days after
the appointment of the third appraiser, reach a decision as to whether the
parties shall use Lessor's or Lessee's submitted "fair-market" rental rate,
and shall notify Lessor and Lessee in writing thereof.
(iv) The decision of a majority of the three (3) appraisers shall be
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binding upon Lessor and Lessee. If either Lessor or Lessee fails to appoint an
appraiser within the time period specified hereinabove, the appraiser
appointed by one of them shall reach a decision based upon the same procedure
set forth above (i.e., by selecting either Lessor's or Lessee's submitted
"fair-market" rental rate), and shall notify Lessor and Lessee thereof, and
such appraiser's decision shall be binding upon Lessor and Lessee.
(v) If the two (2) appraisers fail to agree upon and appoint a third
appraiser, both appraisers shall be dismissed and the matter to be decided
shall be submitted to arbitration under the provisions of the American
Arbitration Association based upon the same procedures set forth above (i.e.,
by selecting only Lessor's or Lessee's submitted "fair-market" rental rate).
(vi) The costs of appraisal hereunder, and arbitration if necessary,
shall be paid by the party whose rental rate is not selected.
(d) In no event shall the Base Monthly Rent during any Option Term fall below
the Base Monthly Rent in effect for the month immediately preceding the
commencement of such Option Term.
(e) Lessor and Lessee hereby agree to execute an amendment to the Lease
promptly after Lessee's exercise of the Option in order to incorporate the
extension of the initial Term and the lease terms thereof into the Lease.
66. Right of First Offer.
(a) Notwithstanding anything to the contrary set forth in the Lease and
provided that there is then no default by Lessee under this Lease, Lessor
hereby grants to Lessee the right of first offer to lease any additional,
available space located in the Building (the "First Offer Space") as and when
such First Offer Space becomes available for lease to third parties and so
long as any existing lessee of such First Offer Space elects to vacate same.
Lessor shall notify Lessee of (a) the availability of the First Offer Space,
(b) the anticipated date on which the First Offer Space shall be available to
Lessee, and (c) the then-current economic terms, including, but not limited
to, Lessor's determination of the Rent, for the First Offer Space (except that
for any First Offer Space leased during the first five (5) years following the
Commencement Dates the rent shall be the same as under this Lease). For a
period of ten (10) days following Lessee's receipt of Lessor's written notice
containing such information, Lessee shall have the right of first offer to
lease the First Offer Space (i) upon the same economic terms and conditions
set forth in Lessor's written notice, and (ii) provided such election is made
four (4) years or more from the end of the Term, including the option terms,
if then exercised, upon the same non-economic terms of the Lease (including
the Expiration Date). If Lessee fails to elect to lease the First Offer Space
upon Lessor's terms and conditions within such thirty (30) day period, Lessor
shall be entitled to lease the First Offer Space to any third party upon any
terms, and this right of first offer with respect to that space only shall
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terminate and be of no further force and effect. Lessor and Lessee hereby
agree to execute an amendment to the Lease promptly after Lessee s exercise of
the Right of First Offer in order to incorporate the First Offer Space and the
leased terms thereof into the Lease.
(b) Notwithstanding the foregoing, Lessee may, from time to time, request
notice from Lessor of all additional available space in the project, and
within five (5) days thereafter Lessor shall provide to Lessee a list of such
available space. Lessee may then elect to lease such space at the prevailing
rates and terms then being offered by Lessor for such space to third parties
and, provided such election is made four (4) years or more from the end of the
Term, including the option terms, if then exercised, such lease shall be on
the same non-economic terms as the Lease and the term of such lease shall
terminate on the Expiration Date of this Lease, as extended. If this election
is not made within four (4) years or more from the end of the Term, as
extended, the term of such lease, and the non-economic terms of such lease,
shall be subject to mutual negotiation.
(c) Nothing contained in this paragraph 66 shall prevent Lessee from at any
time leasing available space in the Building or granting any other rights with
respect thereto.
67. Default. The term "default" whenever used in this Lease shall mean a
default after the giving of the required notice by Lessor to Lessee, and the
expiration of the cure period.
68. Consent. In each instance where Lessor's consent or approval is
required, it shall not be unreasonably withheld or delayed and shall be deemed
given if Lessor shall not respond to Lessee's written request within seven (7)
days following Lessee's written request. All matters which must be to
Lessor's satisfaction, or performed in Lessor's judgment, shall be to Lessor's
reasonable satisfaction or in Lessor's reasonable judgment. All sums incurred
by Lessor on Lessee's behalf, for which reimbursement is required, shall only
be reimbursed if those sums are reasonable.
69. Alterations. Notwithstanding the provisions of Article 7, Lessee shall
have the right, without Lessor's consent, to make interior, nonstructural
alterations to the Premises, provided same do not adversely affect the
Building's systems and do not affect the exterior of the Building.
70. Reciprocal Indemnity. Notwithstanding the provisions of Paragraphs 8.7
and 8.8 of the Lease, Lessee shall not be required to indemnify and hold
Lessor harmless from any such loss, costs, liability, damage and expense to
any person or property (including but not limited to penalties, fines and
actual attorneys' fees and costs) resulting from the negligent acts or
omissions or the willful misconduct of Lessor or those of its agents,
contractors, servants or employees, in connection with Lessor's activities on
the Premises or the Building to the extent not covered by insurance required
to be maintained by Lessee hereunder, and Lessor hereby so indemnifies,
defends and saves Lessee harmless from any such loss, costs, liability, damage
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and expense (including but not limited to penalties, fines and actual
attorneys' fees and costs). In the case of any action or proceeding brought
against Lessor by reason of any such claim, Lessor upon notice from Lessee
hereby agrees to defend the same at Lessor's expense with counsel to which
Lessee does not reasonably reject. Further, Lessee's agreement to indemnify
and hold Lessor harmless pursuant to Paragraphs 8.7 and 8.8 and the exclusion
from Lessee's indemnity and the agreement by Lessor to indemnify and hold
Lessee harmless pursuant to this Subparagraph (b) are not intended to and
shall not relieve any insurance carrier of its obligations under policies
required to be carried by Lessor or Lessee, respectively, pursuant to the
provisions of this Lease to the extent that such policies cover the results of
such negligence or omissions or such willful misconduct. If either party
breaches this agreement by its failure to carry required insurance, such
failure shall automatically be deemed to be the covenant and agreement by
Lessor or Lessee, respectively, to self-insure such required coverage, with
full waiver of subrogation. Each party's indemnification obligations under
this Lease shall not be limited to the amount of insurance coverage carried by
such party hereunder.
71. Lessee's Continuous Operation. Lessor acknowledges that Lessee's
intended use of the Premises requires uninterrupted twenty-four (24) hours a
day, seven (7) days a week utility service throughout the term of this Lease.
As such, Lessor agrees that Lessee shall be entitled to establish the
requisite electrical connections to a backup electrical generator located
adjacent to the Building (the "Backup Generator") to be installed pursuant to
the Final Plans and as part of the Lessee Improvements, which shall be for
Lessee's exclusive use. Furthermore, Lessor agrees to provide Lessee with
reasonable advance notice of the times during which Lessor knows that the flow
of electricity or air conditioning to the Premises will be interrupted so that
Lessee may plan accordingly. Subject to the foregoing, however, Lessee's
twenty-four (24) hour use of the Premises shall be subject to all of the other
provisions of this Lease, and Lessor shall not be liable for the failure of
Lessee to receive uninterrupted flow of electricity or air conditioning to the
Premises except as otherwise expressly provided in this Lease.
72. Lessee's Right to Make Repairs. If Lessee provides notice to Lessor of
an event or circumstance which requires the action of Lessor with respect to
repair, providing of services, and/or utilities and/or maintenance as set
forth in this Lease, and Lessor fails to provide such action within a
reasonable period of time, given the circumstances, after the receipt of such
notice, but in any event not later than thirty (30) days after receipt of such
notice, then Lessee may proceed to take the required action upon delivery of
an additional ten (10) business days notice to Lessor specifying that Lessee
is taking such required action, and if such action was required under the
terms of this Lease to be taken by Lessor, then Lessee shall be entitled to
prompt reimbursement by Lessor of Lessee's reasonable costs and expenses in
taking such action. In the case of an emergency Lessee shall be entitled to
take whatever minimum steps as are commercially reasonable under the
circumstances until Lessor can address such emergency. In the event Lessee
takes such action, and such work will affect the Building's systems and
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equipment, the structural integrity of the Building and/or the exterior
appearance of the Building or Project, Lessee shall use only those contractors
used by Lessor for work on the Building's systems and equipment or structure
and/or the exterior appearance of the Building or Project, unless such
contractors are unwilling or unable to perform such work, in which event
Lessee may utilize the services of any other qualified contractor which
normally and regularly performs similar work in Comparable Buildings. Further,
if Lessor does not deliver a detailed written objection to Lessee, within
thirty (30) days after receipt of an invoice by Lessee of its costs of taking
action which Lessee claims should have been taken by Lessor, and if such
invoice from Lessee sets forth a reasonably particularized breakdown of its
costs and expenses in connection with taking such action on behalf of Lessor,
then Lessee shall be entitled to deduct from Rent payable by Lessee under this
Lease, the amount set forth in such invoice. If, however, Lessor delivers to
Lessee within thirty (30) days after receipt of Lessee's invoice, a written
objection to the payment of such invoice, setting forth with reasonable
particularity Lessor's reasons for its claim that such action did not have to
be taken by Lessor pursuant to the terms of this Lease or that the charges are
excessive (in which case Lessor shall pay the amount it contends would not
have been excessive), then Lessee shall not be entitled to such deduction from
Rent, but as Lessee's sole remedy, Lessee may proceed to institute legal
proceedings against Lessor to collect such amount.
73. Interruption of Services. Notwithstanding anything contained in the
Lease to the contrary, in the event that Lessee is prevented from using, and
does not use, the Premises or any portion thereof for five (5) consecutive
days, or any ten (10) days in any calendar year ("Eligibility Period") as a
result of any failure of Lessor to provide services, repairs or access to the
Premises, then Lessee's rent shall be abated or reduced, as the case may be,
during the period after the Eligibility Period for such time that Lessee
continues to be so prevented from using the Premises or a portion thereof, in
the proportion that the rentable area of the portion of the Premises that
Lessee is prevented from using, and does not use, bears to the total rentable
area of the Premises. However, in the event that Lessee is prevented from
conducting, and does not conduct, its business in any portion of the Premises
for a period in excess of the Eligibility Period, and the remaining portion of
the Premises is not sufficient to allow Lessee to effectively conduct its
business therein, and if Lessee does not conduct it business from such
remaining portion, then for such time after the Eligibility Period during
which Lessee is so prevented from effectively conducting its business therein,
the rent for the entire Premises shall be abated; provided, however, if Lessee
reoccupies and conducts its business from any portion of the Premises during
such period, the rent allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the Premises
bears to the total rentable area of the Premises, shall be payable by Lessee
from the date such business operations commence.
74. Satellite Antenna. Notwithstanding anything to the contrary in this
Lease, Lessee shall have the right to install, operate and maintain up to six
(6) microwave and earth station dishes or similar antennae ("Antenna") on a
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location on the roof of the Building to be mutually determined by Lessor and
Lessee and shall have access to the roof for purposes related to the Antenna.
Lessee's installation and operation of the antenna shall be governed by the
following terms and conditions:
(a) Lessee's right to install, operate and maintain the Antenna shall be
subject to all governmental laws, rules and regulations and Lessor makes no
representation that such laws, rules and regulations permit such installation
and operation; Lessee, in conjunction with Lessor, shall obtain all necessary
governmental approvals and permits prior to installation;
(b) all costs of installation, operation and maintenance of the antenna and
the connecting cable (including, without limitation, costs of obtaining any
necessary permits) shall be borne by Lessee;
(c) it is expressly understood that Lessor retains the right to use the roof
of the Building for any purpose whatsoever provided that Lessor shall not
interfere with the use of the Antenna;
(d) Lessee shall use the Antenna so as not to cause any interference to other
tenants in the Building or with any other tenant's communication equipment and
not to damage or interfere with the normal operation of the Building,
including any mechanical system thereof, and Lessor shall not permit any
tenant to interfere with the Antenna;
(e) Lessor shall not have any obligations with respect to the Antenna nor
shall Lessor be responsible for any damage that may be caused to Lessee or the
Antenna by any other tenant in the Building. Lessor makes no representation
that the Antenna will be able to receive or transmit communication signals
without interference or disturbance (whether or not by reason of the
installation or use of similar equipment by others on the roof) and Lessee
agrees that Lessor shall not be liable to Lessee therefor;
(f) Lessee shall (i) be solely responsible for any damage caused by the
Antenna, including, but not limited to, any damage caused to the roof of the
Building during the installation or maintenance of the Antenna, or caused by
the Antenna itself, (ii) promptly pay any tax, license or permit fees charged
pursuant to any laws or regulations in Connection with the installation,
maintenance or use of the Antenna and comply with all precautions and
safeguards recommended by all governmental authorities, (iii) pay for all
necessary repairs, replacements to or maintenance of the Antenna, and (iv) not
bore into any structural elements of the Building in connection with the
installation of the antenna;
(g) Lessee shall remove the Antenna and connecting cable at Lessee's expense
upon the expiration or sooner termination of the Lease or upon the imposition
of any governmental law or regulation which may require removal, and shall
repair the roof of the building upon such removal to the extent required by
such work of removal; and
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(h) the size of each of the Antenna shall not exceed thirty (30) inches in
diameter and the appearance of the antenna shall be subject to all
governmental rules and regulations.
75. Cancellation Option. Lessee shall have the one time right to terminate
this Lease ("Option to Terminate") at the end of the sixtieth (60th) month
following the Commencement Date by providing to Lessor at least six (6)
months' prior written notice of Lessee's election to terminate this Lease and
by paying to Lessor Nine Hundred Sixty-Four Thousand One Hundred Fifty-Three
and 31/100 Dollars ($964,153.31) (the "Termination Consideration") as
consideration for terminating this Lease. Lessee shall pay to Lessor the
Termination Consideration on the first (1st) day of the fifty-ninth (59th)
month of the Term of this Lease and if Lessee has timely provided the
Termination Notice and timely paid the Termination Consideration within ten
(10) days following notice that the same is due, then this Lease shall
terminate and be of no further force and effect on the last day of the
sixtieth (60th) month of the Term of this Lease. If Lessee notifies Lessor of
its exercise of the Option to Terminate but fails to pay the Termination
Consideration within ten (10) days following notice that the same is due, then
at Lessor's election Lessor may either terminate the Lease or keep the Lease
in full force and effect (in which case Lessee's exercise of the Option to
Terminate shall be null and void).
76. Refurbishment. Provided that Tenant does not exercise the Option to
Terminate set forth in paragraph 75 above, and provided further that Tenant
utilizes at least 50% of the carpeting currently existing in the Premises for
Lessee's initial occupancy of the Premises, then Lessor agrees to recarpet and
repaint the Premises within two (2) months after the 60th month following the
Sublease Commencement Date.
77. Moving Allowance. Lessor agrees to provide to Lessee a moving allowance
in the amount of $31,529.00 to be payable to Lessee within one month following
Lessee's move in to the Premises.
78. Non-Disturbance Agreement. Lessor hereby agrees that concurrently with
its execution and delivery of this Lease, Lessor will provide Lessee with
commercially reasonable non-disturbance agreements from any ground lessors,
mortgage holders or lien holders of Lessor now in existence. In addition,
Lessor will provide Lessee with such agreements as soon as reasonably possible
from ground lessors, mortgage holders or lien holders of Lessor who later come
into existence during the term of the Lease. Lessor's covenant contained
herein shall be in consideration of and as a condition precedent to Lessee's
agreement to be bound by Paragraph 28 of the Lease. Lessee further waives the
provisions of any current or future statute, rule or law which may give or
purport to give Lessee any right or election to terminate or otherwise
adversely affect this Lease and the obligations of the Lessee hereunder in the
event of any foreclosure proceeding or sale, and agrees that this Lease shall
not be affected in any way whatsoever by any such proceeding or sale, except
that this sentence shall not affect Lessor's obligation to provide
commercially reasonable nondisturbance agreements to Lessee.
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79. Security. Lessor agrees that Lessee shall be permitted to install its
own security system in the Premises which security system shall be subject to
Landlord's prior written consent, which consent shall not be unreasonably
withheld
80. Actual Costs. If Lessee is required to pay any amounts pursuant to this
Lease other than Basic Rent, any parking fee and Operating Expenses,
including, but not limited to after hours utility service, such amount shall
be the actual cost incurred by Lessor (including a ten percent (10%) overhead
and profit element for the property) as such amount is reasonably determined
by Lessor. In the event that more than one lessee of the Building orders such
item, or if any cost item is applicable to more than one lessee, such costs
shall be apportioned among all lessees in accordance with the ratios that such
utility is used, and if that is not able to be determined, then it shall be
apportioned in accordance with the ratio of the rentable square footage of
each lessee's respective premises.
81. Storage Space. Lessor shall make available to Lessee at such times as
any space becomes available (and after considering the needs of other tenants
in the Project), storage space throughout portions of the project as required
by Lessee at the prevailing rate for such storage space then being offered by
Lessor to other tenants of the project.
82. Lease Assumption. Lessee is the present tenant under a lease with
Copperfield Investment & Development Company dated December 1, 1983, and the
user under a License Agreement dated June 7, 1984, amended by agreements dated
October 16, 1989, March 13, 1987 and March 10, 1988 (the "Existing Lease"),
covering premises outside the Office Building Project. Lessee shall remain in
possession and pay rent under the Existing Lease until May 31, 1992. Lessee
represents and warrants that the rent obligation (including additional rent)
for the period June 1, 1992 through the expiration of the term of the Existing
Lease is $305,248.66 and that the Existing Lease is scheduled to expire on May
31, 1993. Lessor shall use its good faith efforts to arrange for a
cancellation of the Existing Lease, and the release of Lessee from all
liability under the Existing Lease from and after May 31, 1992, and Lessee
hereby appoints Lessor as its limited agent for the sole purpose of arranging
such cancellation. The cost of obtaining that cancellation shall be paid as
follows: (i) the first $190,780.43 shall be paid by Lessor ("Lessor's Maximum
Obligation"), (ii) any payment in excess of the above amount up to $114,468.23
("Lessee's Maximum Obligation") shall be paid by Lessee, and (iii) any
Security Deposit held by the Landlord under the Existing Lease shall be
payable to Lessee. In no event shall either party be obligated to pay an
amount in excess of the applicable limit set forth above, and in no event
shall Lessor enter into an agreement with the landlord under the Existing
Lease obligating Lessee to pay a lease cancellation fee in excess of Lessee's
Maximum Obligation or creating any other obligation or liability of Lessee
without Lessee's prior written consent. In the event Lessor is able to cancel
the Existing
Lease and release Lessee from liability thereunder without expending all of
Lessor's Maximum Obligation, Lessee acknowledges and agrees that Lessee shall
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have no right to receive any portion of such savings in the form of cash, rent
credit or otherwise. If Lessor is unable to obtain that cancellation and
release upon terms which are within the parties' maximum commitments described
above using Lessor's good faith efforts on or before March 1, 1992, Lessee
shall, at its option, either attempt to arrange for same (and the payments
therefore shall be made as provided in this paragraph) or continue to pay rent
under the Existing Lease, in which case the first $190,780.43 of rent and
additional rent from and after May 1, 1992 shall be paid by Lessor, (and if
Lessee fails to make such payment within ten (10) days after notice from
Lessee that such amount is due, Lessee shall be entitled to pay same and
deduct it from the rent due under this Lease).
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum concurrently
with the Lease of even date herewith.
"LESSOR" VALENCIA PARAGON ASSOCIATES, LTD.,
a California Limited Partnership
By: /s/ JEREMY B. FLETCHER
Its: General Partner
By: /s/ JEFFREY B. ALLEN
Its: General Partner
"LESSEE" UNISTAR COMMUNICATIONS GROUP, INC.,
a Delaware Corporation
By: /s/ WILLIAM J. HOGAN
Its: President
By: /s/ WILLIAM B. LOCKETT
Its: Senior V.P. Administration
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TRANSMISSION SERVICE AGREEMENT
This Agreement, when executed by authorized representatives of
each party will supersede a contract dated November 1, 1989 that
currently exists between IDB Communications Group, Inc., a
Delaware corporation having its principal office at 10525 West
Washington Boulevard, Culver City, California 90232-1922 ("IDB"),
and Unistar Radio Networks, Inc., a Delaware Corporation, having
a principal office at 1675 Broadway, 17th Floor, New York, NY
10019 ("Customer"). For and in consideration of the promises and
covenants set forth in this Agreement, the parties hereby agree
as follows:
This contract will take effect on June 1, 1993.
1. Primary IDB Services.
Los Angeles Formats
a) IDB will provide full-time uplink and space segment of
seven (7) stereo pairs and 2 mono audio channels, and the
associated data channels. The current delivery method(s)
(Attachment A), hereinafter referred to as "Formats - Current
Distribution" will be maintained until such time as IDB is able
to provide items in Paragraphs 1 (b) through 1 (e) as specified
below. At such time when items in Paragraphs 1 (b) through 1 (e)
have been provided, IDB will discontinue delivery as specified in
Paragraph 1 (a).
b) IDB will provide to Customer full-time uplink and space
segment of 6 - 20 kHz Sedat 4 Audio Channels (3 stereo pairs), 8
- 20 kHz Sedat 1 Audio Channels (4 stereo pairs) and 2 mono Sedat
3 audio channels on Satcom C5, hereinafter referred to as
"Formats - Sedat Distribution" on Satcom C5. Sedat definitions
are included in Attachment B.
c) IDB will provide to Customer full-time uplink and space
segment of one (1) data channel with up to 32 kbps of data.
d) IDB will provide to Customer a quantity of 900
Scientific Atlanta Receivers Model # DSR3610-modified.
Specifications are delineated in Attachment C.
e) IDB will arrange for installation of the receivers
specified in Paragraph 1 (d) at the locations with existing
Satcom C5 downlinks as designated by Customer. The work
statement is detailed in Attachment D.
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f) IDB will provide terminal equipment, as specified in
Attachment E, to support audio paths between IDB's Culver City
location and Customer's Valencia location. At the request of
Customer, IDB will provide additional equipment at a price to be
negotiated at the time of purchase of said equipment.
g) IDB will provide 24 hour network monitoring and
troubleshooting of all paths and audio channels that are provided
by IDB or terminate at IDB's Culver City location.
New York Programming
h) IDB will provide to Customer full-time uplink and space
segment of five (5) audio channels, one (1) voice cue channel,
and occasional uplink and space segment for specified programs.
The current channel breakdown and delivery method(s) (Attachment
F), hereinafter referred to as "NY - Dats" will be maintained
until such time as IDB is able to provide items Paragraphs 1 (i)
through 1 (l). At such time when items in Paragraphs 1 (i)
through 1 (l) have been provided, IDB will discontinue delivery
as specified in Paragraph 1 (h).
i) IDB will provide to Customer full-time uplink and space
segment of three (3) 10 kHz Sedat 3 Audio Channels and two (2) 20
kHz Sedat 1 Audio Channels on Satcom C5, hereinafter referred to
as "NY Sedat".
j) IDB will provide to Customer one (1) Sedat 1 voice cue
channel equivalent. A voice cue channel equivalent is defined as
a channel with a minimum frequency response of 50 hz - 3.4 kHz
and the ability to pass DTMF tones.
k) IDB will provide to Customer a quantity of 850 Sedat
Digital Audio Decoder Cards, 595 will be Model # AD4226 and
compatible with the DAT32 chassis, and 255 will be Model # AD4227
and compatible with the DART 384 chassis.
l) IDB will provide shipment of the cards specified in 1
(k) and written installation instructions to the radio stations
as designated by Customer. Cards will be delivered to stations a
minimum of two (2) weeks prior to the conversion date to "NY
Sedat".
m) IDB will provide primary T-1 path routing from the
designated demarcation point at Customer's Arlington, VA location
(telephone room at 2000 15th Street North, Arlington, VA) to
IDB's demarcation point (telephone closet at 5 Teleport Drive,
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Staten Island, NY). Routing detail, to be agreed upon by
Customer and IDB, shall be included as Attachment G to this
contract within 60 days of contract signature.
n) IDB will provide primary digital encode/decode and CSU
hardware to support four (4) duplex 15 kHz audio paths for the T-
1 path specified in 1 (m).
o) IDB will provide the following backup hardware at
Customer's Arlington location and IDB's Staten Island location to
support the four (4) 15 kHz duplex path for the T-1 path
specified in 1 (n): 1 power supply, 2 transmit cards, 2 receive
cards. Backup hardware at IDB's Staten Island location can be
part of IDB's general "pool of spares".
p) Within 60 days of contract signature, IDB will provide
fully diverse backup routing, defined as path(s) that have no
duplication in routing from Customer's Arlington demarcation
point (telephone closet at 2000 15th Street North, Arlington, VA)
to IDB's demarcation point (telephone closet at 5 Teleport Drive,
Staten Island, NY) of a minimum of a second T-1. Routing detail,
to be agreed upon by Customer and IDB, shall be included as
Attachment G to this contract within 60 days of contract
signature.
q) IDB will provide backup digital encode/decode and CSU
hardware to support four (4) duplex 15 kHz audio paths for the
T-1 path specified in 1 (p).
r) IDB will provide primary digital encode/decode and CSU
hardware to support four (4) duplex 15 kHz audio paths for the T-
1 path provided by Customer between Customer's New York, NY
facility and IDB's Staten Island, NY location.
s) IDB shall be responsible for delivery of Customer's audio
channels from the IDB demarc point to the uplink location on a
primary and a fully diversely routed backup path. IDB is
responsible for providing equipment on these paths as required.
Routing detail, to be agreed upon by Customer and IDB, shall be
included as Attachment H to this contract within 60 days of
contract signature.
t) IDB shall be responsible for, and shall bear all costs
associated with, the troubleshooting, maintenance and repair of
its owned T-1 related equipment located within Customer's
premises.
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u) IDB will provide 24 hour network monitoring, alarming
where reasonable, and troubleshooting of all paths and audio
channels that are provided by IDB or terminate at IDB's Staten
Island location.
2. Additional IDB Services
Los Angeles Formats
a) IDB will provide, at the request of Customer, additional
stereo pairs (128 kbps or 192 kbps stereo dependent). IDB
guarantees availability of two (2) additional 128 kbps or 192
kbps stereo pairs (4 channels), with 90 days notice from
Customer. Additional channels beyond this number are subject to
availability.
b) IDB will provide Customer with ninety (90) days written
notification of the anticipated date for the conversion to
"Formats - Sedat Distribution".
c) IDB will provide Customer with thirty (30) days written
notification of the exact date for the conversion to "Formats -
Sedat Distribution".
d) IDB will have a 24 hour hotline service available to
Customer's affiliates for technical support during the transition
from the "Formats - Current Distribution" to the "Formats - Sedat
Distribution". Engineering personnel will be available during
business hours from the date that equipment ships until the final
conversion is done. During non-business hours, operations
personnel will be available for support. In addition, for the
entire period of the contract, IDB will become the initial point
of contact for Customer's Format stations with technical
problems. Once IDB identifies that the problem is on the station
end, the call will be redirected to Customer personnel for
troubleshooting.
e) At Customer's request, IDB will upgrade Customer's
"Formats - Sedat Distribution" system to support the "Store and
Forward Capability". IDB will provide the SA hardware and
software as delineated in Attachment I.
f) At Customer's request IDB will work with Customer in search of
alternate vendors for the Store and Forward capability. The
digital interface information required to allow development of
the Store/Forward capability by alternate vendors will be
provided to IDB by Scientific Atlanta and attached to this
contract as soon as the specification is published. Prices
quoted in this contract for Store/Forward are not valid for any
other vendor at this time.
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g) At Customer's request, IDB will upgrade Customer's three (3)
stereo pairs of Sedat 4 quality channels to Sedat 2 quality
channels. This upgrade refers only to the channels specifically
referred to in Paragraph 1 (b) of this contract.
h) At Customer's request, IDB will provide one (1) 10 kHz Sedat 3
quality channel for Newslink.
New York Channels
i) IDB will provide to Customer uplink and space segment
for two (2) - 20 kHz Sedat 1 channels (one stereo pair) for
satellite distribution of "Super Gold Saturday Night" on Satcom
C5 from 1800 - 0200 ET.
j) IDB will provide to Customer uplink and space segment
for two (2) - 20 kHz Sedat 1 channels (one stereo pair) for
satellite distribution of "Country Gold Saturday Night" on Satcom
C5, from 1850 - 0300 ET.
k) IDB will provide Customer with as much written
notification as possible of the anticipated date for the "NY -
Sedat" conversion.
l) IDB will provide Customer with thirty (30) days written
notification of the exact date for the "NY - Sedat" conversion.
m) IDB will have a 24 hour hotline service available to
Customer's affiliates for technical support during the transition
from "NY - Dats" to "NY - Sedat". Engineering personnel will be
available during business hours from the date that equipment
ships until the final conversion is done. During non-business,
operations personnel will be available for support.
n) Any additional Sedat cards requested by Customer within
thirty (30) days of the conversion to "NY - Sedat" date will be
made available at the contract rate of $ 12.71 per card for the
term of the contract. Additional Sedat cards requested by
Customer more than thirty (30) days after the conversion to "NY -
Sedat" will be made available to customer subject to time frames
and rates to be negotiated at the time of that request.
o) Customer has the option to return unused cards to IDB
within sixty (60) days of the conversion date to "NY - Sedat". A
per card decrease of $ 12.71 per card in cost will be reflected
in Customer's monthly bill.
p) At the request of the Customer, IDB will be responsible
for the operation of an automated program logger that will record
the Unistar Program Channels and cue channel.
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q) IDB's provision of the Gentner Automation System (Dawn
Model) in January of 1992 to Customer fulfills IDB's previous
contractual commitments to provide tape recording and playback of
Customer's programming.
r) IDB will provide adequate Sedat receive cards at IDB's
Staten Island facility to monitor Customer's audio channels on a
full-time basis.
Los Angeles Formats and New York Channels
s) IDB will furnish discrepancy reports to Customer
concerning the operation of the transmission system on an "as
needed" basis.
3. Customer Responsibilities.
Los Angeles Formats
a) Customer shall be responsible for provision and
installation of audio paths, as needed, between Customer's
location(s) and IDB, Culver City.
b) Customer shall be responsible for all hardware, except
as specifically stated otherwise in Attachment E, required on the
audio paths specified in Paragraph 3 (a).
c) Customer shall be responsible for providing a list of
locations, contacts, phone #s, and addresses for IDB shipment and
installation of receivers. This list should be provided to IDB a
minimum of sixty (60) days prior to the anticipated conversion
date. Customer will also provide the information to IDB in label
form or computer text file form.
New York Channels
d) With the exception of the primary and backup paths
specified in Paragraphs 1 (m) and 1 (p), Customer is responsible
for provision and installation of audio paths, as needed, between
Customer's location(s) and IDB, Staten Island. Specifically,
Customer is responsible for provision of T-1 path referred to in
Paragraph 1 (r).
e) Customer is responsible for all programming, maintenance
and repair of the Gentner Automation System referred to in
Paragraph 2 (q).
f) Customer shall be responsible for providing a list of
locations, contacts, phone #s, and addresses for IDB shipment of
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Sedat cards. This list should be provided to IDB a minimum of
forty-five (45) days prior to the anticipated conversion date.
Customer will also provide the information to IDB in label form
or computer text file form.
g) Customer will be responsible for all equipment,
maintenance, repair and tape associated with the program logger
that will record the Customer's Program Channels and cue channel
referred to in Paragraph 2 (p).
h) Customer will provide and maintain digital receive
equipment at the Teleport for full-time monitoring of the
Customer's Signals. This will consist of 1 downconverter shelf
and 1 demodulator shelf with the appropriate hardware, with the
exception of the Sedat audio channel cards referenced in
Paragraph 2 (r).
Los Angeles Formats and New York Channels
i) Customer will provide an air conditioned environment and
power with generator backup as available at Customer locations
where all IDB equipment is installed. IDB's equipment will be
hooked up to the backup power.
j) Customer's technicians, when available, will use their
reasonable efforts to assist IDB in troubleshooting and
replacement of modules as requested by IDB on any IDB owned
equipment at Customer's locations. If a Customer provided
technician incurs and is paid overtime for the primary purpose of
assisting IDB, IDB shall reimburse Customer for its costs
associated with the troubleshooting.
k) Customer is responsible for the origination of all
programming material to be fed to Customer's channels, except as
specifically agreed upon between Customer and IDB.
4. Charges and Payments
a) The charges for the Primary Services described in
Paragraph 1 and Secondary Services described in Paragraph 2,
except for the items listed in Paragraphs 2 (a), 2 (e), 2 (g), 2
(h), 2 (n), and 2 (o) will be as follows:
From June 1, 1993 until NY Sedat Conversion Date:
$ 258,035.60 per month
From NY Sedat Conversion Date - November 31, 1993:
$ 198,842.00 per month
From December 1, 1993 - May 31, 2003
$ 121,000.00 per month
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A breakdown of the December 1, 1993 - May 31, 2003 price is
included in Attachment J. This breakdown is for informational
purposes only.
b) In addition, the following services listed in Paragraphs
1 and 2, upon request by Customer, will necessitate the following
changes in the monthly billing.
Paragraph 2 (a) $ 5,161.30 increase per 128
kbps stereo pair
$ 7,741.94 increase per 192
kbps stereo pair
Paragraph 2 (e) $ 17,000 per month increase;
this price is valid for the quantity and type of unit specified
within Attachment I; a written and formal request for service
must be made by Customer to IDB prior to May 30, 1994.
Paragraph 2 (g) $ 6,250 increase per month
Paragraph 2 (h) $ 2,580.64 increase per month
Paragraph 2 (n) $ 12.71 increase per card
requested within thirty (30) days of the conversion to "NY -
Sedat" date; price for cards requested after that period will be
provided at a price to be negotiated.
Paragraph 2 (o) $ 12.71 decrease per card
c) Charges for the Services described in Paragraphs 1 and 2
of this Agreement (collectively "the Services") shall be invoiced
by IDB to Customer thirty (30) days in advance of the first day
of each service month. All invoices are due Net Thirty (30) days
from date of invoice. Any payments not received when due will be
assessed a finance charge of 1 1/2 % per month until paid. In
addition, if any payment is not received when due, IDB shall be
entitled to give written notice to Customer of IDB's intention to
discontinue service. If Customer fails to bring its account with
IDB current within thirty (30) days after the date of receipt of
such written notice, IDB shall have the right to discontinue all
service to Customer without further notice and without liability
or penalty of any kind on account of such termination. If
service under this Agreement is terminated due to Customer
nonpayment, service will be restored only when those invoices
which are overdue, regardless of due date, have been paid, and
continued service thereafter will require that charges for the
8
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Services be paid in advance and invoices for all other services
will be due net thirty (30) days, subject at all times to IDB's
rights to assess late charges and to discontinue service for
nonpayment as provided above. All payments for the Primary and
Secondary Services will be made when scheduled as provided in
this Paragraph 4 (c), regardless of whether there exists any
dispute between the parties concerning IDB's performance under
this Agreement.
5. Most Favored Nation
IDB acknowledges that Customer is guaranteed "most favored
nation" status relative to the pricing of the uplink and
satellite channels in Paragraphs 1 (b) and 1 (i). These prices
are $ 2,580.64 per 64 kbps channel, based on the Sedat
compression algorithms which are referred to in this contract.
In the event that IDB contracts with another customer at a lower
price for channels and services of the same quantity and
bandwidth as specified in this contract, IDB will provide written
notification to Customer, and extend those lower rates to
Customer effective the same date as commencement of the third
party service.
6. Term and Termination.
a) Service under this Agreement shall commence on June 1,
1993 and shall continue for a term of ten (10) years.
b) If at anytime Customer wishes to cancel this agreement,
Payment according to Paragraph 4 (c) of the agreement will be
made according to one of the following:
i) Payment of 1/120th of the total value of the contract
each month until such time Customer or IDB finds a replacement
customer(s) for the space segment in Paragraphs 1 (a) or 1 (b)
and 1 (c) and Paragraphs 1 (h) or 1 (i) and 1 (j), and the
hardware specified in Paragraphs 1 (d) and 1 (k). At that time
and on a monthly basis the payment of 1/120th owed to IDB by
Customer will be reduced by the monies collected by resale of
such space segment and receive hardware.
or
ii) When both parties agree to a liquidated settlement.
or
iii) When IDB or Customer find a customer(s) to fully
replace revenue previously generated to IDB by Customer.
c) Not withstanding Customer's obligations set forth in
Paragraph 6 (b), should Customer cancel this agreement, IDB shall
use its best efforts to find a replacement Customer and mitigate
its damages hereunder as a result of such cancellation.
9
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d) If IDB cancels this Agreement, because of non-payment or
a material breach by the Customer, IDB shall be entitled to all
monies referred to in Paragraph 6 (b). If IDB cancels this
Agreement, it shall, nonetheless, be subject to the limitations
set forth in Paragraph 6 (c).
7. Programming
IDB shall have no responsibility to monitor the transmission of
Customer's programming signals for content or compliance with FCC
rules and regulations or for any other purpose other than
transmission integrity assurance.
8. Ownership of Receive Equipment
a) At all times during this contract, IDB shall maintain
ownership of the receive equipment provided by IDB. At the end
of the contract term, Customer has the right to purchase all of
the receive equipment provided by IDB in Paragraphs 1 (d) and 1
(k) for a price of $ 1.00.
b) Within the time frame of the contract term, IDB shall be
responsible for all maintenance and repair of receive equipment
specifically provided by IDB in this contract. Procedures and
standards for this maintenance and repair are included in
Attachment K.
c) Customer is responsible for determining the allocation of the
receive equipment to the affiliated radio stations. IDB will be
responsible for delivery and installation of this hardware as
specified in Paragraphs 1 (e) and 1 (l) for all equipment shipped
prior to and within thirty (30) days of the Sedat conversion
dates. After that point, Customer will be responsible for the
cost of shipment and installation.
d) Customer will be responsible for notifying IDB of any changes
in the location of the equipment.
9. Maintenance of Customer Equipment
Except for negligence (which for purposes of this Agreement shall
include mutually agreed upon practices and procedures on the part
of IDB or its employees), IDB shall not be liable for any failure
of the Customer Equipment, nor the cost of Customer's parts or
Customer's third party service, Customer's freight or any other
Customer costs as may be incurred in maintaining such equipment.
At the request of Customer, IDB will obtain maintenance service
10
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<PAGE>
for the Customer Equipment and will invoice Customer directly for
all direct costs incurred thereby. Customer may add, remove or
change its equipment as Customer deems necessary. All such
changes at IDB facilities must be made while accompanied by IDB
personnel so as not to cause service outages or other
interference with IDB operations. IDB will provide Customer and
its representatives and contractors with access to the Customer
Equipment on reasonable notice and as may be required in
emergencies.
10. Technical Specifications re: Uplink and Space Segment
a) Technical specifications of the satellite uplink
transmission system will be those specifications given to IDB by
GE Americom which will be referred to as "Attachment L" to this
Agreement.
b) IDB will continue to be a party to the existing
Agreement (A copy of said agreement is attached hereto as
Attachment M"), among GE, ABC, CBS, NBC, Unistar, and the
Associated Press that provides for reciprocal voice and news wire
announcements should any party thereto suffer a catastrophe.
c) IDB will provide Customer with a schedule, as prepared
and provided by GE Americom, of predicted sun outages for the
satellite in use at least four (4) weeks prior to the beginning
of those outages for the 50 locations designated by Customer that
are provided to IDB by the satellite carrier.
d) The uplink multiplex and transmission equipment shall be fully
redundant with one set of equipment maintained in a "hot standby"
condition. It shall be monitored and switched as required. A
redundant antenna need not be maintained, but, in case of failure
of the uplink antenna or its transmission lines, IDB will arrange
to re-route, pre-empt or make provisions for another antenna to
be brought into service as soon as possible.
e) Restoration provisions are attached as "Attachment N" and
incorporated into this Agreement. These restoration procedures
are those currently being provided by GE Americom.
f) IDB will not schedule outages for maintenance or other
purposes, including equipment reconfiguration on any equipment or
transmission service which could cause a service outage to the
satellite or otherwise materially impair Customer's operations
without prior authorization of Customer's personnel. Customer
will not unnecessarily withhold testing permissions if the
Customer's channels are not in use.
11
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<PAGE>
g) IDB agrees not to change or modify the satellite system
without the prior written approval, which shall not unreasonably
withheld, by Customer.
h) All IDB's satellite, transponder, and channel assignments are
subject to the "restoral" provisions designated by the satellite
carrier.
11. Service Availability and Liability.
a) IDB guarantees to Customer service availability of 99.8%
for the services described in Paragraphs 1 and 2 of this
Agreement, with the exception of those items specified in
Paragraphs 1 (a), 1 (b), 1 (c), 1 (h), 1 (i), 1 (j), 1 (m), 1(p)
and 1 (s), and those services as detailed below. IDB guarantees
to Customer service availability as described in Attachment I for
all items specified in Paragraphs 1 (a), 1 (b), 1 (c), 1 (h), 1
(i) and 1 (j). IDB guarantees to Customer service availability
of 99.95% error-free seconds measured over 24 consecutive hours
and 99.96% availability measured over 12 consecutive months for
items specified in Paragraphs 1 (m) and 1 (p) and 1 (s).
Exceptions also apply for interruptions or other problems in such
services due in whole or in part to any of the following:
(i) Customer failing to provide program material
and/or schedules;
(ii) Any downtime or other interruption of facilities
or services not provided by IDB in this contract;
(iii) The Customer Equipment, and acts or failures to
act on the part of Customer and its employees, agents and
contractors other than IDB; and
(iv) Acts of God or third parties, other than those
for which IDB is responsible per this contract, or other causes
beyond the reasonable control of IDB.
b) If, for reasons other than those described in Paragraph
11 (a), IDB fails to transmit Customer's programming for the
amounts specified in Paragraph 11 (a), IDB's sole and total
liability and Customer's exclusive remedy shall be limited to
Customer receiving, as liquidated damages and not as a penalty,
the prorated amount of actual charges for each hour or portion
thereof that Customer's programming is not transmitted. IDB
shall not be liable for any and all claims, losses, liabilities,
direct or consequential damages, costs and expenses, including
attorneys` fees, arising out of IDB's failure to transmit
12
<PAGE>
<PAGE>
customer's programming, except when such failure is the result of
negligence on the part of IDB, it agents or employees.
c) Customer shall have the right to terminate this
agreement for non performance if IDB's performance falls below
the amounts specified above for a period of three (3) consecutive
months or if IDB's performance falls below the amounts specified
above during any five (5) months in a calendar year,
notwithstanding anything contrary set forth in this Agreement.
Customer shall not have any payment obligation or other
obligation or liability to IDB hereunder and upon such
termination, IDB shall, at Customer's request and with GE
Americom's approval, reassign free and clear of any encumbrances
all of IDB's rights and privileges to the channels specified in
Paragraphs 1 (a) or 1 (b) and 1 (c), and 1 (h) or 1 (i) and 1 (j)
under the agreement with GE Americom or any successor agreement.
12. Sales of Excess Capacity
a) Customer may sell the excess channel capacity only as
specifically stated herein Paragraph 6 and Paragraph 12 of this
contract.
b) Except as specified in Paragraph 6 and Paragraph 12 (c),
Customer may not sell excess capacity on the "New York Dats" or
"New York Sedat" through June 30, 2001.
c) If at anytime, Customer has a decrease in the need for the
quantity of full time channels provided for under this contract,
and IDB and Customer do not wish to renegotiate the channel
quantity and pricing, then Customer has the right to sell these
channels specifically for the purpose of covering the cost of
those channels. The "right to sell" only applies to the quantity
of channels which Customer currently has as specified in
Attachments A & D. Those channels referred to in Paragraph 2 (a)
of this contract are not included.
d) If Customer wishes to resell occasional channels, it may be
done by reselling to IDB at a rate to be negotiated in good faith
by both parties. IDB has the right to resell those channels at a
rate which provides IDB with its standard markup.
e) Unless specifically agreed to otherwise in writing by IDB, any
channels which are sold by Customer to a client other than IDB
must be routed through Customer controlled facilities to IDB
and/or IDB's uplink location.
13
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<PAGE>
13. Changes in Channels
In the event that new technologies become available and
competitive, neither IDB nor Customer will deny the other the
opportunity to evaluate conversion of the satellite channel
capacity to the new technology. In the event that IDB is
unwilling to convert the "headend", and with the addition of
Customer's affiliates over 2/3rds of the existing US commercial
radio stations would be able to receive the new technology, then
IDB will release Customer from the commitment to this contract
for the capacity which IDB will not convert, with nine (9) months
written notice.
14. Third Party Requirements.
a) The parties acknowledge and agree that, in providing
satellite transmission services, IDB will be required to operate
in accordance with the practices and procedures of the carrier
from whom satellite transponder space or other transmission
facilities are utilized, and to the extent carrier practices and
procedures are inconsistent with the terms of this Agreement,
such practices and procedures will control IDB's performance
hereunder.
b) The satellite uplink transmission services to be
provided by IDB under this Agreement are subject to regulation by
the Federal Communications Commission (the "FCC"). Throughout
the term of this Agreement, IDB will obtain and keep current all
licenses, permits and other approvals of the FCC or other
governmental bodies required to perform such services. IDB's
performance under this Agreement will at all times comply with
the rules and regulations of the FCC, and to the extent they are
inconsistent with the terms of this Agreement, such rules and
regulations will control IDB's performance hereunder.
15. Miscellaneous.
a) Payment of the charges set forth in this Agreement
entitles Customer to receive only the services expressly
described in this Agreement as being covered by such charges, and
all other extra or additional services which Customer may wish to
obtain from IDB shall only be supplied to Customer at prices and
on such other terms as may be agreed to between the parties.
b) Except for negligence on the part of IDB or its
Employees, Customer will indemnify and hold IDB harmless from and
against any and all claims, losses, liabilities, direct or
consequential damages, costs and expenses, including reasonable
attorneys' fees, arising out of or related to the content of
14
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Customer's programming or other material furnished by Customer
hereunder, including without limitation any claim for libel,
slander or infringement of copyright. This indemnification shall
survive any termination of this Agreement.
c) Insofar as not inconsistent with paragraph 15 (b) above,
IDB will indemnify and hold Customer harmless from and against
any and all claims, losses, liabilities, damages, costs and
expenses, including reasonable attorneys' fees, arising out of or
relating to the negligence or willful actions of IDB or its
agents and employees in transmitting Customer's programming,
including but not limited to failure to maintain necessary
licenses or interference with a third party's transmissions.
This indemnification extends only to IDB's actions in
transmitting Customer's programming, and does not in any way
affect the limitation on IDB's liability for failure to transmit
Customer's programming set forth in paragraph 11 (b). This
indemnification shall survive any termination of this Agreement.
d) Neither party has any authority to make any statement,
representation, warranty or other commitment on behalf of the
other party, and this Agreement does not create any agency,
employment, partnership, joint venture or similar relationship
between the parties.
e) Neither party may assign any rights or obligations under
this Agreement without the prior written consent of the other
party, such consent not to be unreasonably withheld, provided,
however, that either party may assign its rights hereunder
without the consent of the other party to any entity with which
it may be merged or consolidated or which acquires all or
substantially all of its assets, provided that such entity agrees
to writing to assume all of the obligations of Customer or IDB,
as the case may be, under this Agreement.
f) All notices which either party may be required or desire
to give to the other party under this Agreement shall be given by
personal service or by registered or certified mail, return
receipt requested, addressed to such party at its respective
address as set forth at the beginning of this Agreement, or to
such other address as a party may hereafter designate by proper
written notice to the other party.
15
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<PAGE>
g) No waiver of any breach of this Agreement shall
constitute a waiver of any other breach of the same or any other
provision of this Agreement, and no waiver shall be effective
unless made in writing. In the event that any provisions of this
Agreement shall be judged illegal or unenforceable by a court of
competent jurisdiction, such provision shall be severed and the
entire Agreement shall not fail but the balance of this Agreement
shall continue in full force and effect.
h) It is mutually acknowledged and agreed that this
Agreement shall be construed in accordance with the laws of the
State of California.
i) Customer and IDB acknowledge that they have read this
entire Agreement and that this Agreement constitutes the entire
understanding and contract between the parties hereto, and
supersedes any and all prior or contemporaneous oral or written
communications with respect to the subject matter hereof, all of
which are merged herein. This Agreement shall not be modified,
amended or any way altered except by an instrument in writing
signed by both of the parties hereto.
WHEREFORE, this Agreement shall take effect as of the date
first written above when it has been executed below on each of
two copies of duly authorized representatives of each party
hereto.
IDB COMMUNICATIONS GROUP, INC. UNISTAR RADIO NETWORKS, INC.
IDB COMMUNICATIONS GROUP, UNISTAR RADIO NETWORKS, INC.
INC.
/s/ Jill S. Jameson /s/ Farid Suleman
______________________ __________________________
Signature Signature
Jill S. Jameson Farid Suleman
______________________ ___________________________
Print Name Print Name
Director of Audio Sales Vice President of Finance
_______________________ ____________________________
Title Title
5-28-93 5-28-93
_______________________ ____________________________
Date Date
16
<PAGE>
WESTWOOD ONE, INC.
LIST OF SUBSIDIARIES
WESTWOOD ONE RADIO, INC.
MUTUAL BROADCASTING SYSTEM, INC.
UNISTAR RADIO NETWORKS, INC.
WESTWOOD NATIONAL RADIO CORPORATION, INC.
NATIONAL RADIO NETWORK, INC.
THE SOURCE, INC.
TALKNET, INC.
WESTWOOD ONE SATELLITE SYSTEMS, INC.
KM RECORDS, INC.
WESTWOOD ONE STATIONS GROUP, INC.
WESTWOOD ONE STATIONS - L.A., INC.
WESTWOOD ONE STATIONS - NYC, INC.
EXHIBIT 22<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-8 (No.33-57637,
No. 33-28849 and No. 33-64666) of Westwood One, Inc., of our report dated
February 24, 1995 appearing on page F-2 of this Form 10-K.
PRICE WATERHOUSE LLP
Century City, California
February 24, 1995
EXHIBIT 24<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,439
<SECURITIES> 0
<RECEIVABLES> 37,631<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 46,157
<PP&E> 16,748<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 260,112
<CURRENT-LIABILITIES> 38,472
<BONDS> 115,443
<COMMON> 311<F3>
0
0
<OTHER-SE> 95,454
<TOTAL-LIABILITY-AND-EQUITY> 260,112
<SALES> 0
<TOTAL-REVENUES> 136,340<F4>
<CGS> 0
<TOTAL-COSTS> 105,389<F5>
<OTHER-EXPENSES> 24,969<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,802
<INCOME-PRETAX> (2,530)
<INCOME-TAX> 200
<INCOME-CONTINUING> (2,730)
<DISCONTINUED> 0
<EXTRAORDINARY> (590)
<CHANGES> 0
<NET-INCOME> (3,320)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
<FN>
<F1>REFLECTED NET OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS.
<F2>REFLECTED NET OF ACCUMULATED DEPRECIATION AND AMORTIZATION.
<F3>COMPRISED OF COMMON STOCK AND CLASS B STOCK.
<F4>COMPRISED OF NET REVENUES.
<F5>COMPRISED OF OPERATING COSTS AND EXPENSES EXCLUDING DEPRECIATION AND
AMORTIZATION.
<F6>COMPRISED OF DEPRECIATION AND AMORTIZATION, CORPORATE GENERAL AND
ADMINISTRATIVE EXPENSES, AND RESTRUCTURING COSTS.
</FN>
</TABLE>
